Purple fuel won’t be subject to Manitoba’s proposed carbon tax, but that exemption may not be extended to heating for barns, greenhouses and grain dryers.
The plan calls for Manitoba to bring in a flat $25-a-tonne carbon tax coming next year, rather than the federal government’s $10-a-tonne levy that would rise over time to $50 a tonne.
“We all know the farm sector is critical to the province,” Premier Brian Pallister told reporters here Oct. 27 at the unveiling of his “Made-in-Manitoba Climate and Green Plan,” adding purple fuel was exempted because most farmers can’t pass the tax on.
But the climate and green plan, more than a year in the making following extensive consultations, is “much, much, much more” than a carbon tax, Pallister stressed.
The plan says climate change is real — something Pallister himself has said repeatedly.
The plan’s goal is to — over the next five years — cut Manitoba’s carbon emissions by between 2.4 million and 2.6 million tonnes, half of which will result from the carbon tax and the rest from measures such as a possible increase of the biodiesel mandate to five per cent from two, encouraging energy conservation and diverting organic waste from landfills. (See sidebar for more plan details and what it means for farmers.)
“We haven’t quite got that (heating and dryer fuel part) finalized,” Agriculture Minister Ralph Eichler told reporters. “That is part of the consultation process… in discussion with Manitoba Pork and Keystone Ag and other sectors.”
Agriculture emits 32 per cent of Manitoba’s carbon, second only to transportation at 39 per cent. But much of agriculture’s contribution comes from applying nitrogen fertilizer and livestock, which no other jurisdiction has levied a carbon tax on, partly because emissions vary and are hard to link to individual farmers.
The plan also says agriculture can help sequester carbon.
“Rural communities have been heard, especially farm communities, in the fact that there is an exemption to the carbon tax in that sector,” said Ian Mauro, an associate professor of geography at the University of Winnipeg and co-director of the Prairie Climate Centre. “I think initially that makes a lot of sense.
“Don’t penalize the people who ultimately support society and create the food that we all eat.
“But we all have to realize though that there are significant changes coming and this is a first step.”
Manitoba’s new carbon tax will cost non-farmers an extra 5.2 and 6.7 cents a litre for gasoline and diesel, respectively.
It will add an extra 4.8 cents per cubic metre to the price of natural gas, which many city residents use to heat their homes.
Pallister wouldn’t say when in 2018 the carbon tax will be implemented. The date will likely be announced in the spring budget.
If Manitoba doesn’t have its own carbon price to provide a clear economic incentive to cut carbon emissions contributing to climate change, Ottawa will impose its own starting at $10 a tonne in 2018 and rising to $50 — twice as much as Manitoba’s — by 2022.
Manitoba’s plan is better because it will cost less, cut emissions by an extra 80,000 tonnes and let Manitobans decide how to spend the estimated $258 million in annual revenue the tax will raise, Pallister said.
A higher carbon tax to start should be more effective in encouraging people to reduce emissions, he said.
Pallister said his government will be accountable for reaching emission targets, which will be carried over into future years if they fall short.
Averaged over five years Manitoba’s carbon tax is just $5 a tonne cheaper than Ottawa’s. The Manitoba plan will save citizens an average of $240 in total, or just $48 a year versus Ottawa’s plan.
Citizens have until Nov. 30 to comment on the climate and green plan at www.manitobaclimategreenplan.ca.
Options for the carbon tax revenue include returning it to low-income families, emission reduction projects and even offsetting rising hydro bills, Pallister said.
Keystone Agricultural Producers (KAP) president Dan Mazier is pleased purple fuel won’t be taxed.
“I think that is a big win for the (farm) industry,” he said in an interview. “It’s an acknowledgment that agriculture is different and it needs to be exempt.”
To extend the exemption to barns and dryers, Mazier said farmers should call their members of the legislative assembly.
The plan points to grassland preservation and restoration to store and reduce carbon emissions — something the Manitoba Grassland and Forage Association (MGFA) supports.
“We are enthused with the Manitoba Climate and Green Plan, especially with potential for forages and grasslands to be such proactive solutions within the plan going forward,” MGFA executive director Duncan Morrison said in an email. “We realize there’s work ahead and we’re ready to do what we can to help this Made-in-Manitoba plan take shape and activate for the betterment of our province.”
Whether Manitoba’s biggest single carbon emitter, Brandon’s Koch Fertilizer, pays a carbon tax is uncertain. By 2019 Koch, along with seven of the province’s other biggest emitters, including mines and the Husky ethanol plant in Minnedosa, will have negotiated with the Manitoba government emission caps based on industry standards.
If they exceed the limits they pay the carbon tax on the overage. If under they’ll get credits, which can be applied to future overages or sold.
Mazier is pleased the plan is finally available for KAP members to discuss.
A year ago KAP started developing its position on pricing carbon, triggering backlash from farmers who wanted KAP to oppose the tax.
KAP’s position called for a farm fuel exemption and proposed some of the carbon tax revenue be used to assist farmers to reduce emissions and protect the environment. The climate and green plan propose just that.
“I think our hard work and the bullets we were dodging last winter… it was probably the right decision (to develop a position)… but it’s still yet to be determined what the membership decides,” Mazier said.
“I feel the province really listened to what we had to say because we were at the table.
“There is that saying, ‘if you’re not at the table, you are usually on the menu.’”
Unpopular at times
At a public meeting in Altona this March 30, some farmers threatened to form a new right wing party to challenge Pallister if he pursued a carbon tax.
Asked if he thought the Progressive Conservative’s base would be appeased by Manitoba’s carbon tax and green plan, Eichler said: “I certainly hope so.
“If Manitobans say no then we’ll get the Trudeau plan…
“We want the best results for Manitobans and if we can save some money doing it and manage the money ourselves… I think that’s pretty significant.”
The federal government is less impressed.
“The (carbon) price schedule has to be $50 by 2022, which is well beyond the price of $25 per tonne that Manitoba is proposing,” the Canadian Press quoted federal Environment Minister Catherine McKenna as saying last week.
Ottawa can impose a carbon tax on provinces, but a legal opinion rendered for the Manitoba government concludes Manitoba can legally defend its own carbon tax, Pallister said, adding he hopes the matter doesn’t end up in court.
“I don’t think they’d win in court, but I would prefer that in the court of public opinion it be made clear to Ottawa that our better plan is the one supported by Manitobans,” he said.
The federal carbon tax doesn’t credit Manitobans for their huge, ongoing investment in hydro electric power, Pallister said.
Without hydro Manitoba’s current emissions would be 42 megatonnes a year — double the current level.
“Because Manitoba is already ‘clean’ with its hydroelectric power grid, it will require higher carbon prices to achieve equivalent emissions reductions compared to other provinces,” the plan says. “That would mean higher and higher carbon prices for fewer and fewer relative emissions reductions. That makes no sense.”