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Canada's Manitoba Announces Low Carbon Tax Policy

by Mike Godfrey,, Washington

01 November 2017

The Government of the Canadian province Manitoba has announced plans for a CAD25 (USD19) per tonne carbon tax, to be introduced in 2018.

The Government said that the CAD25 per tonne price is half the amount mandated by the federal Government, and will mean that Manitoba has the second-lowest carbon price in Canada by 2022.

In December 2016, the federal Government and all but two provinces and territories agreed to the Pan-Canadian Framework on Clean Growth and Climate Change. Under this framework, a federal carbon pricing option will apply in provinces without a provincial carbon pollution pricing system in place in 2018.

Federal carbon levy rates will initially be set for the period 2018-2022. Rates for each fuel subject to the levy will be equivalent to CAD10 per tonne of CO2 in 2018, and increase by CAD10 per tonne annually to reach CAD50 per tonne in 2022.

The Manitoban rate of CAD25 per tonne will not rise after 2018, and a full review of the carbon pricing plan will take place in 2022.

According to the Manitoban Government, the scheme will save families and businesses over CAD260m compared with the federal carbon tax over the next five years. It said that the average Manitoba household will save CAD245 over the same period.

Premier Brian Pallister said: "Our Made-in-Manitoba Climate and Green Plan will cost less and reduce more than the made-in-Ottawa carbon tax. Our lower carbon price respects the massive hydro investments Manitobans have made over decades to build one of the cleanest electricity systems in the world."

The Manitoban carbon levy will include exemptions for agricultural emissions, and will not be applied to marked fuels used by farmers for their farming operations. Agricultural operations will be able to contribute to carbon sequestration and offset trading systems to be established in Manitoba and other provinces. Large industrial emitters will be able to reduce their emissions through an output-based pricing system of performance standards, offsets, and credit trading.

The Manitoban Government expects cumulative emissions to fall by more than one megaton over the next five years.

In a statement posted on Facebook, Catherine McKenna, the federal Minister for the Environment, said that Manitoba had taken a "big step forward on climate action." However, she added that the federal Government has "laid out the price schedule we need to see, which reaches CAD50/tonne by 2022 – well beyond the CAD25/tonne carbon price Manitoba is proposing."

McKenna said that the federal Government will assess each province and territory each year on whether their approaches to pricing pollution meets the required standard. "So when Manitoba moves forward with this proposal, they'll be in good shape for the first year and the second year. After that, they'll need to up their game," she said.

TAGS: environment | tax | investment | business | tax thresholds | tax rates | carbon tax | Canada | revenue statistics | standards

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