Manitoba looking at carbon tax far below federal demand, draft documents show

The Manitoba government has been eyeing the possibility of charging a carbon tax of $25 per tonne half of what the federal government has insisted must be in place by 2022 according to a document obtained by The Canadian Press.

The document, titled the Climate and Green Plan Town Hall Toolkit, also says farmers would be exempt from the tax, and at $25 per tonne, it would raise $250 million annually.

Sustainable Development Minister Rochelle Squires said the toolkit is only a draft document, and no final decision has been made on what the carbon tax will end up being.

"The document in question is an internal draft document that I will not comment on," Squires said in a written statement.

"It is not government policy. We are continuing our work in developing a made-in-Manitoba climate and green plan by consulting with Manitobans including the business community and environmental and community stakeholders, as well as the federal government."

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Premier Brian Pallister has already signalled Manitoba is opposed to the federal demand. Ottawa wants the provinces to start with a $10 per tonne tax next year that would ramp up to $50 a tonne by 2022.

Once it's fully phased in, the tax would add about $5.82 to the cost of a 50-litre tank of gasoline. The natural gas heating bill for the average single, detached home would rise by about $264 a year.

Pallister has said Manitobans cannot afford the higher rate and the province deserves credit for spending billions of dollars on its clean hydroelectric grid.

He is also seeking a legal opinion on whether the federal government has the constitutional authority to order the provinces to either adopt a carbon tax, set up a cap-and-trade system or accept a federal levy of $50 per tonne with the revenue handed over to the province.

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The Saskatchewan government is also fighting Ottawa's plan, and opposing any price on carbon.

Federal Environment and Climate Change Minister Catherine McKenna said in May the federal government has the authority because environmental protection falls under its jurisdiction.

The draft Manitoba document examines a "flat" $25 per tonne tax through to 2022. It also outlines four areas where the money would be spent tax relief for households, tax relief for businesses, investments in green projects and clean technology, and projects that help deal with climate change effects such as flooding.

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Squires said once Manitoba settles on a price and other details, public consultations will be held before the plan is implemented.

"When we have completed that work we will publicly release our proposal ... including our approach to carbon pricing. At that time we will consult Manitobans even further for their specific input."