An increase in B.C’s carbon tax to about 8.5 cents a litre will hit Okanagan drivers at the gas pumps in 2018.
The impact on gas prices is the result B.C.’s carbon tax jumping to $35 per ton in April, making it the highest carbon tax in Canada.
That will translate to about an extra $5 every time you fill up your car and about $10 tacked on if you drive an SUV, according to the Canadian Taxpayers Federation.
The carbon tax is also applied to natural gas and home heating oil.
Kris Sims, BC director for CTF, said starting in 2018 the B.C. carbon tax will no longer be labelled as “revenue neutral” and the money will pour into government coffers without earmarks or tracking as to where it’s spent.
Related: Gas price spike in fall 2017
Sims said with more than 5.7 billion litres of gasoline sold in B.C. last year, that means the provincial government will rake in an average of $490 million in gasoline carbon tax, and when the diesel carbon tax is included, that jumps to more than $600 million in tax revenue taken from motorists in one year.
“The carbon tax is going to cost us even more and now we have no idea where it’s going,” said Sims.
“If you have two vehicles in your family this means the carbon tax now costs you about $360 per year just to drive your kids to school and get yourself to work and the grocery store. This doesn’t include the costs of all those goods that need to be trucked in. We will pay for that too.”
But that depressing news aside, Sims said there are some positives on the tax front for the year ahead.
Sims points to cuts to the Medical Services Plan, with payments sliced in half as of Jan. 1, 2018.
Sims explained that MSP reduction will save an average two adult home $900 per year in mandatory health care taxes. The government has promised to eliminate the MSP completely within their four-year mandate.
Sims said the CTF has long argued that this unfair, inefficient fee needed to be axed, and will maintain the pressure on government to get rid of it altogether, saving an additional $900 per year per average household.
“The CTF campaigned hard for a cut to MSP, so we’re very pleased this unfair tax will be halved.”
Federally, Employment Insurance (EI) premiums will rise slightly, costing employees and employers an additional $9 and $13 per year, respectively. The indexation of the Canada Child Benefit (CCB) will also come into force on July 1, 2018, leading to a slight decrease in payments to eligible families on Jan. 1.
“There are no dramatic income tax changes on the federal side,” said CTF federal director Aaron Wudrick. “Canadians can for the most part breathe easy, but they shouldn’t expect to have much more money in their pockets.”
Wudrick noted that while 2018 did not hold many large tax changes, Canadians can expect further changes in 2019.
“The Trudeau government has delayed imposing its national carbon tax until 2019, and Canada Pension Plan premiums will begin to rise annually as well,” said Wudrick.
“There is still considerable uncertainty on the business tax front, both with respect to the Trudeau government’s controversial small business tax proposals, and due to recent dramatic tax cuts south of the border which will impact Canada’s competitiveness.”