Manitoba won’t ask feds to cancel carbon tax on natural gas

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This article was published 01/11/2023 (707 days ago), so information in it may no longer be current.

Manitoba’s finance minister may be looking for greater fairness after changes to the federal carbon tax that mainly benefit eastern provinces, but don’t expect to hear Premier Wab Kinew joining the western battle cry to “axe the tax.”

Other provinces are asking for changes to the carbon tax since Prime Minister Justin Trudeau committed last week to an exemption on home heating oil and federal funding for geothermal heating systems in eastern Canada.

“That’s definitely of interest to us here in Manitoba,” Finance Minister Adrien Sala told the CBC Tuesday. “We want to know how that might extend to greater fairness for Manitobans.”

Sala declined to comment further on the matter Wednesday, deferring to the premier.

Kinew said he plans to make a formal request to the federal government, but not for a carbon tax exemption on natural gas that most Manitobans use to heat their homes.

“I think we’re very interested in participating in the geothermal retrofit program,” Kinew said at an unrelated media event Wednesday.

Last week, the federal Liberal government announced a three-year pause on the carbon price on home heating oil to allow Canadians who use the fuel more time and money to replace it with electric heat pumps, as well as the expansion of a program that helps people buy the pumps.

“Now that the federal government has indicated that there’s the potential for other provinces to participate, that’s something we’re going to follow up on,” Kinew said.

His prairie counterparts, Saskatchewan Premier Scott Moe and Alberta Premier Danielle Smith, have said the carbon tax exemption on home heating oil should also be applied to natural gas that the majority of prairie residents use to heat their homes. Moe on Monday threatened to stop collecting the federal carbon tax on natural gas.

Kinew, who on Friday told reporters he didn’t want to engage in legal battles with Ottawa over the carbon tax, said he wants to work with the federal government.

“We want to have a strong, productive relationship,” the premier said Wednesday, adding he will ask for federal help to ramp up geothermal home heating retrofits in Manitoba.

“We very much hope to be able to bring in some benefits here in Manitoba that will help you save money on your home heating bill, create some good jobs in the community and also help to free up some more electricity on the grid.”

Conservative leader Pierre Poilievre, who has called on the federal government to “axe” the tax, said he plans to introduce a motion in the House of Commons calling on the government to exempt all home heating fuels from the carbon price until the next election, and then ask Canadians at the polls to decide if they want the price reapplied.

In Manitoba, the Kinew government has said it will suspend the 14-cent per litre provincial gas tax for six months starting Jan. 1.

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“It’s great that premier Kinew is axing the gas tax but it’s not great if you save on your bill at the gas pump but then you get hammered at the end of the end of the month with a huge carbon tax bill on your natural gas,” said Gage Haubrich with the Canadian Taxpayers Federation.

The average Canadian home uses about 2,385 cubic metres of natural gas per year, according to the Canadian Gas Association. The carbon tax will cost the average Manitoba household $386 this year after the federal carbon tax rebate, Haubrich said.

The Climate Action Incentive payments that were meant to offset the economic impact of the carbon tax on Canadians won’t make up for the financial hit, according to the Parliamentary Budget Officer.

“Taking into consideration both fiscal and economic impacts, we estimate that most households will see a net loss, paying more in the federal fuel charge and GST, as well as receiving lower incomes, compared to the Climate Action Incentive payments they receive and lower personal income taxes they pay,” the PBO report said.

“Based on our analysis, most households will pay more in fuel charges and GST—as well as receiving slightly lower incomes—than they will receive in Climate Action Incentive payments.”

Carol Sanders
Legislature reporter

Carol Sanders is a reporter at the Free Press legislature bureau. The former general assignment reporter and copy editor joined the paper in 1997. Read more about Carol.

Every piece of reporting Carol produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.