By CRM Staff
Toronto, Ontario — April 1, 2019 — Manitoba, Ontario, Saskatchewan, and New Brunswick drivers are all paying more at the pump, thanks to the federal government’s carbon tax which was set on the four provinces for refusing to impose emissions pricing of their own.
The federal tax, which came into effect Monday, is currently set at $20 a tonne and will increase by $10 annually until it reaches $50 a tonne in April of 2022.
The starting rate for the tax adds 4.4 cents to the price of a litre of gas.
It is still very uncertain as to how widespread the impact will be, how businesses will receive rebates, and whether the tax will survive court challenges underway in two of the rebel provinces.
Todd Lewis, president of the Agricultural Producers Association of Saskatchewan, explained that while farm fuel is exempt from the carbon tax, the levy does apply to that used in commercial trucks and trains moving grain off farms and bringing in seed and equipment.
“As we move our commodities, we’re going to have increased costs. Simple as that,” Lewis said in an interview.
“There’s no way for us to pass these costs along. If you’re a grocery store or a dry cleaner, if your costs go up, you can pass them along to the consumers, but we participate in a world market.”
The business community remains relatively in the dark, as the Federal government has yet to reveal details about a program to rebate some of the increased costs faced by small- and medium-sized businesses.
Citizens of the four provinces will be receiving rebates on their income tax returns, which start at $128 annually, but vary between provinces and increase for people with spouses or dependents at home.
The Federal government has defended the tax, saying that it is a sensible way to protect the environment, while putting a price on activities that pollute to discourage emissions, and give back most or all of the money through income taxes.
Ontario Premier Doug Ford described the carbon tax as a “job-killing” tax that will increase prices on everything.
An Ontario court is scheduled to hear the government’s constitutional challenge of the carbon tax in April. A Saskatchewan court has already heard similar arguments and is expected to deliver its verdict shortly.
New Brunswick Premier Blaine Higgs’s government argues the tax will punish the province’s largely rural population because there’s no option to ditch vehicles for public transit.
Manitoba Progressive Conservative Premier Brian Pallister initially intended to implement a lower carbon tax, and demanded the province be recognized for spending billions to develop clean hydroelectric infrastructure. He proposed the idea and joined the protesting provinces when Ottawa refused to accept the lower rate.
Pallister said the tax comes at a time of economic uncertainty for Manitobans.
“Uncertainties for people who are concerned about trade … or people who are concerned about higher interest rates for mortgages when they come up for renewal,” said Pallister.
Pallister mentioned that the federal rebates might not be enough to offset increased costs businesses will face, which could be passed on to consumers.
“The proposed plan does not consider … the multiplier effects of these taxes on the people we buy things from.”
Beverly Gilbert, a Calgary tax adviser, says the carbon tax will affect Canada’s competitiveness.
“The U.S. does not have any kind of carbon levy or carbon charge so it makes it more difficult to compete internationally,” she said.
