British Columbia's new carbon tax kicked in today, adding an extra 2.4 cents a litre to gas prices.
But at the same time, the B.C. government cut income taxes by two per cent Tuesday, in an effort to keep the tax revenue neutral.
The gas tax plan will be phased in over five years, rising to 7.24 cents per litre by 2012.
The fee will be on top of the 3.5-cent-per-litre gasoline tax British Columbians already pay to help fund transportation projects.
B.C. already had the highest gas prices in the country. Regular self-serve gas was costing about $1.52 at most stations Tuesday.
But Premier Gordon Campbell has promised that B.C. residents will actually have more money in their pockets at the end of the year because of income tax cuts.
For a family of four earning $90,000 a year, they would see $224 cut from their income taxes in 2009.
A single earner making $40,000 will save $90.
But "I've never seen a tax yet that was popular," Campbell admitted in response to those criticizing the gas tax. "This (tax) is something that is shifting to tax pollution and reduce taxes on income to increase people's paycheques so they can build the right future for their family."
Critics say that the tax is not revenue neutral and will force citizens to go green.
"What the government really wants to do is try to manipulate us into this politically correct low-carbon lifestyle," Maureen Bader of the Canadian Taxpayers Association said. "What's going to happen to families that live out in the suburbs?"
"Are they going to start walking? I don't think so."
While the plan may not be popular with drivers, Campbell said it's necessary to help reduce harm to the environment.
The carbon tax is estimated to bring in $1.8 billion in the first three years.
Last week B.C. homes began receiving a $100 Climate Action Dividend, a one-time cheque for every resident of the province aimed at starting environmental change at home.
With reports from CTV British Columbia
