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Federal Backstop Still In Effect as Manitoba Pitches $25 Carbon Price by 2022

The Manitoba government is proposing a provincial carbon plan that sets a C$25-per-tonne carbon price as of 2022, just half of the $50 minimum in the pan-Canadian climate plan.

“Our lower carbon price respects the massive hydro investments Manitobans have made over decades to build one of the cleanest electricity systems in the world,” Premier Brian Palliser said Friday. He claimed the plan would “achieve more than twice as many emissions reductions as the federal carbon tax” between 2018 and 2022.

Prime Minister Justin Trudeau said the federal floor price on carbon will still apply to Manitoba.

“As we’ve said, there will be a federal backstop, and if any province doesn’t move forward in an appropriate way, the federal government will ensure that the equivalent price on carbon is applied to the specific jurisdiction—remembering, of course, that monies collected in one jurisdiction will always stay and be returned to that jurisdiction,” he said. “That’s something that’s very important within our federation and will continue to be.”

Environment and Climate Minister Catherine McKenna called the Manitoba plan a “big step forward”, but cautioned that the province will have to “up their game” once the federal minimum price hits $30 per tonne in 2020. Natural Resources Minister and Winnipeg MP Jim Carr added that “we’re glad they realize that putting a price on carbon pollution is in Manitoba’s interest. We agree with them. The price is not where we want it to be, but for the first two years we’ll be in a good place, and we’ll work together beyond that.”

Pallister and Sustainable Development Minister Rochelle Squires said the provincial plan would cut emissions by more than a megatonne—80,000 tonnes more than the federal carbon tax—and “additional greenhouse gas reduction actions set out in the plan would reduce emissions by more than double the federal carbon tax alone,” CBC reports. That claim came after the province sought a legal opinion on whether Ottawa could set a Canada-wide carbon price. Legal advisors “concluded Ottawa could impose the tax, provided Manitoba’s own system isn’t at least as effective as the federal option,” CBC notes.

Climate Change Connection Project Manager Curt Hull said the plan’s impact would depend on making low-carbon alternatives more attractive. “This announcement today moves the rudder off of dead centre, and it moves us in the right direction,” he told CBC. On the other hand, he warned on Huffington Post Canada, a 5¢-per-litre gas tax won’t be enough to change driving habits. “Nobody is really going to downsize their vehicle at that rate,” he said.

Pembina Institute National Policy Director Erin Flanagan agreed the lower carbon price would be less likely to shift behaviours. “A $50 price is going to drive different behaviours than a $25 price will.”

The Wilderness Committee’s Eric Reder called the plan “a fluffy document, with fancy graphics and blank pages. It seems the government is saying it could do these things, but won’t commit to anything, and will just go back into hiding on the environment file. This is no way to lead.”

The plan includes closure of the province’s last coal-fired generating station, various greening of government initiatives, a requirement that diesel contain at least 5% biodiesel, a 100,000-tonne target for diverting organic matter from landfills, and off-diesel initiatives for heavy trucks and 100 city buses, CBC notes. Farm fuels are exempt from the provincial carbon levy. Manitoba’s six large industrial emitters, which account for about 10% of the province’s carbon output, “would be able to reduce their emissions while having their competitiveness concerns addressed through an output-based pricing system of performance standards, offsets, and credit trading.”