Fuel, natural gas prices to increase with new carbon tax in Manitoba: Pallister

Manitoba rolls out carbon tax plan The Pallister government's long awaited green plan detailing a carbon tax is out. Jeff Keele breaks down the cost for Manitoba families.

Manitobans could soon pay more to drive and heat their homes.

The Pallister government unveiled its own green plan that includes a $25 per tonne carbon tax that will be levied on fuel and natural gas in 2018.

The tax will see five cents added to a litre of gasoline and a family of four would pay an average of $114 more per year on home heating if their furnace runs on natural gas.

The government says altogether, a family of four will pay $356 a year more annually.

Electric furnaces and farm operations would be exempt.

The plan says this will reduce emissions by one million tonnes over five years.

The province says the tax will generate $260 million a year. Some of the money collected could be used as offsets to help people with hydro rate increases.

The plan defies a mandate by Ottawa that calls for a $50 per tonne tax by 2022.

A summary of the green plan says to help cut emissions the province might ban food waste from landfills, replace 100 diesel buses with electric buses and require all diesel sold at the pumps to contain 5 per cent of biodiesel.

A handful of large industrial emitters, such as the Koch Fertilizer plant in Brandon, will pay an output-based carbon price similar to the plans proposed by the federal and Alberta governments. They will be given a target for emissions and pay the $25-per-tonne levy only on the amounts above that level.

Pallister has long criticized the federal government's $50-per-tonne demand. He says Manitoba should get credit for the billions of dollars it has spent developing clean-energy hydroelectricity.

Pallister released a legal opinion from a constitutional law expert earlier this month that said Ottawa has the right to demand or impose a carbon tax. But the expert also said Manitoba might be able to defend a lower price in court if its tax were as effective as the federal plan in reducing emissions.

Saskatchewan is the only province that has threatened to not impose a carbon tax at all.

With files from Steve Lambert/The Canadian Press