New carbon tax starts coming in for four provinces that fought federal plan

People in Manitoba,Ontario, Saskatchewan and New Brunswick will be paying more for gasoline andheating fuel Monday when the federal government's carbon tax begins inprovinces that refused to impose their own emissions pricing.

The federal tax is $20 atonne for this year and is set to increase by $10 annually until it reaches $50a tonne in April 2022.

The starting rate adds4.4 cents to the price of a litre of gas, about four cents to a cubic metre ofnatural gas, and also drives up the cost of propane, butane and aviation fuel.

There is uncertaintyabout how widespread the impact will be, how businesses will receive rebates,and whether the tax will survive court challenges underway in two of the rebelprovinces.

Todd Lewis, president ofthe Agricultural Producers Association of Saskatchewan, said while farm fuel isexempt from the carbon tax, the levy does apply to that used in commercialtrucks and trains moving grain off farms and bringing in seed and equipment.

"As we move ourcommodities, we're going to have increased costs. Simple as that," Lewissaid in an interview.

"There's no way forus to pass these costs along. If you're a grocery store or a dry cleaner, ifyou're costs go up, you can pass them along to the consumers, but weparticipate in a world market."

The business communityalso has unanswered questions. The federal government has yet to reveal detailsabout a program to rebate some of the increased costs faced by small- andmedium-sized businesses.

Residents of the fourprovinces will be getting rebates as well on their income tax returns. Therebates start at $128 annually, vary between provinces and increase for peoplewith spouses or dependents at home.

The federal governmentsays the carbon tax is a sensible way to protect the environment -- put a priceon activities that pollute to discourage emissions, and give back most or allof the money through income taxes.

The holdout premiershave been vocal in their criticism.

Ontario Premier DougFord has described the carbon levy as a "job-killing" tax that willincrease prices on everything. He has warned that it could cause a recession --a claim economists dispute.

Ford has tweeted nearlydaily about the tax over the last two weeks -- his caucus members havecontributed dozens more -- and has held news conferences to rail about it.

An Ontario court is setto hear the government's constitutional challenge of the carbon tax in April. ASaskatchewan court has already heard similar arguments and is expected todeliver its verdict shortly.

New Brunswick PremierBlaine Higgs's government argues the tax will punish the province's large ruralpopulation because there's no option to ditch vehicles for public transit.

In Manitoba, ProgressiveConservative Premier Brian Pallister initially intended to implement a lowercarbon tax, and demanded the province be recognized for spending billions tobuild clean hydroelectric infrastructure. He dropped the idea and joined theprotesting provinces when Ottawa refused to accept the lower rate.

Pallister said the taxcomes at a time of economic uncertainty for Manitobans.

"Uncertainties forpeople who are concerned about trade ... or people who are concerned abouthigher interest rates for mortgages when they come up for renewal."

Pallister suggests thefederal rebates may not be enough to offset increased costs businesses willface, which could be passed on to consumers.

"The proposed plandoes not consider ... the multiplier effects of these taxes on the people webuy things from."

Beverly Gilbert, aCalgary tax adviser, says the carbon tax will affect Canada's competitiveness.

"The U.S. does nothave any kind of carbon levy or carbon charge so it makes it more difficult tocompete internationally," she said.

Speaking Sunday in Brampton, Ont., federal Conservative Leader Andrew Scheer denounced the tax as just another way to take money from Canadians. - The Canadian press

"The Liberal carbon tax is not an environmental plan,"Scheer said. "This is nothing but a tax grab."