Written by Colin Fast, Director of Policy at The Winnipeg Chamber of Commerce
When the provincial government announced in early October it was cancelling its planned carbon tax, Manitobans were left wondering what the federal government would do in response, and how this would impact Manitoba’s plans to reduce carbon emissions.
On October 23rd the first part of that question was answered as Ottawa announced its “backstop” carbon tax plan for those provinces that have declined to adopt their own carbon tax, including Manitoba, Ontario, New Brunswick and Saskatchewan.
Starting in April 2019, a carbon price of $20 per tonne will be added to various categories of fuel.
In Manitoba the fuel charge on gasoline, in 2019, will be 4.42 cents per litre and the charge for natural gas used in home heating will be 3.91 cents per cubic metre. The average cost impact for a household in Manitoba is estimated at $232 in 2019.
The federal government will rebate most of the revenue raised from the carbon tax directly to Manitobans through Climate Action Incentive payments. The average household will receive about $336 in incentive payments in 2019.
While getting a bigger rebate than what you’re paying in carbon tax sounds great for individuals, the math is less positive for business owners.
The federal government is setting aside approximately 10% of carbon tax revenue – $190 million over five years – to support small and medium-sized businesses, schools, hospitals, colleges and universities, municipalities, not for profit organizations, and Indigenous communities. It’s unclear how that funding will be delivered at this point.
But the bottom line is that businesses will be subsidizing the cost of rebates to individuals. And this additional tax burden creates concerns about economic competitiveness, especially for firms that sell into the United States, which has no carbon pricing at all.
On December 6th, Premier Brian Pallister will deliver his third annual State of the Province Address in front of 1,300 business and community leaders at the RBC Winnipeg Convention Centre. We’ll be looking for him to comment on the federal carbon tax plan and the ongoing dispute over this issue.
But equally as important, The Chamber audience wants to hear about Manitoba’s path forward on addressing climate change, how the Province will incentivize businesses that are taking steps to improve the efficiency of their operations, and how we can build a green economy in our province.
Get your seats for this year's State of the Province Address on Dec. 6.