Brian Gallant backs off 'revenue neutral' claim for a N.B. carbon tax

Premier Brian Gallant appears to be abandoning his assertion that a New Brunswick carbon tax would be "revenue neutral."

Opposition PC MLAs questioned Gallant on the phrase Thursday in the first Question Period of the new legislative session, accusing him of abandoning a commitment he made almost a year ago.

By the end of the barrage, Gallant said he'd accept "whatever term they want to use" to describe the government's eventual carbon-pricing plan.

Gallant said in December 2015 that any New Brunswick price on carbon would be revenue neutral. He didn't define what he meant, but "revenue neutral" is most commonly used to mean other taxes are cut by an amount equal to the new carbon tax revenue.

'We have made it very clear'

In British Columbia, for example, the provincial government said its revenue-neutral carbon tax means "all of the carbon tax revenue will be returned to taxpayers through tax reductions. The money will not be used to fund government programs."

But a committee of the legislature has recommended that any carbon-price revenue go into a dedicated fund to be spent on environmental programs — a definition Gallant says is what he meant all along.

"We have made it very clear," Gallant said Thursday. "All those revenues that would be raised would go back into the economy. They will be invested in things that will help us be as energy efficient as possible."

PC MLAs Brian Macdonald and Jake Stewart repeatedly grilled Gallant on why his position has changed since last year.

Gallant insisted it hasn't and that he intended to spend the money all along.

But he suggested he won't be using the phrase any more to describe that.

"Whatever term the members opposite want to use to describe that, that is fine," he said. "I will go along with whatever term they want to use. Ultimately, the policy is what is important."

Backing away?

Environment Minister Serge Rousselle, asked by reporters whether he'll call a New Brunswick carbon price revenue neutral, said, "We'll be calling it — we'll be explaining the substance of it and that's the most important thing."

Stewart told reporters that Gallant is "totally" backing away from the phrase "and he wasn't happy about it."

Stewart said New Brunswickers he meets "believe 'revenue-neutral' is something that's not going to cost them anything. That's what New Brunswickers feel. That's what I hear."

He said if a carbon tax was offset by a tax cut that meant no additional cost to ordinary New Brunswickers, "some people might look at that and say 'that's not too bad.'"

Carbon tax or cap-and-trade?

Earlier this week, federal Conservative leadership candidate Michael Chong unveiled a platform that includes a revenue-neutral carbon tax, with big income tax cuts as one of the tools he'd use to offset the new revenue.

The report by the all-party committee of New Brunswick MLAs presented the government with two options: a carbon tax and a cap-and-trade system.

• Gallant government now says carbon pricing won't be revenue-neutral​
• Premier Gallant says carbon pricing could mean higher gas tax
• Cut income, corporate taxes and make up difference with carbon tax, says Chong

Cap-and-trade allows carbon emitters who stay below a government cap to turn the gap into a credit they can sell to other emitters who go above the cap.

The committee report said each of the two options has advantages but also said a carbon tax is easier to administer.

The federal government says it will impose a carbon tax in provinces that don't adopt their own carbon-pricing regime by 2018.