Manitoba carbon tax smart politics but trouble for feds: observers

Manitoba’s plan for a carbon tax priced well below the federal standard is a smart political move, and the latest sign that there’s trouble brewing for the federal government over the centrepiece of its national climate change strategy, analysts say.

On Friday, Environment Minister Catherine McKenna had a message for Manitoba Premier Brian Pallister, who announced Friday morning that his province will impose a $25-a-tonne carbon tax next year that won’t increase over time. The federal government has said all provinces and territories will need a $10 levy in place in 2018 that will rise by $10 annually to $50 per tonne in 2022.

“When Manitoba moves forward with this proposal, they’ll be in good shape for the first year and the second year,” McKenna said in a statement on Facebook. “After that, they’ll need to up their game.”

McKenna was reluctant to say whether or how the federal government will enforce its own standard.

“We’ll be assessing each province and territory each year on their approach,” she told reporters in a conference call. McKenna said provinces will have to meet the federal benchmark price by the end of each year, but declined to say what will happen if they don’t.

Manitoba’s announcement is clever politics, said Mel Cappe, a commissioner of Canada’s Ecofiscal Commission, in that it may force the federal government to try to impose its own tax on top of the provincial levy to meet the federal standard.

“What Pallister’s done is made it look like he’s done something and forced the feds to do the right thing,” he said. “The province won’t bear the political cost. It sounds smart to me.”