Under pressure, Manitoba sets $25/tonne carbon tax

WINNIPEG — The federal and Manitoba governments moved closer to a clash over carbon pricing Friday, as Prime Minister Justin Trudeau said his government will impose a carbon tax in Manitoba if need be.

“There will be a federal backstop and if any province doesn’t move forward in an appropriate way, the federal government will ensure that the equivalent price on carbon is applied to the specific jurisdiction,” Trudeau said in Saint-Bruno-de-Montarville, just east of Montreal.

“We will respect what Canadians asked us to do and show the leadership on protecting the environment and growing the economy that all Canadians expect of us.”

Any carbon-tax money collected by Ottawa in Manitoba would be spent in the province, he added.

Trudeau’s words came hours after Manitoba Premier Brian Pallister announced he will defy federal demands by introducing a carbon tax of $25 a tonne next year and keeping it at that rate. Ottawa has demanded provinces implement either a cap-and-trade system or a tax that would start at $10 a tonne in 2018 and ramp up to $50 a tonne by 2022.

Pallister indicated he is ready for a battle with the federal government, which he suggested is using intimidation.

“If Manitobans are favourable to our plan, I think it will be difficult for Ottawa to invoke theirs on our province,” Pallister said.

Most provinces have already agreed to follow Ottawa’s proposal. Saskatchewan is the only one threatening not to impose a carbon tax at all.

Federal Environment Minister Catherine McKenna said Manitoba will be in good shape for the first few years of the carbon pricing plan.

“After that, they’ll need to up their game,” she said in a statement on her Facebook page.

Pallister released a legal opinion from a constitutional law expert earlier this month that said Ottawa has the right to demand or impose a carbon tax. But the expert also said Manitoba might be able to defend a lower price in court if its tax were as effective as the federal plan in reducing emissions.

The $25 avoids hitting people too hard in the pocketbook, Pallister said, and gives Manitoba credit for the billions of dollars it has spent building its cleanenergy hydro-electric grid.