As the nation turned 141 on Canada Day, BC residents were dealt another blow in the ongoing saga of rising gas prices. BC’s new Carbon Tax took effect adding 2.34 cents to each liter of gasoline sold in the province. The new tax, coupled with rising world oil prices sent gas prices shooting up to $1.52 per liter of gas (Thats about $5.70 per gallon for our US readers).

Although the new tax is expected to pull in over $1.8 Billion in the first three years, the money will not go into Government coffers. Instead, the money will be returned to tax payers in the form of corporate and personal income tax reductions. While individuals will be contributing only about one third of the carbon tax, they will receieve two thirds of the credit. Businesses on the other hand will contribute two thirds but will only see one third of the credit. All BC residents will also receieve a one time payout of $100.

The bad news? The carbon tax rate will increase each year until 2012 when it will add 7.24 cents to every liter of gasoline. By then, hopefully more alternative fuel sources are available to lessen the demand for conventional fuel sources.