Manitoba introduces carbon-tax legislation without plan to spend the revenue

Sustainable Development Minister Rochelle Squires introduced legislation Thursday to create a carbon tax for Manitoba — but there remains no indication yet how the province will spend the revenue.

PC government moves to start raking in $248M a year; details on how to spend that cash will come later

The province's greenhouse gas emissions plan would exempt Winnipeg's Brady Road landfill, the second-largest source of emissions in Manitoba. (Thomas Asselin/CBC)

Sustainable Development Minister Rochelle Squires introduced legislation Thursday to create a carbon tax for Manitoba — but there remains no indication yet how the province will spend the revenue.

The Climate and Green Plan Implementation Act will allow the province to begin charging $25 per tonne of carbon dioxide-equivalent greenhouse gas emissions. This would raise $143 million in new revenue during the next fiscal year, eventually rising to $248 million a year.

The province intends to use part of the money to create a $102-million conservation trust that would protect natural areas, and also spend $40 million on a "green fund" intended to mitigate climate change.

The legislation introduced Thursday will create the carbon tax, set the price at $25 a tonne and require the province to set five-year greenhouse gas emissions reduction targets.

It will also require the province to set greenhouse gas pollution limits for large industrial emitters as part of a scheme similar to a cap and trade system.

Officials will work with those emitters, including big players like Koch Fertilizer in Brandon, to ensure the cost of the new program doesn't drive them out of the province, Sustainable Development officials told reporters at a briefing before the legislation was introduced.

If those emitters simply move to another province or state, there would be no environmental benefit, the officials said.

No details on spending

What has yet to be determined is how the revenue will be spent.

"We'll be happy to share those details as we make those announcements," Squires told reporters.

An advisory committee will be created, although it's not clear who will sit on the committee and when it will be created.

Officials said the carbon tax on fossil fuels, which is slated to come into effect on Sept. 1, will be subject to GST and be applied on top of the existing fuel tax.

That means provincial taxes on gasoline will effectively rise from 14 cents to 19.3 cents, plus GST, in September.

Agricultural producers, commercial fishers, trappers, mining companies and the forestry industry will be exempt, as will the Winnipeg Fire Paramedic Service — but not Winnipeg Transit, officials said.

No money for transit improvements

Officials cited transportation as one of the largest sources of greenhouse gas emissions, but would not say why the province is offering no funding to improve Winnipeg Transit as part of this plan — at least for now — aside from a plan to convert some diesel buses to electric vehicles.

Meanwhile, provincial funding for Winnipeg Transit has been frozen for two years.

"It's one thing to put buses on the road, but if you don't have money for drivers and maintenance of those buses then you're not going to wind up with a net increase in the number of people putting their bums in buses," said Curt Hull of Climate Change Connection.

Mayor Brian Bowman said in a statement while the city welcomes funding for bus conversions, the carbon tax will increase costs for the Manitoba capital.

The province also plans to exempt Winnipeg's Brady Road Landfill, the second-largest source of greenhouse gas emissions in the province, from the large-emissions program.

Officials said this was because emissions from the landfill vary as a result of the water table and temperatures.

The legislation introduced Thursday also enshrines a pair of increases to the basic personal exemption in provincial income taxes, but does not require the province to reduce the provincial sales tax by one percentage point in 2020.

The Pallister government has promised to return all proceeds of the carbon tax to Manitobans within four years through income tax relief, small business tax reductions and cutting the PST.