Manitoba expands carbon tax holiday, excludes exemption on natural gas

On November 23, Manitoba tabled a plan to suspend the 14-cent-a litre provincial carbon tax on gas and diesel between January 1 and June 30.  However, Premier Wab Kinew clarified he would not seek an exemption for most Manitobans who heat their homes with natural gas.

Manitoba expands carbon tax holiday, excludes exemption on natural gas
Facebook/ Wab Kinew
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Manitoba’s NDP government is giving taxpayers a carbon tax holiday next year, but don’t expect them to seek an exemption on natural gas.

On November 23, the province tabled a six-month plan to suspend the 14-cent-a-litre provincial carbon tax on gas and diesel at the pumps between January 1 and June 30.

In conjunction, Premier Wab Kinew said on November 1 that he would submit a formal request to the federal government to participate in its geothermal retrofit program.

"Now that the federal government has indicated that there’s the potential for other provinces to participate, that’s something we’re going to follow up on," he said.

However, Kinew clarified he would not join the western battle cry to "axe the tax" nor seek a carbon tax exemption for most Manitobans who heat their homes with natural gas.

Neighbouring Saskatchewan threatened on October 30 to stop collecting the federal carbon tax on natural gas — a measure they’ve tabled legislation on with effect January 1. It is expected to save the average family $400 next year, receiving unanimous support from the opposition NDP.

Further west, Alberta Premier Danielle Smith also called for "an end to the failed carbon tax and the burden it places on each of us and our families."

Trudeau currently charges Manitobans 12 cents per cubic metre on natural gas, but an exemption would save the average household about $300 this winter, said the Canadian Taxpayers Federation (CTF).

"We want to have a strong, productive relationship," said Kinew, rather than engage in legal battles with Ottawa over the carbon tax.

In October, Prime Minister Justin Trudeau announced a three-year pause for the carbon tax on home heating oil while committing federal funding for geothermal heating systems in eastern Canada.

"We want […] greater fairness for Manitobans," added Finance Minister Adrien Sala.

Meanwhile, Manitoba's carbon tax suspension bill, which has undergone several amendments to include off-road and farm vehicles, remains before the committee, reported CTV News. 

"We know that working-class people across this province drive a lot," said Sala, "We’re confident […] this legislation will help everyday Manitobans."

The bill, expected to pass before the end of session on December 7, gives the provincial cabinet the power to extend the tax break for another six months if needed.

In a bid to curb the rising cost of living, the minister said that the $163 million reprieve will save the average family with two vehicles approximately $250 over the six-month period.

"That means every time you fill up the family minivan, you are paying about $10 in just carbon tax," said the Taxpayers Federation.

Although CTF praised the Manitoba government for tabling carbon tax reprieve, they said it does not go far enough to counter rising costs.

"It’s great that premier Kinew is axing the gas tax but it’s not great if you save on your bill at the gas pump but then you get hammered at the end of the end of the month with a huge carbon tax bill on your natural gas," CTF Prairie Director Gage Haubrich told the Winnipeg Free Press.

According to the Parliamentary Budget Officer (PBO), "most households will see a net loss, paying more in the federal fuel charge and GST, as well as receiving lower incomes."

It will cost the average Manitoba household $386 this year after the federal carbon tax rebate, added Haubrich, warning Kinew’s tax suspension will only "spare drivers from the pain […] for a moment."

On April 1, 2024, drivers will be punished again for filling up their vehicles with Trudeau set to increase the carbon tax on gas to 18 cents per litre. 

By 2030, that number will be 37 cents per litre, with the average Manitoba household paying $1,490 annually in carbon taxes. At that time, filling up that same family minivan will cost almost $40 in carbon tax alone.

Those costs exclude the second carbon tax that Trudeau imposed in July, which will add an additional 13 cents per litre to the cost of gas at the end of the decade.

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