Ottawa's rebate on carbon tax not enough to pay Manitoba back for green investments: Pallister
Average household will get about $104 back after paying more upfront, Ottawa estimates
The carbon pricing scheme Ottawa will impose is not as revenue-neutral as the federal government insists, Manitoba Premier Brian Pallister is arguing.
On Tuesday, Justin Trudeau's government followed through on its threat to slap a carbon tax on the provinces with climate plans it deems insufficient.
All Manitobans will be eligible for a rebate of up to $170 per person to offset most of the costs of the federal government's price on pollution, which will take effect next April.
"Our plan was designed to raise the basic personal exemption, which disproportionately would advantage poor people," Pallister said.
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"What Ottawa is proposing to do, as I understand it, is kick it back on a per capita basis — and that isn't a plan."
He described it as another way the federal government can take money from Manitobans and take credit for distributing it.
Minister of International Trade Diversification Jim Carr explained, at a Winnipeg news conference, how 90 per cent of the proceeds from the consumption tax would be divvied out in Manitoba.
Single adults or the first adult in a couple will be entitled to a $170 refund in the first year, while a second adult in a household will get $85 back.
For reasons the premier will have to explain to you, he changed his mind.- Minister of International Trade Diversification Jim Carr
Parents are entitled to $42 for each child in their family, but single parents will receive $85 for their first child.
The federal government estimates the average Manitoba household will pay $233 more next year as a result of the carbon tax, and get a $336 rebate in the first year of the plan. That's a net rebate of $104, based on average costs and rebates.
The remaining 10 per cent of carbon tax revenue will assist institutions such as hospitals and universities, Carr said.
Highest emitters should pay: Carr
"Pollution shouldn't be free in this country. Nobody should be allowed to pump unlimited emissions into the air we all share without consequence."
Every Manitoban who lives outside Winnipeg will receive a 10 per cent higher rebate because of their increased transportation and energy needs.
Farmers will not pay any tax on their fuel needs, he said.
The announcement comes only weeks after Premier Brian Pallister decided he wouldn't foist his own carbon tax plan on Manitobans, after realizing Ottawa did not consider his flat $25-per-tonne price sufficient and would not change its stance.
Talks broke down
"We were hopeful that we'd be able to work hand in hand with the province of Manitoba, but for reasons the premier will have to explain to you, he changed his mind," Carr said.
The Liberal minister suggested conservative governments in Ontario and Saskatchewan were wasting time in court trying to stop the tax, when his government is committed to reducing emissions immediately.
"For too long, governments have stalled," Carr said.
Pallister said Tuesday the Ottawa plan should be challenged in court, but he hasn't determined whether Manitoba will intervene.
If it comes down to it, Pallister said his province has a better argument to make than most provinces that its plan is adequate, citing the province's prior investments in hydroelectricity.
Under the terms of the national climate framework, Ottawa will levy a tax of $20 on every tonne of greenhouse gas emissions starting in 2019, rising by $10 each year to $50 a tonne by 2022. The rebate will also increase over time, Carr said.
The $20-per-tonne carbon tax will result in an approximate cost increase of 4.42 cents a litre for gasoline, 3.91 cents per cubic metre for natural gas and 3.10 cents a litre for propane.
Incentives needed: Kinew
Manitoba NDP Leader Wab Kinew said he's encouraged by Ottawa's plan, but he said cheques in the mail must be augmented by actual solutions to reduce our province's carbon footprint.
Pallister's objection doesn't make sense, Kinew added. "He's now criticizing Trudeau for bringing forward a plan that is very similar to what he spent the past number of months cheerleading."
Manitoba Liberal Leader Dougald Lamont said raising the basic personal exemption for everyone, as per Pallister's plan, actually helps higher-income earners the most.
Ottawa plan comparable
At first glance, both Ottawa's carbon pricing scheme and the plan Manitoba scrapped are similar, since they both pledged to return money to taxpayers, Curt Hull, project manager for Climate Change Connection, figures.
He wouldn't say which plan he thinks is better, though.
"In and of itself, putting a price on carbon pollution is necessary, but it's only part of a solution and it only really works if it's part of a broader set of initiatives and tools," Hull said.
Ottawa is letting the provinces that crafted a sufficient carbon pricing scheme determine where its revenue should go.
Critics have argued raising the price of gas by only a few cents a litre won't make a difference, but Ian Mauro, co-director of the Prairie Climate Centre at the University of Winnipeg, disagrees.
"Everybody is going to hear that and go, 'I won't change my behaviour over four cents a litre,' but it's an introduction, and by 2020 it will be 50 bucks a tonne, 11 cents a litre," he said.
"The idea is we start to price it in, and it has to start somewhere."
With files from Sean Kavanagh, John Paul Tasker and Aviva Jacob.