Pallister unveils Manitoba carbon tax with farm fuel exemption

Manitoba farmers won’t be paying a carbon tax on farm fuel, but questions remain about other costs that farms will bear from carbon pricing and where new tax revenues will be spent.

Premier Brian Pallister and Sustainable Development Minister Rochelle Squires unveiled the province’s “Made-in-Manitoba Climate and Green Plan” on Friday.

The federal government wants all provinces to charge a minimum of $50 per tonne on carbon emissions by 2022, starting with $10 in 2018. The Manitoba government plans to defy Ottawa and implement a flat $25 per tonne rate for the next five years, citing the billions of dollars Manitobans have already invested in reducing emissions through Manitoba Hydro’s renewable energy. For gasoline, it’s the equivalent of 5 cents per litre.

“Our Made-in-Manitoba Climate and Green Plan will cost less and reduce more than the made-in-Ottawa carbon tax,” said Pallister. “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.”

It will start and stay at $25 per tonne. It will not rise to $50 per tonne as the federal government wants. We call it the Prairie Price – low and level like the prairies.

— “Made-in-Manitoba Climate and Green Plan”

The discussion paper says farms will be exempt from the carbon levy on marked diesel and gasoline. Asked whether the exemption applies to fuel for farm space heating and grain driers, Pallister indicated those details will be announced at a later date.

There was no specific mention of addressing indirect costs that will be passed down to farmers, for example, from fertilizer production and grain transportation. However, the province says it’s setting up a program for large industrial emitters, such as Koch Fertilizer in Brandon, to pay through an output-based pricing system, where they will only have to pay the $25/tonne levy when emissions exceed a target threshold set by the province. There will also be credits allocated for future use when below the standard.

“It’s definitely a lot better than some of the other scenarios out there, what it could have been,” Keystone Agricultural Producers president Dan Mazier, told RealAgriculture, when asked whether the output-based policy for large emitters will mean less carbon tax cost passed on to farmers.

Agricultural emissions will also not be targeted for direct sector reductions.

Also of note for agriculture, the province says its biodiesel mandate will be raised from 2 percent to 5 percent to reduce transportation emissions.

As for whether farmers will see incentives or opportunities to be paid for further reducing emissions and increasing carbon sequestration, the province says it will be consulting Manitobans on how the carbon tax revenue should be spent. The province has launched a forum for Manitobans to share their views and suggestions between now and November 30th.

Regarding agriculture, the plan says the province could consider the following initiatives:

  • A province-wide ecological goods and services program (eg. ALUS)
  • supporting on-farm beneficial management practices (BMPs) that provide climate change adaptation and mitigation
  • developing a Centre for Sustainable Agriculture to “support adaptation and resilience research, to seek new technologies to decrease emissions from crops and livestock, and to explore commercialization opportunities”
  • Expand the adoption of precision farming technologies that improve fertilizer use efficiency
  • support research for the use of natural fibres in composites
  • evaluating and developing strategies to respond to risks and opportunities facing farmers due to climate change and extreme weather events.

More of the fine print on how the levy will be applied and details on how the tax revenue will be spent will be announced before the next provincial budget in spring 2018.

More to come.

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