'Carbon confusion' makes this a 'bad' budget for Manitoba, say critics

People from across the political and economic spectrums are having a hard time seeing the positives in what they call a hazy carbon pricing scheme presented Monday in the provincial 2018-19 budget.

Manitoba 2018-19 budget includes carbon tax exemption for some industries, but some say plan light on details

Critics say the carbon tax plan in Manitoba's 2018-19 budget raises questions about where revenue from the tax, pegged at $143 for this fiscal year, will go. (Darryl Dyck/Canadian Press)

People from across the political and economic spectrums are having a hard time seeing the positives in what they call a hazy carbon pricing scheme presented Monday in the provincial 2018-19 budget.

The Winnipeg Chamber of Commerce, the Canadian Taxpayer Federation, the Manitoba Trucking Association and the Manitoba Lodges and Outfitters Associations all criticized the provincial carbon tax scheme.

They say it's vague on details — particularly in terms of where revenue from the tax will go. Some say the tax could be potentially harmful to business, while others claim the Pallister government had missed an opportunity to announce targeted investments in greenhouse gas reduction solutions.

"We've dubbed it 'carbon confusion,'" said Loren Remillard, president and CEO of the Winnipeg Chamber of Commerce.

"There would seem to be a lack of transparency as to what exactly that revenue is going to support."

Finance Minister Cameron Friesen's third budget builds on the province's so-called "Made-in-Manitoba carbon plan" announced last fall, which will see a $25-per-tonne tax placed on carbon starting in September.

Under the plan the price of propane is increasing 3.87 cents/litre, natural gas by 4.47 cents/litre and diesel will climb by 6.71 cents/litre.

At 5.32 cents/litre, the hike at the pump is estimated to cost the average Manitoba driver an extra $125 per year.

The budget projects the carbon tax will bring in a net revenue of $143 million in the 2018-19 fiscal year, and a total of $248 million after its first full year in operation. 

The government promises to return all that revenue to taxpayers through tax reductions over the next four years, including reductions to small business tax, increases in the basic personal tax amount and a dip to the PST slated to come in effect in 2020.

'Absolute nonsense'

Todd MacKay, Prairie director of the Canadian Taxpayer Federation, called the budget as a whole "bad" and railed against the Tory government carbon tax.

"This is the proposition that the government is putting to Manitobans right now: 'give us a whole bunch of your money right now in a carbon tax. Don't worry, we're going to take good care of it. And over the next few years you'll probably, maybe, sort of, kind of get it back,'" said MacKay. 

"Does that sound like a deal that any Manitoban would buy into? That's absolute nonsense."

Remillard also says, though the change to the small business tax is encouraging and the promise on returns is meant to be reassuring, something isn't adding up.

Fiscal hawks, industry and business representatives criticized the Pallister government for being too vague on details in its carbon pricing scheme unveiled Monday in the 2018-19 budget. 1:50

"When you take a look at the summary of tax measures, it's clear there's a $95-million surplus from the money they're taking in versus the tax reductions they're giving, so it leaves a lot of questions," said Remillard. 

"There's a lot of confusion around what exactly it is doing, where the revenue is going. We would've liked to see a little more openness and transparency and accountability around that revenue."

Remillard said he fears many business owners would read the budget and start to question whether investing in Manitoba over another province is unwise, based on uncertainty over how big of an impact the carbon tax could have on their bottom lines.

Exempt or not

The budget exempts certain industries from the tax. Agricultural processing emissions are exempt, as are "purple" or marked fuels, which are used in farming, forestry, mining and commercial fishing sectors.

Paul Turenne is the president of the Manitoba Lodges and Outfitters Association (CBC)

At first blush, the outfitting and lodging industry, which relies a lot on fuels including gas and diesel to reach remote cabins and run generators, boats and float planes, doesn't appear to be included in the exemptions. That worries Paul Turenne.

"There's going to be a lot of costs for us, we 're not exempt like the commercial fisherman and the forestry industry are," said Turenne, executive director of the Manitoba Lodges and Outfitters Associations.

"The fish and wildlife budget has gone down, which we're very not pleased about, because we had hoped that would go up. So there's not a lot of great news in there for our industry."

'No plan to lower green house gas'

Remillard added industries that are already working to cut emissions need to be supported, and he couldn't find many signs in the budget to that end.

If we don't fund those solutions … it will simply be a tax on economic activity.- Terry Shaw, Manitoba Truckering Association

"If the goal of carbon pricing is greenhouse gas reductions, we should be supporting those industries and those entities that are actually doing the work to help us do that," he said.

The Amalgamated Transit Union Local 1505 said the budget fails to spell out investments in green infrastructure projects and sectors committed to cutting emissions.

"This budget shows that the Pallister government simply doesn't see public transit as a priority in Manitoba," union president Aleem Chaudhary said in a statement. 

He went on to say the government "has missed an opportunity to invest the carbon tax revenue into green infrastructure such as public transit, and shows that their climate strategy has no plan to lower green house gas emissions."

'A tax on economic activity'

Terry Shaw, president of the Manitoba Trucking Association, would've liked to have seen more concrete plans for greenhouse gas reduction and tax relief measures for truckers.

Terry Shaw is president of the Manitoba Truckers Association. (CBC)

Shaw said the trucking industry contributes a significant amount of greenhouse gas to Manitoba's total emissions and was hoping to see the province willing to contribute to solutions in his industry. 

"If we don't fund those solutions, if we don't see the policy and programming coming back to our industry to help implement those solutions, it will simply be a tax on economic activity."

Meanwhile Mary Agnes Welch, senior researcher for Probe Research, said it's really too soon to say what will happen once the carbon tax is implemented.

"When you add up the math and you're figuring out where the carbon tax [revenue] goes, it's quite unclear," she said.

"Your gas is going to go up — everyone is going to talk about that in September — but you're supposed to get a little bit of an income tax break," she said.

"Is that going to make Manitobans feel that it's a wash, at least? I'm not sure," Welch said.

"Gas taxes are things people talk about ... do they notice a basic personal exemption tweak? I'm not sure."

With files from Aidan Geary