What price should Manitobans pay for carbon and who should pay it?

It’s tough to find much agreement on those questions. The agricultural industry is calling for levy exemptions for fuels, fertilizers and animal emissions, while the diesel-dependent trucking industry wants a much lower levy. The provincial government is keen for a lower carbon price than the feds want and to somehow ensure billions of dollars paid to build a hydroelectric power grid are recognized.

Premier Brian Pallister plans to offer farmers exemptions from the carbon price. But a producers’ organization says farmers should also receive incentives to ensure their fields reduce pollution, since farms can offer “carbon sinks” that remove pollution from the atmosphere.

“In agriculture, we do have a real answer to the problem,” said Dan Mazier, president of Keystone Agricultural Producers. “We’re the second biggest (Manitoba) emitter and if we started working with Manitobans on that, that would be huge.”

In 2015, the province estimated agriculture accounts for 31% of Manitoba emissions while transportation accounts for 39%.

Mazier believes farmers must be exempt from carbon tax to allow them fair international competition with those who don’t pay it. But, if levied carefully, he doesn’t expect a carbon price would spell disaster for producers.

“They’ve had carbon tax in Alberta ... and B.C. and those provinces haven’t shut down,” he said.

Other industries are calling for a reduced levy. Terry Shaw, executive director of the Manitoba Trucking Association, said the carbon levy should be much lower than the federal proposal that would start in 2018 and reach $50 a tonne by 2022.

“No business can assume that kind of cost increase over a five-year span, especially for an industry like us, where diesel is such a critical component,” said Shaw.

Shaw said a much lower carbon price would make sense, if the revenue was invested to help diesel-dependent companies reduce their reliance on fossil fuels.

Manitoba’s Sustainable Development Minister Rochelle Squires said she expects a legal opinion on whether the federal government has the authority to impose a set carbon price on provinces “very soon.”

When asked if she has any concern that a reduced levy could fail to trigger much change in fuel use, Squires stressed that price is just one piece of the province’s climate-change plan.

“I don’t think it’s fair to separate carbon pricing from the entire Made-in-Manitoba Climate Plan. I think carbon pricing is one tool in the tool box and I don’t think it’s fair to say carbon pricing (is) going to be the exclusive opportunity that we have to help modify behaviour,” said Squires.

Manitoba’s plan is expected to be released sometime this fall.

The Pallister government has also mused about using carbon tax revenue to offset Manitoba Hydro debt, since that hydroelectric infrastructure produces green power. The past NDP government estimated Manitoba would have produced another 430 megatonnes of carbon emissions between 1990 and 2013, if it had relied on fossil fuels instead of cleaner hydro power.

Conversely, others are convinced the federal model offers only a starting point for carbon pricing that must rise higher.

“Ultimately, we have to move to putting a higher and higher price on those fuels,” said Curt Hull, a program manager at Climate Change Connection.

Hull noted that in 2022, the federal plan proposes a levy that would add on 11.63 cents per litre of gasoline, noting that rate doesn’t exceed sporadic market fluctuations on gas prices that we’ve already seen.

“If you add 11 cents, it’s still around a dollar,” said Hull. “I don’t think that would be the difference between making it or breaking it.”

Hull said carbon revenues should fund rebates for low-income Manitobans who actually can’t afford the tax.

jpursaga@postmedia.com

Twitter: @pursagwpgsun

BY THE NUMBERS

Carbon tax by the numbers - Here’s a look at what some key energy sources would cost Manitobans, if federal backstop pricing applies here:

Proposed federal base carbon price:

2018: $10 per tonne

2019: $20 per tonne

2020: $30 per tonne

2021: $40 per tonne

2022: $50 per tonne

Price increase the proposed federal levy would create on select fuels from 2018 to 2022:

Gasoline:

2018: 2.33 cents per litre

2019: 4.65 cents per litre

2020: 6.98 cents per litre

2021: 9.30 cents per litre

2022: 11.63 cents per litre

Diesel/light fuel oil:

2018: 2.74 cents per litre

2019: 5.48 cents per litre

2020: 8.21 cents per litre

2021: 10.95 cents per litre

2022: 13.69 cents per litre

The estimated cost to Manitobans:

The provincial government has not released estimates on the revenue the tax would raise for the province yet. Several officials have stated it would be in the hundreds of millions of dollars per year by 2022, if the federal price applied. The Canadian Taxpayers Federation, which is part of a coalition fighting the tax, offered the following estimates for key fuels:

2018: $62,021,104

2019: $123,865,102

2020: $185,801,954

2021: $247,652,803

2022: $309,667,056

(Note: CTF estimates are based on average Manitoba fuel use and the federal minimum carbon price for gasoline, diesel, light fuel oil and gas liquids (main fuels).

Sources: Environment and Climate Change Canada, Canadian Taxpayers Federation