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Details on Ottawa’s carbon tax for Manitoba coming soon

Farm equipment fuel will be exempted but what about for grain dryers and barns?

The federal government has yet to announce details of its upcoming carbon tax, but it seems farm fuels will be exempted.

“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.

“Details of the (federal) plan are coming in weeks, not months,” a federal government official said in an interview Oct. 17.

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The official declined to provide more details.

Why it matters: Farmers have no ability to pass rising costs like a carbon tax on to buyers, meaning it could make them uncompetitive globally.

Pallister said he was dropping his after Ottawa indicated it would impose its carbon tax in 2020, as by then Manitoba’s tax would be lower than what Ottawa is demanding.

The federal government will start taxing carbon emissions in provinces that don’t have their own plan early in 2019, beginning at $20 a tonne and rising to $50 by 2022.

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 government 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.”

Last November, the Manitoba government unveiled its Made-in-Manitoba Climate and Green Plan, which included a $25-a-tonne tax on carbon emissions, along with a commitment to spend millions of dollars to fund projects to help reduce carbon emissions.

Pallister argued Manitoba’s approach would result in less carbon pollution than Ottawa’s. Manitobans were also going to get an estimated $260 million in income tax reductions offset by revenues from the Manitoba carbon tax.

A recent study prepared for Canadians for Clean Prosperity concludes Manitobans will 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.

Families earning less than $20,000 a year would earn a net benefit of $251 in 2019, rising to $603 in 2022 when the carbon tax reaches $50 a tonne.

Families earning more than $150,000 a year in 2019 would see a net gain of $57 and $813 in 2022.

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 newspaper 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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