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Carbon tax rebates prominent part of federal plan announced Oct. 23

KAP wants grain drying and barn heating fuels exempted

Most Manitobans will get more money in carbon tax rebates than they’ll pay after the federal government’s carbon tax of $20 a tonne starts in April 2019, Prime Minister Trudeau announced Oct. 23.

Farm fuel will be exempted from the controversial tax designed to encourage Canadians to emit less carbon in the fight against climate change (Backgrounder: Department of Finance Canada).

“Our government knows that Canadian farmers are part of the climate change solution, and both gasoline and diesel fuels for on-farm use will be exempted from our plan to price pollution,” Dominic LeBlanc, minister of intergovernmental and northern affairs and internal trade, said earlier this month after Manitoba Premier Brian Pallister announced Oct. 4 the province would not implement its flat $25 a tonne carbon tax.

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However, it doesn’t look like the exemption applies to fuels used to dry grain or heat livestock barns, one agricultural industry official said.

In 2019 the carbon tax will add $0.442 and $0.0537 to a litre of gasoline and diesel fuel in Manitoba, except when burned in farm equipment, Environment and Climate Change Canada’s website says.

The carbon tax will rise by $10 a tonne per year hitting $50 in 2022. That will add an extra $0.11 and $0.1341 to a litre of gasoline and diesel fuel, respectively.

The federal government says 90 per cent of the revenue earned from the carbon tax will be rebated to Manitobans. The remaining 10 per cent will go to businesses, schools, hospitals and other organizations that can’t pass the tax on (Manitoba and pollution pricing: Government of Canada).

In 2019 a Manitoba family of two parents and two children will be eligible for a $336 carbon tax rebate that they can apply for when they fill out their income return.

The rebate increases to $801 by 2022. Rural peoples’ rebates will be 10 per cent higher.

Pallister said he was dropping Manitoba’s tax because Ottawa would impose its own because manitoba’s tax wasn’t going to $50 a tonne by 2022.

Manitoba Premier Brian Pallister says the province’s scrapped Made-in-Manitoba carbon tax was superior to Ottawa’s. Pallister says the province will go ahead with projects in the Climate and Green Plan to reduce carbon emissions.
photo: File/Dave Bedard

Even though Manitoba abandoned its carbon tax Pallister said the province will still implement plans announced last November in its Climate and Green Plan to cut carbon emissions.

While the Keystone Agricultural Producers (KAP) is pleased Ottawa’s carbon tax will exempt farm fuels, the farm group wants the same for fuels used to dry grain and heat barns, KAP president Bill Campbell said in an interview Oct. 18 while combining barley on his farm near Minto.

“We only need to look at this fall to see what an impact grain drying has on agriculture and how that jeopardizes our competitiveness,” Campbell said, alluding to the recent wet weather that delayed harvesting and forced many farmers to dry their grain. “If we have to pay a carbon tax on the grain drying then how do we compete with our neighbours to the south? Hopefully we can be in discussions with regard to how this part will be dealt with.”

KAP also wants some of the money the federal money collects from its carbon tax invested in projects to help Manitoba farmers reduce their carbon emissions, Campbell said.

“If the money is not returned to help mitigate greenhouse gases then it’s just a tax,” he said. “If the end result is to help climate change, hopefully they will realize and acknowledge that some of the contributions that farmers make through the carbon tax can go back to programs so that we have ways of dealing with greenhouse gas and climate change and all the rest of it. We need to be part of that discussion with regards to how the money flows back to certain sectors.”

The federal carbon tax will also be levied in Saskatchewan, Ontario and New Brunswick — provinces like Manitoba that haven’t developed a carbon tax that meets Ottawa’s standard.

Pallister argued Manitoba’s plan would result in less carbon pollution than Ottawa’s and reflect the billions of dollars Manitobans have already invested, and will continue to invest, in almost-carbon-free hydroelectric power production.

Under Pallister’s tax some of the revenue was going to cut Manitobans income tax by an estimated $260 million over five years.

A recent study prepared for Canadians for Clean Prosperity concludes Manitobans will also receive more back in dividends from the federal carbon tax than they pay in carbon taxes.

“The results show that at almost all income levels and for almost all family types, families and households would receive more money back in carbon dividends than they would pay out in carbon taxes or indirect costs,” Canadians for Clean Prosperity says in a summary of the report. “There will be enough funds to give households back more than they paid in because carbon taxes are collected not only on households but also on business and industrial emissions. To ensure jobs are not lost, large emitter companies in trade sensitive sectors such as cement or steel manufacturing would have their payments largely refunded through the federal Output Based Pricing System. However, our modelling assumes that the federal government would choose to recycle all other revenues directly to households.”

That’s a big assumption, Conservative Opposition leader Andrew Scheer told CBC Radio’s The House Oct. 20.

Ottawa’s carbon tax is a tax grab, Scheer said.

People who reduced their carbon emissions would be even further ahead by avoiding some of the tax, the study says.

While the study concludes a majority of Manitoba families would be financially ahead with Ottawa’s carbon tax compared to no tax, low income families would benefit the most.

Humankind has 12 years to keep the earth’s temperature from exceeding 1.5 C the United Nation’s Intergovernmental Panel on Climate Change (IPCC) said in a report released Oct. 5.

“It’s a line in the sand and what it says to our species is that this is the moment and we must act now,” the Guardian reported Debra Roberts, a co-chair of the working group on impacts, as saying.

The IPCC says unprecedented changes are urgently needed, but they are affordable and feasible through land use and technological change. Reforestation, switching to electric transport and capturing carbon are essential.

“We have presented governments with pretty hard choices,” the Guardian quoted Jim Skea, a co-chair of the working group on mitigation, as saying. “We have pointed out the enormous benefits of keeping to 1.5 C, and also the unprecedented shift in energy systems and transport that would be needed to achieve that. We show it can be done within laws of physics and chemistry. Then the final tick box is political will. We cannot answer that. Only our audience can, and that is the governments that receive it.”

About the author


Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.



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