Man. plans farm fuel tax, manure system tax credit

CORRECTED, April 18, 2012 — A new three-cent-per-litre tax on marked gasoline, and a new tax credit for manure management systems, are in the first budget by Manitoba’s former agriculture minister.

Line items in provincial Finance Minister Stan Struthers’ budget, delivered Tuesday, included ongoing support for Manitoba Hydro projects, such as Bipole III, and an 2.5-cent increase to the tax on unmarked gasoline and diesel fuel, to an even 14 cents, effective May 1.

The new three-cent tax on previously exempt marked gasoline also takes effect on that date. Marked diesel remains untaxed.

For farming purposes, marked fuel has been available tax-free for use in farm equipment, designated farm trucks, heating or cooling farm buildings, or fueling on-farm grain dryers.

Tax rates on unmarked fuels such as propane, butane, locomotive fuel, aviation fuel and heating fuel remain unchanged.
The increased fuel taxes, in all, are expected to raise $48.6 million in the full fiscal year.

Vehicle registration fees will also increase by $35. Revenue from the increased fees and gas tax will go toward infrastructure funding.

"There are challenges ahead of us," said Struthers. "Many flood-damaged roads and bridges are in need of repair."

Capital investments

The province’s planned refundable nutrient management tax credit for livestock producers will be equal to 10 per cent of the capital cost of prescribed nutrient management equipment that’s designed to meet water quality requirements The assets must be acquired and available for use after Tuesday and before 2016.

Capital investments that qualify for the new credit must be environmentally sound, installed for use in Manitoba and help to improve the water quality of Lake Winnipeg.

Eligible assets include solid-liquid separation systems, anaerobic digesters, gravity settling tanks, manure treatment systems, manure composting facilities and, for operators with fewer than 300 animal units, storage tanks suitable for winter manure storage.

The tax credit is expected to save eligible producers about $300,000 over the full year.

On the other hand, Manitoba Beef Producers noted, the province has announced it will end its previous riparian tax credit program.

"Although uptake has been low in recent years, we are disappointed that the province did not adopt the proposed changes to the program that would increase uptake, rather than eliminate the program entirely," MBP president Ray Armbruste said in a release.

Struthers acknowledged Tuesday it has been a difficult year for farmers and noted improvements have been made to the province’s AgriInsurance and Excess Moisture Insurance (EMI).

In January, the province announced an (EMI) top-up of $15 per acre, providing coverage of up to $80 per acre for land too wet to seed by June 20.

"Return to balance"

Overall, core government spending is to decrease by 3.9 per cent this year. Ten departments will see their budgets reduced or frozen in 2012, and the number of health authorities will decrease to five from 11.

Among sin taxes, the per-cigarette rate on tobacco will rise to 25 cents from 22.5, effective midnight, April 17. The province also plans to incur cost savings by merging the Manitoba Liquor Control Commission with the Manitoba Lotteries Corporation.

Furthermore, Struthers announced, the province plans to cut back the number of government-appointed agencies, boards and commissions.

Despite these moves, Manitoba still expects a budget deficit of $460 million this year.

"Through record flooding last year and a global recession, we’ve worked to protect jobs and services families count on and our plan is working," Struthers said. "We are on track to return to balance by 2014."

Also noteworthy for farmers on a list of planned moves aimed at reducing poverty in Manitoba, the province pledged Tuesday to work with "partners" on ways "to make milk more affordable in northern Manitoba."

CORRECTION, April 18, 2012: The previous version of this article incorrectly stated the three-cent-per-litre tax on marked gasoline would also apply to marked diesel. The editor regrets his error.

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