Federal carbon tax now in effect in Manitoba, Saskatchewan

Rebates available, sometimes more than taxes

Prepare to pay more at the pump – the federal carbon tax is now in effect in both Manitoba and Saskatchewan.

The tax will take on two forms, as an output-based price system for industrial operations with high emissions and as a charge on fossil fuels.

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Factories and other industrial facilities that produce more than 50,000 tonnes of carbon dioxide or carbon dioxide equivalent a year will be covered by the new tax. Smaller facilities that emit between 10,000 and 50,000 tonnes of carbon dioxide equivalent each year will be able to opt into the system voluntarily.

One of those facilities is the Hudbay complex in Flin Flon. A Hudbay official said the company was aware of the coming announcement, adding that the company had already budgeted an increase in payments as a result of the tax.

Part of the tax will be applied to several types of fuel, including gasoline, diesel, natural gas and propane. Gas prices are estimated to increase by 4.42 cents a litre, while propane will increase by 3.1 cents a litre. Natural gas will see a 3.91 cent per cubic metre increase.

The increase to gasoline prices evens out to about two dollars per fill up for a mid-size car or up to an extra four dollars per fill for a brand new Ford F150.

Aviation fuel will cost just under an additional five cents per litre, while kerosene will increase in cost by 5.16 cents per litre under the new tax.

The federal government estimates that the tax will raise around $1.9 billion over the next five years, with 90 per cent of the money raised heading back to consumers. The additional 10 per cent, about $190 million in the next five years, will go toward infrastructure spending such as schools, roads and medical facilities.

Despite the introduction of the new tax, many families may stand to make a profit this year through Climate Action Incentive payments. The federal government estimates the average cost of the carbon tax on a Manitoba household to be $232 this year. In 2019, a single adult will receive a $170 rebate, with a couple receiving $255 in total rebates. A family of two adults and two children will bring a total of $339 in rebates. Single parents will receive a rebate of $85 for their first child and a $42 rebate for every additional child. All Manitoba taxpayers will be eligible for Climate Action Incentive payments on their tax returns.

In addition, people living outside Winnipeg will receive a special supplement, equivalent to 10 per cent of the original rebate payment received. As an example, the family of four who would receive $339 in rebates would receive an extra $33.90 if the family lived in a rural area.

As part of the new tax, fuel purchases to generate electricity in northern communities will be subject to full relief to fuel charges. Exemption certificates will be used to counteract the additional charges on light fuel oil, such as diesel.

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