TOMS LAKE, B.C. - B.C. Premier Gordon Campbell was forced to defend his government's carbon tax on the campaign trail Thursday after a national government advisory panel issued a report saying the tax isn't the way to go.
The National Round Table on the Environment and the Economy concluded in a lengthy report that hard caps on emissions and a scheme to trade them is a better alternative to a carbon tax. The report noted that the carbon tax proposed by the federal Liberals in the last election was soundly defeated by voters.
But Campbell said his government is trying to do more than the report suggests needs to be done and a cap-and-trade approach simply won't accomplish that goal.
"What the report says is cap and trade is necessary and if you read the report, they're calling for a 20-per-cent reduction in green house gases by 2020," Campbell said while campaigning in the province's northeast.
"We said in British Columbia it's going to be 33 per cent. We all support that. That's going to require not just a cap and trade, but a carbon tax."
As part of its green strategy, British Columbia introduced an escalating carbon tax last July adding 2.4 cents a litre on the price of fossil fuels, including gasoline. The tax will increase to about eight cents by 2012.
The province's green strategy also commits it to participating in a cap-and-trade scheme that has been endorsed by Quebec, Manitoba and Ontario and seven U.S. states.
NDP Leader Carole James pounced on the federal report's nod in her party's direction.
James is campaigning on a promise to eliminate the carbon tax and replace it with participation in a cap-and-trade system - a position that has drawn the ire of many traditional NDP supporters in the environmental movement.
"They (the report's authors) ruled out a carbon tax because they said it was important to have consistency and a level playing field across this country and the way to do that is through cap-and-trade because that's the way people are heading," James said before a town hall meeting in Kamloops.
Later in the report, however, the authors offers praise to the B.C. approach, noting the province's carbon tax establishes certainty because the increases are legislated, but also offers flexibility because the rates can be adjusted after four years.
This is a key feature for effective, long-term climate policy that doesn't hinder investment, the report says.
Campbell wore steel-toed work boots, coveralls and a hard hat to tour a natural gas drilling rig during a campaign stop in Toms Lake, in the heart of oil and gas country on Thursday.
He noted the oil and gas sector has created 34,000 jobs since 2001 when the Liberals took office, and he attacked New Democrat plans to tax gas flaring.
The premier said the oil and gas sector is a huge wealth generator in the province, with land lease sales that amassed $2.6 billion in revenues last year and another $1 billion in royalties.
The Liberal leader said the industry is an innovator of clean technology for the energy sector but taxing gas flaring will hurt the industry during tough times, he said.
Energy Minister Blair Lekstrom said taxing gas flaring will cause some companies to reconsider working in British Columbia altogether.
Flaring is the burning off of natural gas for emergency or safety reasons, or of gas that can't be processed or sold. The process releases emissions into the atmosphere and the NDP say there should be a levy.
"Right now, this oil and gas industry is helping drive the economy of British Columbia," said Lekstrom, who accompanied Campbell on the northern campaign stop.
A flaring tax would drive oil and gas producers elsewhere, he said.
"These rigs will pack up, they will move back to a more competitive jurisdiction."
At a later campaign stop in Fort St. John, B.C., Campbell told about 200 supporters that the gas-flaring tax will cost the industry about $400 million at a time when it's already feeling the economic pinch.
Campbell said the Liberals plan to cut flaring by 50 per cent by 2011 and have zero gas flaring by 2016.
A spokesman for EnCana, the major industry player in the area, said the company is working to eliminate flaring.
Richard Dunn estimated his company will pay up to $5 million in carbon taxes to the government - a levy he says the company can live with if everybody pays their share.
But James said the controversial tax is taking money out of the pockets of regular British Columbians.
She said it adds up to $300 in fuel costs per year for the average family. She's promised to scrap the environmental levy if elected, saving taxpayers and business in B.C. $1.8 billion over the next two and a half years.
"His plan hits families struggling to make ends meet and businesses trying to make a profit in the recession," James said in a statement.
She later told reporters that flaring taxes have been implemented in other jurisdictions, including Alberta and Texas.
During a town hall meeting Thursday night, James told about 50 supporters that Campbell has abandoned the forestry industry.
"I've been here too many times talking to forest workers who have lost their jobs," she said.
James said she has also spoken to teachers who've told her about the number of empty lockers inside schools as families leave to try and find work.