Manitoba (Canada) plans new carbon taxation for large emitters

The government of Manitoba (Canada) has released a new discussion paper laying out an output-based pricing system (OBPS) for a few large industrial emitters with annual emissions of at least 50,000 tCO₂eq. So far, only six companies operating in Manitoba meet the criteria for the OBPS and municipalities or gas distribution networks would be exempted as they don't compete on international markets. Large emitters would be exempt from paying carbon taxes on their production volume up to a certain level that will be established individually. This system would then be based on a complete different framework than the current CAD25/t (around US$19.5/t) that was introduced for households and companies in March 2018.



Manitoba's CAD25/t tax was unveiled in October 2017, introduced in March 2018 and is expected to remain at that rate through 2022. The Federal government welcomed the decision as a big step forward but also warned Manitoba that it has to rise the tax amount up to CAD50/t in 2022 or face federal action. However, Manitoba disagrees with the CAD50/t objective and believes that keeping a CAD25/t tax by 2022 is fairer and more consistent.



Canada's nationwide climate-change strategy includes a carbon tax which has to be either adopted by the provinces or imposed by the federal government, beginning at CAD10/t in 2018 and rising up to CAD50/t by 2022. This objective is a key pillar in Canada’s strategy to meet its Paris Agreement target of reducing greenhouse gas emissions (GHGs) by 30% below 2005 levels by 2030.