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Vancouver's Board of Trade called on the B.C. government Monday to freeze its carbon tax until more is known about its effects on both the economy and the reduction of greenhouse gas emissions.
It marked the first time the Board of Trade has openly parted ways with Premier Gordon Campbell's Liberal government on the carbon tax issue.
"When it [the carbon tax] was originally proposed in the budget, gas at the pumps was $1.10 to $1.15," said Bernard Magnan, chief economist for the board, adding that gas prices have risen significantly since then.
"Anecdotally, there have been some shifts in how people are travelling as a result of the combined impact of the small carbon tax and a significant run-up of prices at the pumps," he added.
Magnan spoke at the first of 17 public meetings being held by a government committee touring the province to solicit public input into next year's provincial budget.
"In terms of budget 2009, we want to know what are your priorities," said Liberal MLA Randy Hawes, who chairs the finance and government services committee.
Hawes added that people are free to raise a variety of finance-related issues before the committee, ranging from the carbon tax to a recent increase in salary ranges for public service executives.
Finance Minister Colin Hansen said the government is also mailing a questionnaire to every British Columbian, seeking advice about next year's budget.
"We would like to ask individual British Columbians what their priorities would be in the way of further reductions to taxes or other budget measures they would like to see implemented," he said.
The survey comprises four questions, including what new tax cuts British Columbians want to see to offset revenues collected by the carbon tax and what their spending priorities are.
Hansen left the door open for more new tax cuts in next year's pre-election budget, but was clear his government does not intend to cancel the carbon tax.
"We have set a budget in 2008, and we stand by it," Hansen said when asked by NDP finance critic Bruce Ralston if the government would consider cancelling the carbon tax entirely.
Hansen was not asked if he would consider freezing the tax until further information is available.
Introduced July 1, B.C.'s carbon tax started at $10 per tonne of carbon dioxide.
It was matched with income tax cuts to make it revenue-neutral.
The government plans to reduce income taxes again on Jan. 1 and to increase the carbon tax next July 1.
The increase would raise the carbon tax on gasoline from 2.34 cents per litre to 3.51 cents per litre, and would be offset by the new tax cuts.
Magnan said he wants to halt that increase until a proper study is done to determine what overall impact gas prices have had on people's behaviour so far.
He said he would be in favour of the increase only if further measures were required to meet targets for the reduction of greenhouse-gas emissions.
Magnan said he believes certain inequalities have emerged as a result of the new tax, and that the board would like to see a study of those as well.
"Inequalities are inevitable, especially in business. The government must be prepared to move swiftly to deal with these inequalities," he told the finance committee.
jfowlie@vancouversun.com
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