Carbon tax plan headlines Manitoba budget

The Golden Boy atop the Manitoba Legislature (Charles Gardet, via Wikimedia Commons)

The Manitoba government says it’s going to give the revenue from the federally-mandated carbon tax back to Manitobans through tax reductions elsewhere.

Several farm groups questioned how agriculture will be impacted by the carbon plan following the release of the provincial budget on Monday by Manitoba Finance Minister Cameron Friesen.

“Farmers don’t have the option to pass on costs as prices paid to farmers for their production are set globally, based on world market demand, so Manitoba prices cannot be altered to pass on additional production costs and taxes to customers,” emphasized Dan Mazier, president of Keystone Agricultural Producers, in a statement following the budget’s release. “We are hopeful that the government recognizes these costs and makes the investments back into the sector to help farmers adapt to climate change, a measure not included in the current budget.”

As previously announced, diesel and gas marked for farm use will be exempt from the carbon tax but “it’s a myth that farmers will be entirely exempt from the carbon tax. We know from the experience of farmers in other provinces that costs are passed on by the inputs and service suppliers that farmers rely on,” noted Mazier.

“Why punish our industry that sequesters so much carbon with growing crops? The government has pledged to give back the carbon revenues in the form of tax deductions, but the effect this has on producers isn’t clear,” asked Gunter Jochum, Manitoba director for the Western Canadian Wheat Growers Association.

The province says the $25 per tonne of carbon dioxide-equivalent tax will take effect in Manitoba on September 1, adding 5.32 cents a litre on the price of gasoline, 6.71 cents a litre on diesel, 3.87 cents a litre on propane, and 4.74 cents a cubic metre on natural gas.

The government has not said that it will exempt heating fuels for agricultural use (eg. greenhouses, grain dryers, and barns.)

“We are hopeful that the government of Manitoba doesn’t make the same mistake that British Columbia did when it introduced their carbon tax and included it on space heating fuel. It saw a mass exodus of investment in their greenhouse sector south into the United States and was forced to create a rebate program the following year,” said Mazier.

KAP is wanting more information on how a $102 million “Conservation Trust Fund” announced in the budget will be allocated, and whether agriculture could be in line for some of the funds, which are to be administered by the Manitoba Habitat Heritage Corporation. “We are hopeful that projects supported by the fund will include on-farm initiatives that deliver ecological goods and services to all Manitobans, including carbon sequestration and flood mitigation,” said Mazier.

Outside of the area of carbon tax and conservation, the province announced that it will be raising the amount of business income eligible for the small business tax rate from $450,000 to $500,000 — “good news” as this will put Manitoba in line with the other Prairie provinces, noted Wheat Growers director William Pallister.

KAP also expressed concern about the increase in farmland assessments, which was not addressed in the budget. The group says farmers are seeing another major increase — in the range of 50 to 75 percent — in municipal and school taxes.

“Farmers pay a disproportionate amount of education taxes, and we urge the government to conduct the K to 12 education review it has promised, including funding, as soon as possible,” Mazier said.

The budget speech itself referred to agriculture employing more than 33,000 Manitobans, generating around $6 billion in annual economic activity. It also highlighted the roughly $1 billion in private investment going toward the new Roquette pea processing plant and Simplot potato plant expansion at Portage.

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