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Manitoba brings in its own carbon tax, cuts PST to 6%

Premier Brian Pallister announced today that the province will impose a carbon tax on fuel, forging ahead with Manitoba’s “Green Plan” after negotiations on the federal tax that is now levied on fuel failed.

Pallister also announced the PST will be cut to 6% on July 1, the same date it implements a flat $25 per tonne carbon tax.

Ottawa has imposed a federal carbon tax, now sitting at $20 per tonne, on Manitoba after the two governments could not agree on a GHG-reduction plan.

The federal carbon tax is set to rise again to $30 on April 1. That will mean diesel will cost an additional 1.5 cents per litre and gasoline, 2.2 cents per litre.

The provincial government’s earlier estimates of a $25 carbon tax saw diesel fuel rising by 6.7 cents per litre and gasoline by 5.32 cents a litre.

Pallister told reporters Thursday he expects Ottawa will back down from its carbon tax when Manitoba’s green levy comes into effect July 1. Ottawa has said previously that any carbon tax it imposes would be as a top-up to Manitoba’s levy.

Recently, an Alberta court agreed with the provincial government there that the federal tax cannot be imposed on resistant provinces, finding it was an unwarranted breach of provincial jurisdiction. Courts in Saskatchewan and Ontario, however, have sided with the federal government, finding the tax constitutionally valid. The issues is expected to be heard by the Supreme Court of Canada next month.

Manitoba announced late last month it was proceeding with its own legal challenge.