The Manitoba Lodges and Outfitters Association (MLOA) is hoping lodges and outfitters will find a reprieve from Manitoba’s pending carbon tax.
The organization said the new measure will damage tourism in Manitoba’s north and have lobbied the province to have an exemption from the tax for licensed operators.
Once implemented, the tax will mean extra charges on gasoline, diesel, natural gas and propane, including a 5.32 cent per litre increase for gas and a 6.71 cent per litre hike for diesel.
For an industry that relies heavily on boats, trucks, snowmobiles, airplanes and other vehicles, as well as diesel generators at remote outposts, northern tourism stands to be hit hard by a tax on fuel.
“I had some operators who told me this will cost them thousands of dollars per season,” said MLOA president Paul Turenne.
“Our industry has very few options. We don’t have a bunch of electric boats and bike paths that can get us to remote fly-in lodges. We buy fuel by the barrel. Our operators are heavy, heavy consumers of fuel and we have very few alternatives. When we hear the government say, ‘Everybody’s got to do their part,’ that’s great, but we don’t have another option.”
The tax, which is slated to take affect in September, will not only be applied to the fuel itself. More fees will be added to transportation used by outfitters to get fuel to remote areas and to tourists who fly or drive north or bring vehicles like boats or snowmobiles.
Turenne said the carbon tax will not only increase prices for fuel, but it will raise prices for tourists and suppliers.
“We saw in the budget speech, as a matter of fact, a line about ‘We’re working to increase tourism in northern Manitoba.’ That’s all well and good, except now they’re increasing costs for tourism operators in northern Manitoba,” he said.
“That means either the tourism operators keep their prices the same and have a harder go at it, or they increase prices, which makes us less competitive with Saskatchewan and other places that don’t have a similar tax.”
Exemptions
Turenne said the rules in the tax, which was unveiled March 12 along with the provincial budget, include exemptions for several nature and resource-based industries – but not outfitting.
“Those industries are all exempt from the new carbon tax. We don’t see how we’re any different than those industries – those are all resource-based industries, out there on the land, and so are we.”
The list of industries with exemptions includes those that are already exempt from the provincial fuel tax. Agriculture, commercial fishing, forestry, trapping and mining are all fields that have listed exemptions in the Manitoba government’s Fuel Tax Act.
In addition to fuel increases, the tax would include a carbon emissions tax of $25 per tonne. Federal mandates on carbon emissions may cause the tax to increase to $50 per tonne by 2023.
The Reminder reached out to Hudbay to determine if the company had received any exemption from the tax. Whether or not Hudbay will receive any exemption from the new carbon tax is unknown.
“We are assessing the situation given its recent announcement,” said a statement from Scott Brubacher, Hudbay director of corporate communications.
Turenne said he and the MLOA have written to both the Ministry of Finance and the Ministry of Sustainable Development to attempt to extend the exemptions. He said providing aid for lodges and operators could help northern tourism and provide incentive for operators to register with the provincial government.
“We’ve had issues with unlicensed outfitting, so people who are operating without a license. Outfitters have what’s called a Resource Tourism Operator’s Licence. That’s a provincial licence. That system already exists. It’d be simple enough to exempt anyone who has a valid Resource Tourism Operator’s Licence and it would also act as an incentive for people to be properly licenced. If they get five or six cents off every litre of fuel, it’s suddenly worth it for them.”
Flin Flon fuel
The institution of the carbon tax leaves Flin Flon in a unique situation. As a city situated on the Manitoba-Saskatchewan border, businesses located on the Manitoba side will be subject to increased taxes, while businesses in Saskatchewan, including those in Creighton and Denare Beach, are not directly affected. Saskatchewan has not instituted a provincial carbon tax.
For fuel stations, the end result could be an increase in per-litre cost on the Manitoba side. For consumers, it may mean lower prices in Saskatchewan – if business owners choose not to hike their rates along with the Manitoba side.
Tom Therien, the general manager of the North of 53 Consumers’ Co-op, operates two cardlock gas stations in the area – one in Flin Flon and one in Creighton.
He said he feels Saskatchewan-based fuel distributors will take advantage of the disparity and not charge more.
“I don’t think the prices will go up to match,” he said.
“Does it mean all my customers with the Flin Flon cardlock will head to Saskatchewan? That might be the end result, who knows. But why would somebody want to pay over six cents a litre more if they don’t have to? This time, you have something to compare it to in this city.”
Therien added that the gas from his stations is purchased in and comes to the area through Saskatchewan, removing potential fuel costs for transporting fuel up north.
“It’s not delivered to Manitoba and delivered back to Saskatchewan, it’s actually dropped off in Saskatchewan. So, I shouldn’t have to pay this carbon tax,” he said.
Therien wondered if the continued debate between the federal government and Saskatchewan, in which the provincial government has resisted any form of mandated carbon taxes, could upend the playing field for Flin Flon commerce and provide incentive for business people to set up in Saskatchewan.
“Is this going to be like a provincial sales tax, where the Manitoba government really doesn’t care that they are three per cent higher than Saskatchewan, when it comes to borders?” he said.
“The provinces are trying to get Saskatchewan into it and for whatever reason, they decided not to – good, bad, or indifferent, it’s hard to say. But it causes problems when we deal with the border situation.”
