Freeland, Kinew sidestep carbon tax questions as they share podium to announce Hydro projects

Federal Finance Minister Chrystia Freeland and Premier Wab Kinew shared a podium in Winnipeg Thursday morning but sidestepped questions about Manitoba's request for a carbon-tax exemption for natural gas home heating.

Freeland and Kinew announced $476 million in combined federal-provincial funding to upgrade Manitoba Hydro's 112-year-old Pointe du Bois generating station on the Winnipeg River and build a new east-west transmission line across southern Manitoba.

The announcement took place four days after Kinew added his voice to a chorus of provincial leaders who want the federal Liberal government to remove the carbon tax from all forms of home heating.

Prime Minister Justin Trudeau announced an exemption for home heating oil, a fuel used primarily in Atlantic Canada, in October and has since said there will be no more carbon-tax cutouts.

Neither Freeland nor Kinew, who met on Wednesday evening, would discuss the intergovernmental disagreement over the carbon tax.

"I know you'll understand that the contents of a preliminary meeting that the finance minister and I have together are going to remain between us," Kinew said at the news conference on the second floor of Manitoba Hydro's downtown headquarters.

Freeland said both governments are committed to affordability but did not explicitly mention the carbon tax.

"I am absolutely convinced that we share the same values, we share the same priorities," she said.

The funding announced by the two leaders works out to $314 million to replace eight generators at Pointe du Bois and $162 million for the new transmission line across southern Manitoba, formally known as the Portage area capacity enhancement project.

The upgrades to Pointe du Bois, the oldest Manitoba hydro-electric station still in operation, will add 52 megawatts to Manitoba Hydro's generating capacity, the federal and provincial governments said in a press release.

Manitoba Hydro's capacity stands at 6,600 megawatts, a level achieved after more than a century of hydro-electric development.

In an "energy roadmap" published in July, the province said it may have to boost its generating capacity to 10,000 or even 16,000 megawatts by the 2040s to meet a growing demand for electricity.

Manitoba Hydro said in August that it may need to rely on its last remaining natural-gas-fired plant in Brandon — and potentially new gas-fired plants — while the province ramps up its generating capacity.

Hydro CEO Jay Grewal said Thursday those new plants could involve methane capture from landfills. 

Right now, the City of Winnipeg flares off the methane it captures from the Brady Road landfill to reduce its impact as a greenhouse gas but does not use the methane as a fuel.

The province and Ottawa also said Thursday the new transmission line across southern Manitoba will reduce Manitoba Hydro's reliance on the Brandon natural gas plant, thereby cutting emissions at that plant by one third.

The Brandon plant is supposed to operate during cold midwinter months, either on an emergency basis or when Hydro needs more power to supplement its existing capacity.

Widespread drought conditions across the Lake Winnipeg basin forced Hydro to begin operating its Brandon plant in October, far earlier than normal.