Manitoba Premier Pallister sees wiggle room in carbon tax fight with feds
Brian Pallister cited a legal opinion suggesting he would likely lose a a direct court challenge against Ottawa's plan, but there may be a work around
Risk & Compliance
Oil & Gas
WINNIPEG—Manitoba Premier Brian Pallister says it appears the federal government has the right to force a carbon tax on the provinces, but there may be some wiggle room when it comes to the exact amount.
Pallister released a legal opinion on the issue Wednesday from constitutional law expert Bryan Schwartz. He was hired to examine whether the province could win a court challenge against a plan to have the provinces impose a $50 per tonne carbon tax or have the federal government enact the tax itself.
“There is a strong likelihood that the Supreme Court of Canada would uphold the proposed carbon tax/levy. It would probably do so on the basis of the federal government’s taxation power,” says Schwartz’s report, which cost the province roughly $40,000.
“The Supreme Court of Canada is wary of allowing the division of powers between the federal and provincial levels of government to stand in the way of activist government, including in the subject matter of the environment.”
But Schwartz added that Manitoba might be able to get away with a lower tax level if it achieved the same reductions in emissions as the federal plan.
“Suppose Manitoba adopted its own ‘made-in-Manitoba’ overall (greenhouse gas) reduction plan, which would reduce … emissions just as effectively as the approved federal measures,” Schwartz wrote.
“Manitoba could then argue the federal government was arbitrarily denying its authority to craft its own legislative measures in response to the issue of (greenhouse gas) emissions.”
Pallister, who has already hinted at a lower tax rate in Manitoba, said he accepts the report’s findings. He has repeatedly said the province deserves credit for the billions of dollars it has invested in clean hydroelectric power.
A document obtained last month by The Canadian Press said the province was eyeing a $25 per tonne carbon levy. Pallister refused to confirm the amount Wednesday.
“I can’t comment on leaked documents. We’ll put out our plan when it’s put out and it’ll be one that will work better for Manitoba than the federal plan.”
Most provinces have gone along with the federal plan or had already adopted similar carbon taxes.
Saskatchewan is the only complete holdout. Premier Brad Wall has said he will fight the tax proposal, possibly through a lawsuit.
Ottawa wants the provinces to start with a $10-per-tonne tax next year that would ramp up to $50 a tonne by 2022.
Once it was fully phased in, the tax would add about $5.82 to the cost of a 50-litre tank of gasoline. The natural gas heating bill for the average single, detached home would rise by about $264 a year.
The document obtained by The Canadian Press said Manitoba has been considering an immediate $25-per-tonne amount next year, making more of an immediate sticker shock that could change’s people’s energy consumption.
It also outlines four areas where the money would be spent: tax relief for households, tax relief for businesses, investments in green projects and clean technology, and projects that deal with climate change effects such as flooding.