October 21, 2018

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Premier axes tax on carbon, cites disrespect from Ottawa

Manitoba's Progressive Conservatives have abandoned plans to impose a carbon tax this fall, citing a failure to obtain assurances that Ottawa won't hike the levy down the road.

Premier Brian Pallister made the bombshell announcement in the legislature Wednesday on the first day of the fall sitting.

Because of the decision, provincial income tax reductions set to take effect on Jan. 1 will be postponed, Pallister later told reporters. However, a promised cut to the provincial sales tax by 2020 is still on, the premier said.

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Manitoba's Progressive Conservatives have abandoned plans to impose a carbon tax this fall, citing a failure to obtain assurances that Ottawa won't hike the levy down the road.

Reaction in Ottawa

OTTAWA — Manitoba’s pullout from the national carbon tax had federal Tories jubilant, while distraught Liberals said they’re now forced to impose the levy on the province.

Premier Pallister announced his decision in Winnipeg during Question Period in Ottawa. Moments later, Portage-Lisgar MP Candice Bergen broke the news to the Commons, and asked Prime Minister Justin Trudeau to “do what Brian Pallister did today and say no to the carbon tax.”

OTTAWA — Manitoba’s pullout from the national carbon tax had federal Tories jubilant, while distraught Liberals said they’re now forced to impose the levy on the province.

Premier Pallister announced his decision in Winnipeg during Question Period in Ottawa. Moments later, Portage-Lisgar MP Candice Bergen broke the news to the Commons, and asked Prime Minister Justin Trudeau to “do what Brian Pallister did today and say no to the carbon tax.”

Trudeau replied that his government will continue with its plan to impose an escalating levy on provinces that don’t implement one on their own. “I continue to find it puzzling as to why Conservatives insist on making pollution free,” he said.

Bergen, who is a friend to Pallister, told reporters she didn’t have advance notice, but wasn’t surprised the “really grassroots politician” had changed course.

“I'm definitely proud of our premier,” Bergen said. "I think he's recognized, by talking to Manitobans, that a carbon tax will do nothing to reduce greenhouse emissions.”

Neither federal Environment Minister Catherine McKenna nor Intergovernmental Minister Dominic Leblanc were made available to reporters after Question Period.

Jim Carr, the MP for Winnipeg South Centre and sole Manitoban in cabinet, wrote to the Free Press that his province was rejecting a system that would have led to remittances and cash for green-energy programs.

“The decision is disappointing because of what’s at stake: billions in clean economy jobs and new investment,” Carr wrote. “Manitobans should be a big part of that future.”

LeBlanc quoted Pallister’s pledge to “make Manitoba the cleanest, greenest and most climate-resilient province in Canada,” from remarks last fall.

“This flip-flop will not achieve that goal,” LeBlanc wrote Wednesday, saying he was “disappointed” but would collect the tax and remit it to Canadians.

The Liberal’s budget bill will have the tax collected starting in January. All revenue must be remitted to the province it came from, but the law doesn’t specify whether that means rebate cheques for individuals, or transfers to provincial coffers.

It is also unclear whether Ottawa will renege on the $67-million for carbon retrofits it gave the province in exchange for ratifying an agreement on climate change.

The federal Tories have not revealed any aspects of their own plan, except that it won’t involved a carbon levy. “Manitoba should not be penalized and have this tax imposed on them,” Bergen said.

Winnipeg South MP Terry Duguid, who has a background in conservation, said he was surprised. “It was my view that the Manitoba government was showing some leadership,” he said.

“It looked like we had a co-operative relationship there, and that we would be one of the few governments that was working together in the west, and that’s not the case.”

—Dylan Robertson

Premier Brian Pallister made the bombshell announcement in the legislature Wednesday on the first day of the fall sitting.

Because of the decision, provincial income tax reductions set to take effect on Jan. 1 will be postponed, Pallister later told reporters. However, a promised cut to the provincial sales tax by 2020 is still on, the premier said.

Pallister said the government decided to cancel the $25-a-tonne carbon tax when it realized it would not be able to convince Ottawa to allow it to stay at that level in the future. The federal government had said provinces could initially impose a lower tax than Manitoba was prepared to levy, but it insisted that the tax rise to $50 a tonne within a few years.

The premier had insisted that Manitoba's flat tax was more effective than the federal alternative in reducing emissions while being less costly to individuals. He continued to debate the matter with the federal government — most recently when Prime Minister Justin Trudeau visited Manitoba last month — to no avail.

"They do not respect Manitoba's plan," Pallister said of the federal government. "They do not respect our investments...billions and billions of dollars in green (hydro development) that we're doing."

The government had a choice, the premier said: "Either you're going to stand up for Manitobans in a year, when the feds come in, as they've threatened to do, with a higher carbon tax, or you do it now. And we're doing it now."

'They do not respect Manitoba's plan. They do not respect our investments...billions and billions of dollars in green (hydro development) that we're doing' - Premier Brian Pallister on the federal government

Asked about the likelihood of the feds now imposing its own carbon tax on Manitoba, as it has threatened to do with provinces that failed to implement their own levies, Pallister said, "that's entirely in their court."

Manitoba's two opposition parties were incredulous at the government's decision.

"We just saw the premier of Manitoba jump into bed with (Ontario Premier) Doug Ford and Jason Kenney (leader of the United Conservative Party of Alberta)," said NDP Leader Wab Kinew, referring to political leaders who staunchly oppose a carbon tax.

With its action, the government is creating uncertainty for individuals, industry and municipalities "just because he wants to pick another political fight with Trudeau," Kinew said.

Liberal Leader Dougald Lamont said it is unclear why the PCs have flip-flopped on levying a carbon tax, speculating that it was unpopular with Tory supporters.

"Maybe Mr. Pallister is worried about the reaction from his base," said Lamont, who was marking his first day as a sitting member in the legislature on Wednesday.

Manitoba was to impose the $25 a tonne tax on Dec. 1. It would have raised an estimated $260 million a year. The premier said amendments will be introduced shortly to an enabling bill now before the legislature that would have imposed the tax.

'We just saw the premier of Manitoba jump into bed with (Ontario Premier) Doug Ford and Jason Kenney (leader of the United Conservative Party of Alberta)' - NDP Leader Wab Kinew

The premier said while Manitoba's carbon tax is dead, the province still plans to implement the bulk of its climate change and green plan, announced nearly a year ago.

Pallister didn't rule out joining a court battle initiated by Ontario and Saskatchewan to fight a federally imposed carbon tax.

"It's premature to say," he said. "There is a course of action other provinces have chosen to pursue and it is something we're going to have to look at."

The Canadian Taxpayers Federation applauded the province for rejecting a carbon tax, declaring it "a major victory for taxpayers". The province had estimated it would have cost a couple with two children about $300 a year in extra gasoline and home heating costs.

Curt Hull, project manager of the Climate Change Connection program at Manitoba Eco-Network, approves of Ottawa's carbon pricing scheme, but noted putting a tax on carbon won't be the only way to stop climate change. So he's not opposed to Manitoba backing out of a carbon tax plan.

"The way to effectively reduce greenhouse gas emissions requires a slate of actions, and putting a price on carbon is one important aspect, but it won’t work on its own," Hull said. "There needs to be a number of other actions taken in order to truly and effectively reduce emissions."

Hull said there are other good ideas contained in the province's green plan, such as allotting more money for public transit, but those ideas need to be fleshed out with funding.

larry.kusch@freepress.mb.ca

jessica.botelho@freepress.mb.ca

Jessica Botelho-Urbanski
Legislature reporter

Jessica Botelho-Urbanski covers the Manitoba Legislature for the Winnipeg Free Press.

Read full biography

Larry Kusch

Larry Kusch
Legislature Reporter

Larry Kusch didn’t know what he wanted to do with his life until he attended a high school newspaper editor’s workshop in Regina in the summer of 1969 and listened to a university student speak glowingly about the journalism program at Carleton University in Ottawa.

Read full biography

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