Manitoba premier says he'll take federal government to court over carbon tax

Manitoba Premier Brian Pallister says "threats" from the federal government to raise the carbon tax above the flat rate he is proposing are endangering the province's economy and he's prepared to take them to court over it.

Ottawa has ordered the provinces to impose a tax of $10 per tonne this year, and increase that amount by $10 each year until it reaches $50 in 2022.

Pallister has proposed a flat rate of $25 per tonne for this year. The Trudeau government has said it would impose its price on any province that doesn't match it.

"I have a simple message for Ottawa today. Back off, or we'll see you in court," Pallister said, adding that he believes recent comments published in media reports by federal spokespeople amount to an "empty threat."

Pallister cited a legal opinion provided to the province which he believes showed there are grounds for a court challenge if Ottawa tries to override a provincial climate plan.

Despite that, Pallister argues that by saying they would impose a higher tax on Manitobans than the province, the federal government is injecting uncertainty into the province's economy. Given the current federal pricing schedule, the federal carbon tax would exceed Manitoba's by 2020.

"If you think you're going to be paying a higher carbon tax in two years, you'll be afraid, you'll be reluctant to make investments that you might have made otherwise, you'll be less inclined to expand a business," he said.

A spokesperson for federal Environment and Climate Change Canada said Manitoba's current plan "puts them in very good shape this year and next."

"The federal price schedule is clear. We've also been clear that we will assess each province and territory each year against the federal benchmark. Carbon pricing plans from provinces and territories are due September 1. We will complete the first review of those plans shortly after that," the spokesperson said in an email.

Pallister's comments 'bizarre': Kinew

Pallister also took a swipe at the Manitoba NDP's promise to use all carbon tax revenue to fund green programs and help Manitobans transition to a lower-carbon lifestyle, while the PC plan would use the revenue to reduce taxes and lower the deficit.

Manitoba NDP leader Wab Kinew called Pallister's comments about taking the federal government to court "bizarre" and said the province's plan for using revenue from the tax contradicts promises they made that the tax would be revenue neutral.

"I think the premier probably spent a lot of time over the past year concocting this elaborate scheme where he'd be able to pad his general government revenues and then blame it on Trudeau, and then now we've exposed it for what it is, and so I assume he's upset about that," Kinew said.

"This government still can't point to a single program that is going to be put into place that the average family in our province could access to make the transition to a lower-carbon lifestyle."

The NDP recently announced it plans to delay a vote on the province's carbon tax bill until the fall, pushing implementation of the tax past the Sept. 1 deadline.