File photo (image credit - CFJC Today)

By Michael Reeve

CARBON TAX BUDGET

Removal of carbon tax to drop fuel prices but leave hole in provincial budget

Mar 27, 2025 | 4:31 PM

KAMLOOPS — The consumer carbon tax in British Columbia will be eliminated as of April 1. The move follows the announcement from federal Liberal Leader Mark Carney prior to the election call earlier this month that his government had lowered the consumer carbon tax to zero dollars. The consumer tax will be gone but industrial emitters will remain on the hook. While it’s expected to lower the cost at the pumps for residents, the NDP government is now staring down the loss of revenue.

$1.5 billion is the amount of revenue now missing from the government’s budget with the removal of consumer carbon tax.

“This is part of the problem where we had a budget introduced where apparently the premier and the finance minister were the only people left in Canada that didn’t think there would be significant changes to the carbon tax over the next few months, given what was going on federally. What we have now is a rushed non-plan from the government,” said Peter Milobar, B.C. Conservative finance critic and Kamloops Centre MLA.

Milobar pointed out that a number of items within the latest budget document were expected to be carbon tax funded, leaving their status unclear.

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“The [government] made a big deal about [how] they were funding transit and they were funding other initiative through carbon tax — so will those programs be cut? Will we see a drop in transit funding? Will we see other cuts? That is really where a lack of plan from this government is quite shocking,” added Milobar.

The carbon tax previously helped fund the Climate Action Tax Credit, totaling $500-to-$600 per year for British Columbians. The removal of the credit will bring the government closer to even.

“That is a big chunk of the revenue and the offset that will occur. [It] doesn’t cover all of it, of course, and we have some work to do on that. But we are very focused on efficacy. This is work that we are doing right now across government — essentially program reviews and efficiency reviews to ensure that every dollar is landing where we want it to land,” said B.C. Minister of Finance Brenda Bailey.

Bailey stated the removal of the tax in April should have drivers seeing a 17-cent reduction at the pumps.

“If producers and retailers aren’t passing that on, that is a problem. [I’m] really encouraging your [audience] to pay close attention to that, because it’s our expectation that the producers and retailers will pass that on to consumers and consumers will have that savings,” said Bailey.

When it was originally brought in by the BC Liberals, the tax was revenue neutral. That changed under the New Democrats, who were forecasting for more than $10 billion in revenue over the next three years.

“There is a large portion of that — somewhere in the $6-to-$7 billion range of revenue — that has gone into other programs, that we are not sure if the government is going to cut those programs or if they are going to run an even larger deficit which will put our credit ratings even further at risk,” said Milobar.