British Columbia's Carbon Tax

B.C.’s carbon tax puts a price on carbon pollution, providing a signal across the economy to reduce emissions while encouraging sustainable economic activity and investment in low-carbon innovation.

In 2008, the province implemented North America’s first broad-based carbon tax.

The carbon tax applies to the purchase and use of fossil fuels and covers approximately 70% of provincial greenhouse gas emissions.

Carbon pricing is gaining momentum globally. In Canada, the federal government implemented a coordinated nation-wide carbon price, beginning at $20 per tonne of carbon dioxide equivalent emissions (tCO2e) in 2019 and rising to $50 per tonne as of April 1, 2022. 

All provinces and territories must maintain a carbon price of at least $50 per tCO2e. As of 2019, over 70 jurisdictions, representing about 20% of global GHG emissions, have put a price on carbon.

Approach to Carbon Pricing

On April 1, 2022, B.C.'s carbon tax rate rose from $45 to $50 per tCO2e. 

New revenues generated from increasing the carbon tax will be used to

  • Provide carbon tax relief and protect affordability
  • Maintain industry competitiveness
  • Encourage new green initiatives

To align with the change in carbon tax, the Climate Action Tax Credit will increase from $174 to $193.50 per adult and from $51 to $56.50 per child effective July 1, 2022. 

The credit helps offset the impact of the carbon taxes paid by low- and moderate-income individuals and families and is issued four times a year through the Canada Revenue Agency.

Government also offers several carbon tax programs for businesses and local governments.

The CleanBC Program for Industry directs an amount equal to the incremental carbon tax paid by industry above $30/tonne into incentives for cleaner operations. The program is designed for regulated large industrial operations, such as pulp and paper mills, natural gas operations and refineries, and large mines.

The program includes:

  • A CleanBC Industrial Incentive that reduces carbon-tax costs for operations meeting world leading emissions benchmarks, and
  • A CleanBC Industry Fund that invests some industrial carbon tax revenue directly into emission reduction projects, helping to make our traditional industries cleaner and stronger.

Tax Rates by Fuel

Different fuels generate different amounts of GHG emissions. The April 2022 carbon tax rate of $50 per tonne must be translated based on the type of fuel used. Below are rates for select fuels.

Fuel

Tax Rate Based on $50/Tonne of Emissions

Gasoline

 11.05 ¢/litre

Diesel (light fuel oil)

13.01 ¢/litre

Natural gas

9.79 ¢/cubic meter