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'The cost of everything goes up': businesses, consumers bracing for carbon tax impact
The carbon tax has Manitobans bracing to pay more for fuel and home heating, but the impact could have a further hit on your pocketbook.
Businesses are bracing for higher costs and experts say you can expect those costs to be passed onto consumers.
The federal government is requiring all provinces and territories to introduce carbon pricing.
Under Manitoba's plan, the price of natural gas will go up 4.7 cents per cubic metre and gasoline will cost an additional 5.3 cents a litre.
University of Winnipeg economics professor Phil Cyrenne said consumers will feel the impact beyond the price at the pumps and on their home heating bills.
"Part of the problem with a fossil fuel tax, is really what it is, is that's an input into everything,” said Cyrenne. “If you look at your grocery store, they have heat their building. Supermarkets — they have to transport goods to get there."
The cost of diesel will rise 6.7 cents a litre. The Manitoba Trucking Association said the province's green plan fails to help transportation companies switch to more fuel efficient trucks.
MTA executive director Terry Shaw said the carbon tax will cost the trucking industry an additional 50 million dollars in fuel costs annually which it says will be passed on to consumers.
"The clothes you wear, the food you eat, everything at some point touches a truck," said Shaw. "If the cost input of transporting those goes up then the cost of everything goes up."
Cantor’s grocery store owner Ed Cantor is bracing for the impact.
"You just wait and play it by ear,” said Cantor. “We’ll have to see what happens with the suppliers, if they’re going to tack on any extra costs onto our products.”
The Pallister government has promised to return all revenue collected from the carbon tax, which is paid to the province, to Manitobans.
The government said that will happen over the next four years through personal income tax relief and by rolling back to the PST to seven per cent by 2020.
Even with those commitments, shopper Paul Pelletier, who just paid for a cart of groceries, expects he won’t break even.
"They say it's supposed to be revenue neutral but it never is, hey, we're always going to pay out more than we get back so it's not really revenue neutral," said Pelletier. "We'll have less money to do other things or maybe less holidays."
Winnipeg Transit has said based on 2017 fuel consumption, the carbon tax will mean costs would increase by approximately $1.2 million annually.
The Winnipeg School Division has also allocated funding in its latest budget to cover an expected $400,000 carbon tax bill.
The province said the carbon tax will also apply to aviation fuel for all flights except for international passenger flights outside of North America and any cargo flights outside of Canada.
Both Air Canada and the Winnipeg Airports Authority said it's too soon to know what impact,if any, this could have.