Environmental taxes and subsidies

Environmental Taxes and Subsidies Known in government as Ecological Fiscal Reform  In simple terms, a redirection of income taxes  Green or environmental taxes counter the pursuit of

Environmental Taxes

and Subsidies

Environmental Taxes and Subsidies

 Known in government as Ecological Fiscal

Reform

 In simple terms, a redirection of income taxes

 Green or environmental taxes counter the

pursuit of lower prices by externalizing the true costs, ensuring the consumer or purchaser is

aware of the costs of the environmental impacts

Taxes and Subsidies

 Environmental taxes and subsidies are “a

strategy that redirects a government’s taxation and expenditure programs to create an

integrated set of incentives to support the shift

to sustainable development” (National Round Table on the Environment and the Economy, 2002)

Importance of Tax and Subsidy

Reform

 Canadians and their governments have become increasingly more aware of climate change and the surrounding environment

 Taxes and subsidies are an economically feasible way to become more sustainable

 Taxes and subsidies are cheap and easy to

implement and have massive impacts to coffers

Some Examples

Part 1-Tax Shifts-Update and Status Report

Some Examples

 Tax breaks for “green” industry, such as mining and forestry

 Carbon emission taxes

 Tradable emissions permits

 Energy use taxes (vehicle fuels, domestic power, household heating)

 Energy Star program (which has since been

cancelled)

Ecological Gifts Program

 Federal program open to all Canadians

 Provides a way for Canadians with ecologically sensitive land to protect natural areas

 Ecologically sensitive land or easements,

covenants, and servitudes on such land are

eligible for special tax assistance

Ecological Gifts Program

 Provides charitable donations deductions for

corporations

 Provides donation tax credits for individuals

 Favorable income tax treatments for gifts of

ecologically sensitive land

-this includes the provision of a tax credit or deduction to donors and a reduction in the

Fuel Tax or Excise Tax

 Taxes on leaded, unleaded, aviation gasoline's, as well as diesel and aviation fuels

 Payable by the manufacturer or producer at the times the goods are delivered to the purchaser or

at the time of delivery to the retail outlet

 Tends to favor a consumer pays attitude

Fuel Taxes In B.C.

but it was reduced to 7

cents per gallon

but extended to aviation

fuels

converted to the

equivalent metric rate of

1.5 cents/L

cents/L on gasoline and

4 cents/L on diesel and aviation fuel

Fuel Taxes around Canada

Vancouver and 13.5

cents/L in Victoria

cents/L

cents/L

cents/L

cents/L

10.7 cents/L

When Should an Ecotax Kick In?

 An effective ecotax provides a tax credit on

income taxes with certification of ecological

improvements

 The tax credit kicks in only if there is sole

dependence on the cooperation of taxes

Questions?

Backhaus, Jurgen (1998) When Should the Ecotax Kick In? A Cost and Choice

Approach Kyklos, 51, 565.

Barrow, C.J ( 1999) Environmental Management, Principles and Practices

Routledge, New York, 1999.

B.C Budget 2000 Accessed October 24, 2007 from http://www.fin.gov.bc.ca/

archive/budget00/reports/bgt2000_topicbox_c01.htm

Beuregard-Tellier, F (2006) Ecological Fiscal Reform Parliamentary Information and

Research Service, March 17, 2006.

Careless, Ric (1997) To Save the Wild Earth Raincoast Books, Vancouver, 1997

Catalogue of Federal, Provincial, and Territorial Taxes on Energy Consumption

and Transportation Accessed October 20, 2007 from http://www.fin.gc.ca/ subsidev/sdcat_1E.html

Ecological Gifts Program-What are the tax benefits? Accessed on October 20, 2007

from http://www.cws-scf.ec.gc.ca/egp-pde/default.asp?lang=EN&n=

6C0F56D5-1