Trudeau to impose ‘federal backstop’ on Manitoba’s new carbon tax scheme

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Manitoba and the federal government are currently in disagreement on carbon tax prices which will impact not only Greenhouse Gas-emitting industries but also vehicle owners across the country. (http://commons.wikimedia.org)

Following Manitoba’s Oct. 25 announcement about setting its carbon price at $25 a tonne, Prime Minister Justin Trudeau warned the province that the federal government will intervene to ensure equivalent pricing.

Premier Brian Pallister asserted that the fed’s target for a carbon price will “impose an intolerable financial burden” on Manitoba. The provincial government, therefore, pushed for the “made in Manitoba” plan which sets the carbon price at half of the fed’s target of $50 per tonne by 2022. The proposal still needs the legislature’s  approval, but with Pallister’s government holding a large majority, it is expected to pass

Trudeau, however, responded with a warning. “There will be a federal backstop and if any province doesn’t move forward in an appropriate way, the federal government will ensure that the equivalent price on carbon is applied to the specific jurisdiction,” he said, promising that when fed regulations are imposed, money collected in Manitoba will stay and be returned to the province.

Pallister has seen the backstop coming and has sought legal opinion back in early 2017. Apparently, the feds can impose tax regulation but only when Manitoba’s own tax scheme proves ineffective.

When asked about a possible legal battle between the feds and Manitoba, Minister of Natural Resources Jim Carr responded: “I don’t want to speculate on what Manitoba may or may not do… We see the step they’ve taken today. We’re glad that they realize that putting a price on carbon pollution’s in Manitoba’s interest. We agree with them.”

Although Carr also expressed his disapproval of the fed’s target price, he believes that Manitoba and the national government will be able to “work beyond” the current conflict.

Manitoba plans to impose its own tax scheme in 2018, with the goal of raising $260 million in new revenue. Public consultations will be held to decide on how the money will be spent for fighting climate change. Options can include reducing other taxes, proving residential energy rebates, investing in cleaner energy sources and building more sustainable infrastructure.

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