Manitoba to drop sales tax by one percent to counter carbon tax

The government says they will be moving forward with cutting the provincial sales tax, along with a $25-per-tonne tax on July 1. The provincial sales tax will be dropped by one point, to six percent.

The Manitoba Progressive Conservative government has big plans for the federal carbon tax—one that few expected.

The government says they will be moving forward with cutting the provincial sales tax, along with a $25-per-tonne tax on July 1. The provincial sales tax will be dropped by one point, to six percent.

Pallister had previously attempted a $25-per-tonne tax in 2017, though Ottawa shot down the idea.

The Trudeau government then moved forward with imposing a tax on a handful of provinces, including Manitoba. That tax is set to hit $50 a tonne by 2022.

A date for the Federal Court hearing for Pallister has not yet been set.

“Of course I’m disappointed Ottawa didn’t see the wisdom of supporting a government which has been willing to expend the political capital of proposing to bring in a carbon tax when no other conservative government would,” said Pallister in a statement Thursday.

Pallister’s plan to cut the sales tax, he says, will boost the province’s economy—even with a carbon tax in place.

“The PST dropping increases our competitiveness as a province, helps us achieve our job-creation goals, helps put more money disproportionately into households where there is less discretionary income.”

This is Pallister’s second sales tax drop. Last year, he dropped the rate to seven percent from 8 percent the previous year.

The six percent figure will put Manitoba tied at second-lowest in the country. Alberta does not have a provincial sales tax.