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Manitoba To Join Pan-Canadian Climate Plan

by Mike Godfrey, Tax-News.com, Washington

27 February 2018


Manitoba is to join the Pan-Canadian Framework on Clean Growth and Climate Change, following its announcement of a CAD25 (USD19.70) per tonne carbon tax.

Rochelle Squires, the province's Minister of Sustainable Development, wrote to the federal Environment Minister, Catherine McKenna, to announce Manitoba's decision.

Squires said that Manitoba is prepared to adopt the framework immediately, "on the understanding that by doing so we are not agreeing to the price schedule set out in the federal carbon pricing benchmark or to application of the federal backstop."

Her letter noted that Manitoba's carbon pricing approach "differs from the federal pricing benchmark and projected price schedule." However, she also explained that she has been "advised that we do not have to resolve these differences now, but rather we can move forward with adoption by simply respecting and reserving the positions of our governments."

Federal environment minister McKenna replied that Manitoba's "commitment to carbon pricing appears on track to meet the federal standard this year and next, but would need to be strengthened to hit the standard in the years thereafter."

McKenna confirmed that the federal Government will make Manitoba's full allocation under the Low Carbon Economy Leadership Fund.

As with all other territories and provinces, Manitoba's approach to carbon pricing will be reviewed each year against the federal benchmark.

In December 2016, the federal Government and all but two provinces (Manitoba and Saskatchewan) 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 price from this year.

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.

In November 2017, Manitoba announced that it would introduce a CAD25 per tonne carbon tax from 2018. The Manitoban rate of CAD25 will not rise after 2018, and a full review of the carbon pricing plan will take place in 2022. The CAD25 per tonne price is half the amount mandated by the federal Government and will mean that Manitoba will have the second-lowest carbon price in Canada by 2022.

TAGS: environment | tax | tax rates | carbon tax | Canada | tax reform

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