The carbon tax conundrum
Ten to Watch in 2009: The Provincial Carbon Tax
By Patrick Brethour, Globe and Mail.Com, January 2, 2009
With broader economic concerns likely weighing on voters' minds, a key question in the coming provincial election will be whether the downturn will overshadow - or reignite - anger over the Liberal government's controversial measure
What a difference five months, and 57 cents a litre, can make.
When the Liberal government introduced its controversial carbon tax on July 1, pump prices were at their peak, $1.485 a litre, according to a weekly survey by M.J. Ervin and Associates. The public outcry over the additional 2.34 cents was intense, and the government's standing in the polls melted away in the heat of that summer outrage.
Then, in December, the cost of a fill-up got another, even bigger, boost as gasoline companies quietly did away with the long-standing discount of 3.5 cents from their posted prices. Not only was there no uproar - no one even seemed to notice the increase, perhaps overcome with the prospect of gas prices hitting their lowest level in nearly three years.
British Columbia Finance Minister Colin Hansen says much of the negative reaction was simply the result of his government's bad luck in bringing in the carbon tax just as prices reached "astronomical" heights. "Its introduction couldn't have come at a worse time."
Mr. Hansen said much of the hubbub about the tax was overblown, adding that he faced only one direct complaint in the past few months. Whatever public anger there was has now faded, he says, with broader economic concerns becoming the chief issues for voters. But the opposition NDP is still looking at the carbon tax as a vote-getter, particularly in the Interior. Finance critic Bruce Ralston said his party does not believe the public has forgotten, adding that his party plans to target the tax as unfair, ineffective and implemented without proper consultation.
"I don't think the anger has dissipated," he said, adding that the economic downturn could add to voter irritation over the tax as household finances become increasingly stretched. The NDP will continue to hammer home its message that it will "axe the tax" if elected.
A central question in the May provincial election will be whether the downturn in B.C. - which may actually worsen into a recession - will overshadow, or instead reignite, anger about the carbon tax. "We know that voters don't have long memories," says Evi Mustel, head of the polling company Mustel Group Market Research.
A number of polls have shown the provincial Liberals vulnerable, their once substantial lead either diminished or erased. The most recent poll from Mustel was one of the surveys showing a major tightening. Mustel's mid-November poll had the Liberals and NDP essentially tied, at 44 per cent and 42 per cent respectively, within the sample's margin of error of 4.4 percentage points.
As recently as March, the governing Liberals held an 18-point advantage over the NDP - after the carbon tax was introduced, but before the unprecedented spike in gasoline prices.
Ms. Mustel said it is clear that the carbon tax issue had traction for the NDP, at least in the summer. In the company's June polling, the high cost of fuel was the top issue of concern, with 17 per cent of respondents citing it as their chief worry. The economy was a distant fourth. Then came the economic meltdown of September, and the resulting sharp drop in oil and fuel prices.
By November, the economy had soared in importance, with 40 per cent of respondents saying it was their top issue. Fuel costs had fallen out of sight, with just 1 per cent of respondents saying it was their main worry.
The top-of-mind opposition to the carbon tax may have faded, but the damage to the Liberals, especially in the Interior, might still linger, Ms. Mustel said. It's possible that the economic downturn, combined with the carbon tax and anger over the decline of the forestry industry, could hobble the Liberals in Interior ridings, she said. "Certainly the Liberals aren't feeling very comfortable right now.
But Ms. Mustel observed that the growth in NDP support looks to be more of a protest vote against the Liberals than any firm rejection of the governing party.
Another consideration is that the December cold snap means hefty heating bills are on their way - including a line spelling out the added charge for the carbon tax on home heating fuel.
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