OAK HAMMOCK MARSH, Man. — Farmers discovered they had won the carbon tax exemption they had long fought for, when the Manitoba premier announced his province’s homegrown response to the federal requirement.
Even though farmers will be hit by higher prices on many things due to the $25 per tonne carbon tax, it will not be applied to farm fuel.
“Yes. Yes. Yes,” said Keystone Agricultural Producers president Dan Mazier when asked if he was relieved to find the farm fuel exemption actually in the Manitoba Climate and Green Plan document.
“It’s in black and white.”
Diesel and gasoline for farm operations will not be hit with the new tax, nor will agricultural carbon emissions be hit by any levies.
However, it is unclear whether propane, natural gas or other fuels used for heating barns or grain dryers will be subject to the tax, or what other farm inputs will face additional costs.
“We haven’t quite got that finalized,” said Manitoba Agriculture Minister Ralph Eichler, who was at the Oct. 27 announcement.
Manitoba’s $25 per tonne tax is intended to be applied from 2018 until 2022, when its impact and effectiveness will be studied.
It is only half the $50 per tonne that the federal government has been demanding in its federal framework for the provincially-applied taxes, but it will raise close to the same amount of money, the province says.
That’s because the federal plan begins at $10 per tonne and rises $10 per tonne per year until it hits $50, while the Manitoba one begins and stays at $25.
Manitoba and Ottawa have been scrapping over the tax ever since the federal government announced its intention to impose a nationwide tax, which provinces could either customize for provincial specificities or have Ottawa apply it on its own.
Whether or not the federal government accepts the “Made-in-Manitoba” plan is unclear.
The Manitoba government received a legal opinion that the federal government had the power to impose carbon taxes on provinces, but that a province that created its own tax regime that fulfilled the main purpose of the federal requirement would probably have legal justification.
With only farmers specifically exempt, many parts of the agriculture industry will still face carbon costs from 2018 onwards.
Meat packing plants, truckers and agriculture service providers will all probably face carbon taxes.
Manitoba Premier Brian Pallister defended the exemption for farmers as a recognition that they are “price takers” who cannot pass on their costs to customers, unlike many other businesses.
“We all know the farm sector is critical to our province. We should all understand that if farmers have a good year, Manitoba has a good year,” he said.
“Our ag community does not have the opportunity, as a price taker on the global market, to recover… additional costs.”
The Made-in-Manitoba Climate and Green Plan (PDF format) sets out a vast array of new initiatives to protect wetlands and watersheds, water quality, and wild species and habitats. Low carbon economy jobs will be encouraged through green infrastructure, clean technology, innovation financing, and skills and training, Sustainable Development Minister Rochelle Squires added.