March 31, 2020

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Chastened Trudeau softens stance on Manitoba carbon-tax plan

It took an electoral wipeout in Western Canada and a threatened Manitoba court challenge, but Prime Minister Justin Trudeau appears to be warming to Premier Brian Pallister’s request for carbon-tax leniency.

Prime Minister Justin Trudeau appears to be warming to Premier Brian Pallister’s request for carbon-tax leniency. (Mike Sudoma / Free Press files)

Prime Minister Justin Trudeau appears to be warming to Premier Brian Pallister’s request for carbon-tax leniency. (Mike Sudoma / Free Press files)

It’s unclear, however, if Ottawa will take up Pallister’s plan to reintroduce a flat carbon levy.

"Manitoba has made significant investments in hydro over the past years, they have moved forward in a range of ways that have shown a real commitment to building a stronger economy that fights climate change at the same time," the prime minister told reporters in Winnipeg on Tuesday morning.

Trudeau was speaking at the Winnipeg Fairmont, where he wrapped up a three-day cabinet retreat Tuesday.

Since Pallister took office in 2016, the premier has asked Ottawa for less-expensive carbon-reduction plans here, given the glut of hydroelectricity after costly investments in megaprojects.

Coal makes up nearly half of both Alberta and Saskatchewan’s electricity generation, and virtually none in Manitoba, where the province is just starting to export its hydro surplus in large amounts.

Flood-channel: no consultation deadline from PM

Prime Minister Justin Trudeau would not commit Tuesday to green-lighting construction of a major Interlake flood-mitigation project by this spring.

Premier Brian Pallister raised the Lake Manitoba and Lake St. Martin outlet channels with the prime minister Monday, asking for the project to be expedited after officials added to the list of communities that need to be consulted.

Prime Minister Justin Trudeau would not commit Tuesday to green-lighting construction of a major Interlake flood-mitigation project by this spring.

Premier Brian Pallister raised the Lake Manitoba and Lake St. Martin outlet channels with the prime minister Monday, asking for the project to be expedited after officials added to the list of communities that need to be consulted. 

But Ottawa still has concerns that the province hasn’t adequately consulted with local Indigenous groups, and regulatory filings show the province has fallen short of the original criteria laid out in May 2018, before a federal agency added to the list.

“We understand the urgency of dealing with increasingly severe floods almost every year, here in Manitoba and in other places across the country,” Trudeau told reporters, without committing to any timeline for consultations to wrap up.

Ottawa promised a quarter-billion dollars for the project in June 2018, though none has been paid to the province, which has already spent $50 million of an estimated $540 million.

 

—Dylan Robertson

Pallister cited those investments when he promised a flat carbon tax in October 2017, set at $25 per tonne without rising for five years. That violated the Trudeau government’s requirement to a levy that rises by $10 every year.

The premier withdrew his own planned tax in October 2018, accusing the Liberals of using him as a "prop" to berate other conservatives and not giving the province credit for the abundance of hydro investment.

In April, Manitoba filed a court challenge, arguing the Liberals acted unfairly in not accommodating Manitoba’s request for leniency, while at the same time cutting side deals with other provinces to account for their existing carbon-reduction measures.

New Brunswick and Prince Edward Island are both displacing existing gasoline taxes with the carbon levy. In PEI, that’s lead to a one-cent increase on the price of a litre of gas, compared with 4.4 cents in Manitoba.

During his last meeting with Trudeau on Parliament Hill in November, Pallister has cited those grievances as emblematic of the Liberals need to understand Western Canada, after the party lost all of its seats in Alberta and Saskatchewan.

On Tuesday morning, Trudeau hailed Manitoba's hydro spending and green initiatives. "We will always work with any province that wants to do more," he said in French.

Hours later in Brandon, Pallister said he wants Ottawa to give his 2017 plan "a fresh evaluation," one that would include a flat tax, though he refused to say what precise amount he'll propose to Ottawa.

The federal government told the Free Press it needs to see an actual proposal from Manitoba in order to assess it, and that any province’s plan is analyzed each year for compliance.

For example, Ottawa approved of an Alberta plan that meets the federal standard for just a year; that province hasn’t said whether it will later raise the levy to comply with Ottawa's requirements.

Pallister tried to bolster the case for his Manitoba carbon plan Tuesday in Brandon, noting it exempts taxes on fuel for drying grain, unlike the federal plan. Across the Prairies, that has cost farmers millions.

The provincial NDP asked Pallister to axe Manitoba’s lawsuit, which his government has paused until other provinces’ Supreme Court challenges of the carbon tax are heard in March.

"Rather than ensure a future for our kids, Mr. Pallister is picking fights with the Prime Minister and wasting time in court," wrote MLA Adrien Sala.

The premier also incorrectly stated on Twitter that the federal carbon tax is taking money out of Manitoba.

"The federal carbon tax plan takes hundreds of millions of dollars, away from Manitoba, and only gives a fraction back," Pallister falsely claimed, despite federal legislation requiring that every dollar collected in Manitoba be remitted to the province through income-tax payments or funding green projects.

dylan.robertson@freepress.mb.ca

History

Updated on Tuesday, January 21, 2020 at 12:15 PM CST: Adds related stories

January 23, 2020 at 9:48 AM: Corrects typo

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