In a surprise announcement on March 5, 2020, Manitoba Premier Brian Pallister announced that the province will be introducing a flat $25 per tonne carbon levy and reducing its provincial sales tax (PST) rate to 6%, effective July 1, 2020. It is intended that these changes will help Manitoba become one of Canada’s cleanest and greenest provinces, while also reducing costs for residents.
The province anticipates that Manitobans will save roughly $1 billion in carbon taxes over five years with the reintroduction of the “Made-in-Manitoba Green Levy” when compared to the federal fuel charge. The Premier also commented that 100% of the revenue generated by the green levy will be returned to Manitobans by way of the 1% reduction in the PST rate. This is based on an assumption that the annual savings attributable to the PST rate reduction will exceed the annual cost of the green levy by $40 million.
The Premier’s announcement was short on specifics concerning these two changes. However, we expect that further details concerning both changes will be communicated in the province’s budget, which is scheduled to be released on March 11, 2020.
The Premier’s announcement and a backgrounder on the “Made-in-Manitoba Green Levy” can be found at:
Manitoba Green Levy and PST Reduction News Release
If you have any questions about how these changes might impact your organization, please do not hesitate to call the Ryan TaxDirect® line at 1.800.667.1600.