Environment Minister Catherine McKenna warned Manitoba's Progressive Conservative government on Friday that it will have to increase its newly announced $25-a-tonne carbon tax within three years or face federal action.
Despite the disagreement over details, Ms. McKenna welcomed as a "a big step forward" the decision by Premier Brian Pallister's government to adopt a carbon tax to reduce greenhouse-gas emissions, a policy that is often scorned by conservative politicians in Canada.
On Friday, Mr. Pallister announced that his government will impose a levy of $25 a tonne of carbon dioxide – or five cents for each litre of gasoline – to kick in next year and remain at that rate through 2022. In adopting the tax, the Premier warned of the looming climate crisis, the effects of which are already being felt in his province.
Ottawa plans to introduce legislation that will enforce its climate-change strategy, which includes a carbon tax – either adopted by the provinces or imposed by the federal government – beginning at $10 a tonne next year and rising to $50 a tonne by 2022. Mr. Pallister and Saskatchewan Premier Brad Wall were the sole holdouts on an accord forged last year by Prime Minister Justin Trudeau to address climate change – a deal that included the $50 levy.
While Ms. McKenna said the government is adamant that it will enforce its backstop, it won't have to do so until 2020, when the federal plan calls for an increase to $30 a tonne from $20 a tonne.
"We've made it clear that for a price to work, it has to keep on increasing," she said on a conference call from British Columbia.
"We've set out the federal standard and we'll be evaluating each province each year to make sure the province meets the federal standard. … The price schedule has to be $50 by 2022, which is well beyond the price of $25 per tonne that Manitoba is proposing."
However, Manitoba argues that by imposing a higher levy earlier, it will reduce slightly more greenhouse gases than the federal plan will over the five-year period. Mr. Pallister was unfazed by the federal threats.
"There's some element here, of course, of intimidation. Ottawa has told us that they're going to invoke a plan," he told reporters. "If Manitobans are favourable to our plan, I think it will be difficult for Ottawa to invoke theirs on our province."
Manitoba's carbon tax will apply to most suppliers of gasoline and diesel – for transportation, the heating of buildings and most industrial uses. However, the province will adopt a more flexible carbon levy for a half-dozen larger industrial users, including Koch Industries Inc.'s fertilizer plant in Brandon, which is Manitoba's largest single source of emissions.
British Columbia, Alberta, Ontario and Quebec all have a form of pricing on greenhouse-gas emissions, with a carbon tax in the Western provinces and a cap-and-trade system in central Canada. The Atlantic provinces are in the process of adopting their own carbon pricing plans, although neither Nova Scotia nor New Brunswick have indicated precisely how they will meet the federal standards.
The federal government's commitment to enforcing its carbon pricing plan is likely to face a stiffer test in Saskatchewan, where the Premier has stood as the most vocal opponent of carbon pricing. While Mr. Wall is set to retire early next year, his government reiterated its opposition to a carbon tax in its Speech from the Throne this week. Instead, it pledged to release a strategy to reduce emissions without relying on a tax.
In Alberta, all three candidates vying to lead the newly formed United Conservative Party have aggressively opposed the NDP government's rising carbon tax and have pledged to repeal it should they win the election scheduled for 2019.
Environmentalists said on Friday that the Manitoba plan does not go far enough, although they described it as an important step for a conservative government.
"We measure the provinces' pricing systems against their ability to meet their own stated objectives and against the commitment that Canada has made to the global effort under the Paris accord," said Glenn Murray, executive director of the Calgary-based Pembina Institute and a former environment minister in Ontario. "And this plan comes up short."