The Province of Manitoba could make significant environmental improvements by making more strategic use of tax breaks, fees and charges. That's according to the non-profit environmental group Resource Conservation Manitoba. RCM says the Province's current approach to environmental issues is piecemeal and uncoordinated, and does not adequately integrate economic signals into environmental policy.

For instance, while promoting energy conservation, the Province continues to levy a sales tax on home insulation and high-efficiency furnaces. Such policies run counter to one another. It's just one example of what has prompted RCM to recommend a move to "ecological fiscal reform." That approach would use taxes and strategic incentives -- together with voluntary measures, programs and regulation -- to address problems like landfill waste, Lake Winnipeg water quality, and climate change.

In a brief to the Manitoba Finance Minister, RCM says the current system of fees and taxes leads Manitobans to consume and waste too much, and fails to reward those who conserve and take steps to reduce pollution. A coherent program of green economic instruments would provide incentives for conservation. Polluters and energy wasters would pay more.

"RCM is calling on the provincial government to examine how its policies on fees and taxes are impacting the environment," says Harvey Stevens, Chair of RCM's Policy Committee, who co-authored the report. "At this point, we are not presenting them with a specific wish list of measures to be adopted, but we are strongly recommending that they take a close look at how fiscal measures could be used to promote sustainable practices and discourage unsustainable ones."

Stevens points to research on ecological fiscal reform done by the National Round Table on the Economy and the Environment, which highlights the role of such measures in the move toward a more sustainable economy. He notes that the National Round Table recommends the strategic use of fees and credits as part of a package of policies addressing specific environmental problems.

Click here to read RCM's discussion paper Ecological Fiscal Reform: A Realistic Approach to Achieving Sustainable Development in Manitoba (pdf file).

Definitions

"Fiscal policy" means government taxation and expenditure policy. It includes the mix of fees, taxes and charges that governments use to raise revenue, along with the tax credits, rebates and exemptions that encourage desired actions.

"Ecological fiscal reform" means redirecting fiscal policy to help achieve the goals of sustainability.