VICTORIA — B.C.’s carbon tax remains frozen heading into 2016, but political leaders are already sparring over its future and what to do with the extra money if the tax is increased.

In year-end interviews, Premier Christy Clark and Opposition NDP leader John Horgan painted sharply different visions for how they’d spend extra revenue generated by increasing the carbon tax.

The premier said she won’t consider any carbon tax hike unless it’s offset by cuts to other taxes. Horgan said British Columbians are tired of a revenue-neutral carbon tax and want the money spent on green projects like public transit.

Both admitted the issue might be a ballot box question facing voters in the 2017 provincial election.

“I think if it was, that’s a pretty good campaign to run on,” Clark said.

Last month, a government-appointed climate leadership team recommended raising the carbon tax (and cutting the provincial sales tax), as part of pollution reduction measures designed to help B.C. fight climate change.

The tax, introduced in 2008, has been frozen by the Liberal government at $30 per tonne of emissions since 2013, and Clark has pledged to extend that freeze until 2018. Beyond that, her government has only said it will study the climate leadership team’s recommendations.

The carbon tax generates around $1.2 billion annually for the province, offset by $1.4 billion in tax credits for seniors, children’s fitness and arts, rural homeowners, the film industry, digital media, small businesses and industry. The tax adds 6.67 cents a litre to the price of gasoline at the pump and 5.7 cents a cubic metre to natural gas.

A $10 a tonne annual increase, as recommended by the climate leadership team, would generate $400 million for government in its first year.

A Liberal government won’t spend that money, said the premier. “The only way you’d ever see any carbon tax increase in British Columbia would be if it truly was revenue neutral,” Clark said.

“It doesn’t come in for government to spend. It comes in and then is immediately offset by another tax cut so that the total level of taxes stays low. That is the only way you can really make a carbon tax work.”

NDP leader Horgan said he’d follow the Alberta NDP government’s new carbon tax plan, which earmarks much of the estimated $3 billion in new revenue in that province for energy-efficiency investments like expanded public transit.

“I think that the public has kind of grown weary of that notion of neutrality and instead want to make sure we have tax policies that address the needs of society, providing services to people, but are not debilitating economic activity, penalizing innovation and investment, or making it even more difficult for people in the middle to make ends meet,” said Horgan.

New Democrats have been conflicted in the past about the carbon tax, first campaigning in 2009 to “axe the tax,” then in 2013 proposing to broaden the tax to capture so-called venting emissions in the oil and gas sector.

Horgan said the idea remains to “take those revenues from anti-green activities and put them into green activities, so you win all the way round.

“You discourage the consumption or the creation of (greenhouse gas emissions) by pricing them, and also take any revenues from that and drive it into further reducing the dependence on them. And I think that’s something the public goes, ‘Well that makes sense.’”

The climate leadership team was made up of representatives from the academic, business, First Nations and environmental sectors. The liquefied natural gas industry, which was also on the team, does not support increasing the carbon tax.

rshaw@vancouversun.com

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