MBiz

CARBON PRICING T he issue of carbon pricing, climate change, and the role Canada needs to play is not easy to comprehend. But one thing is clear — the federal government is trying to take a giant leap toward having Canada play its part by making a case for cutting greenhouse gas emissions by 30 per cent from 2005 levels by 2030. The issue of how we do it, and how fast we get there, is the real problem. While addressing the issue in his October announcement for a pan-Canadian solution, Prime Minister Justin Trudeau said the provinces could create a cap-and-trade system or put a direct price on carbon pollution — but they must meet the federal benchmark or "floor price." The proposed price on carbon dioxide pollution, under the national plan, would start at a minimum of $10 per tonne in 2018, rising by $10 each year to $50 per tonne by 2022. However, a one-size-fits-all federal solution does not work across the board. Saskatchewan Premier Brad Wall has taken an aggressive approach by calling out Trudeau and his plan. Premier Wall says the carbon tax would likely push oil rig companies south of the border, resulting in fewer people working in Saskatchewan's already struggling oil and gas sector. Most recently, that province's environment minister made it clear that Saskatchewan would never allow a carbon tax. That alone puts further pressure on the competitive imbalance that already exists across jurisdictions, not to mention the impact to Manitoba firms doing business in the U.S. The Trump administration has made it clear climate change is not on its radar, creating an even more tilted playing field. For the past year, the Manitoba Chambers of Commerce (MCC) has been examining and researching the issue and the impacts of carbon pricing. While the provincial government has committed to developing a made- in-Manitoba plan, to date, we are left with no specifics. As it stands, MCC remains concerned the pressure to create a provincial solution, different from the federal plan, could be done too hastily without knowing the potential ramifications to both Manitobans and the business community. At our recent Annual General Meeting, a significant amount of discussion centered around the province's plans for carbon pricing. The popular theory is that a carbon price under the Manitoba plan would be $30 per tonne, likely to be felt in a six to nine cent per litre increase at the gas pumps. MCC has been at the forefront in presenting the government with ideas to lower taxes and find ways to allow Manitobans to keep more of their hard-earned money. Before any final decision is made on carbon pricing in Manitoba, the Chamber believes it is important that the provincial government share its research related to the impacts of a made- in-Manitoba plan. We will also be asking the province to provide a suitable business case framework and economic assessment (including tax implications) of its cost and impact, shared with Manitobans through proper consultation. MCC understands the approach the provincial government is being pressed into making, but believes Manitobans should be more engaged and educated on the potential impact any (provincial or federal) program will have and why it is needed. The goal should be to make a case for a change, along with creating a viable plan for Manitoba. ■ CARBON PRICING Its Potential Imprint and Impact on Manitoba By Cory Kolt 12 MBiz | june 2017

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