GLOBE-Net, September 11, 2012 - The British
Columbia Jobs and Investment Board (BCJIB), a body established in
February 2012 to build on BC's post-recession boom in exports and
the momentum of the BC Jobs Plan, has released an interim report
that calls for, among other things, the elimination of BC's
milestone carbon tax.
The report, which contains recommendations for each of the eight
sectors identified as priorities for economic development in BC's
Jobs Plan, suggests the province should slash or eliminate its
carbon tax as part of a broad-based effort to create jobs and
stimulate the provincial economy.
The18-member Jobs and Investment Board
is composed of representatives from business, labour, academia
and First Nations put forward recommendations on forestry, mining,
natural gas, agrifoods, technology, tourism, transportation, and
international education, as well as a special focus on
BCJIB Chairman Ray Castelli quoted in an interview noted that the Board is considering
more than 100 policy recommendations, and decided to release an
interim report highlighting 33 of them "to get the ball
With respect to BC's carbon tax, which was introduced in 2008,
the report calls for its elimination or significant reduction due
to its fiscal impact on the competitiveness of certain sectors, in
particular, the transportation and energy sectors.
"Depending on the industry, there's a sentiment that if you have
a tax on your product or your imports that your global competitors
don't have - cement distributors are a good example, or the
transport industry - you could make the argument that your
particular sector is being disadvantaged," said Castelli in the
He added that there was consensus among the Board that the fate
of the tax was a complicated question for the Provincial Government
because it was originally tied to a reduction in personal income
Opinions on the merits of the carbon tax are deeply divided. In
July, Sustainable Prosperity, a University of Ottawa-based research
network, argued the first four years "have had a positive
environmental impact without harming the [BC] economy."
It outlined four key reasons why the tax has been a success: use
of petroleum fuels (subject to the tax) has dropped by 15.1%; BC's
GDP growth has outpaced the rest of Canada's; the tax is "revenue
neutral" and has returned far more in tax cuts (by over $400
million) than it has received in carbon tax revenue; and BC's per
capita GHG emissions have declined by 9.9%, outpacing the decline
in the rest of Canada.
A report from the Pembina Institute agrees generally with these
findings. Based on a series of confidential interviews, the Pembina
report said a strong majority (64%) of the respondents believed
that the carbon tax has had positive consequences for the province,
while only a small minority (18%) thought it had negative
As part of the 2012 Budget, the
B.C. Government announced it will undertake a comprehensive review
of the carbon tax and its impact on British Columbians. The review
will cover all aspects of the carbon tax, including revenue
neutrality and the impact on the competitiveness of BC
The Jobs and Investment Board Interim Report also recommended
enhancements to the tax credit program to improve the economic
climate for BC's technology sector, which employs in excess of
18,000 people. These recommendations include enhancing the BC
Investment Tax Credit Program by eliminating the current annual
maximum of $200,000 per individual or corporation; increasing the
maximum credit for a corporation from the current $5 million to $10
million; and extending the tax carry-forward period for corporate
investors from the current 5 to 10 years.
The report also recommended increasing the BC Renaissance Fund
with an initial $90 million in order to provide further start-up
and growth capital to technology companies and attract more venture
funds to operate in the province of BC.
With respect to the energy sector, the report calls for
modifications to the Provincial energy policy to allow for greater
use of natural gas as a primary solution for power supply in urban
and industrial areas of the province. In addition, it advocates
promoting the alternative uses of natural gas including
transportation fuel, gas to liquids, and production of certain
A number of overarching issues were identified by the Board as
having pronounced impacts on the provincial economy. Uncertainty
about the supply of a skilled and labour force and doubts about the
quality of education/skills training for many key sectors was a key
A second common barrier identified was the Province's business
and regulatory environment - particularly for natural resource
sectors - where timeliness and clarity around permitting for
resource access and/or construction impact investment.
A third potential barrier to growth across many industries was
ongoing uncertainty with respect to First Nations consultation and
accommodation processes. The Board welcomed the Government's
decision to form a companion Aboriginal Business and Investment
Finally, the business climate and competitiveness of the
province's manufacturing sector impacted on most of the priority
sectors of the economy. Board members recommended greater focus in
upcoming discussions on the challenge of developing an advanced
manufacturing sector in BC.
Other highlights of the report include:
- Furthering work to ensure a reliable timber supply.
- Redrafting consultation and accommodation guidelines with First
Nations to improve transparency and clarity regarding the
responsibilities of the Crown versus those of the private
- Addressing skills shortage in the mining, natural gas and
international education sectors.
- Increasing marketing of BC's agri-foods (aquaculture,
blueberries and wine) markets.
- Increasing incentives and access to venture capital for the
- Establishing a new model for Provincial Tourism Destination
- Establishing a Northern Ports Strategy.
- Improving market access and a greater share of IRB investment
for BC's aerospace and defence sector.
- Establishing a centralized application process for
post-secondary and international education.
The Board will refine these and other recommendations with the
goal of developing a final report by early 2013.
In several areas, the Board's Interim report echoes the findings
of research recently completed by GLOBE Advisors
on British Columbia's clean economy. A soon-to-be
published series of reports highlight the importance of a stable
policy environment in critical areas of BC's economy in order to
stimulate job creation and investment, particularly in the areas of
clean energy, green building and energy efficiency, and clean
GLOBE research findings however contradict the Board's
recommendations to eliminate or reduce the carbon tax, which has
been shown to increase overall productivity, improve efficiencies,
and generate sustainable employment opportunities by making
industry more competitive in the long-term.
Further information on the GLOBE Advisors research with respect
to the clean economy of the Pacific Region is available here.