Hydro chair says Manitoba’s new carbon tax could be used to offset rising rates

WINNIPEG — The chair of Crown-owned Manitoba Hydro says the province should use some revenue from its planned carbon tax to offset sharply rising electricity rates.

The provincial utility is seeking annual rate hikes of eight per cent over the next few years to help it deal with ballooning costs from two new projects: the Keeyask generating station and the Bipole Three transmission line. Regulatory hearings on the application are scheduled to start Monday.

The proposed rate hikes are being opposed as unnecessary and unaffordable by groups such as the Consumers Association of Canada. Board chairman Sanford Riley said in a speech to the Manitoba Chambers of Commerce the province could help lowincome earners and others deal with the rate hikes by diverting some of the $260 million a year it expects to collect from a carbon tax that will be enacted next year. “My own view is that it would be entirely reasonable for the government to use this revenue to soften the blow for those who are most affected,” Riley said Friday. Manitoba’s Progressive Conservative government has announced plans to enact a $25-per-tonne carbon tax at some point next year. It would have a negligible impact on electricity rates, because most electricity in the province is hydro-generated and does not produce carbon.

It would add about five cents to a litre of gas and also apply to natural gas and coal.