WINNIPEG - Manitoba's Progressive Conservative government has changed course and has agreed to bring in its own carbon tax, but is cutting the provincial sales tax as well.
Premier Brian Pallister says his government plans to enact a $25-per-tonne tax, starting July 1, and will lower the provincial sales tax by one point to six per cent at the same time.
Pallister originally planned a $25-per-tonne levy in 2017, but withdrew it when the federal government said it was not high enough.
The federal government then imposed its own tax on Manitoba and three other provinces, and that tax is set to rise to $50 a tonne by 2022.
Pallister is still fighting the federal levy in court, although a date for the Federal Court hearing has not been set.
Pallister says he hopes the federal government will abandon its demands and respect Manitoba's plan.
"Of course I'm disappointed Ottawa didn't see the wisdom of supporting a government which has been willing to expend the political capital of proposing to bring in a carbon tax when no other conservative government would," Pallister said Thursday.
Saskatchewan has also challenged the federal tax and its case is to be heard this month in the Supreme Court. Manitoba is an intervener in that hearing.
Pallister, who has faced criticism from some supporters over his willingness to implement a carbon tax, said cutting the sales tax will help people and the economy.
"The PST dropping increases our competitiveness as a province, helps us achieve our job-creation goals, helps put more money disproportionately into households where there is less discretionary income."
The sales tax drop will bring Manitoba in line with Saskatchewan's six per cent rate. It is the second time Pallister has cut the PST. He reduced it to seven per cent from eight last year, shortly before calling an early election.
