When British Columbia's much disputed carbon tax kicked on July 1st, Victoria said it would be revenue neutral, the money generated would be returned to taxpayers. But it turns out Ottawa is cashing in by collecting the GST on top of the carbon tax.
This was revealed to Zabin Somani when she opened her monthly gas bill and found that Terasen Gas had charged her for B.C. new carbon tax and the federal GST on top of that.
"I had no idea that I would get taxed on a tax,'' she said.
That certainly wasn't mentioned in February when the carbon tax was introduced.
At the time, former B.C. Finance Minister Carole Taylor said this carbon tax would be entirely revenue neutral, meaning every dollar raised will be returned to the people of B.C. in the form of lower taxes.
But as it turns out, this isn't exactly true. The province won't benefit from the $1.8-billion dollar carbon tax, but the federal government will.
Consumers may not realize it but they are now being charged GST on top of the carbon tax for everything from gasoline and diesel to propane and home heating oil.
As a result, that revenue neutral carbon tax the province keeps talking about will generate $30 million for Ottawa.
"Well I think it's a crummy deal,'' said one old age pensioner, who spoke to CTV.
For its part, Terasen Gas says it's simply following orders.
"Terasen's role in collecting tax is to follow our requirements and then remit those taxes back to government," said Joyce Wagenaar, a spokeswoman for Terasen.
BC Finance Minister Colin Hansen says there is nothing he can do.
"I personally disagee with the concept of a tax on a tax but that's the way the federal government has the GST set up,'' he said.
With a report by CTV British Columbia's Jim Beatty.
