Manitoba Climate Change Task Force - International Institute for ...

Environmentally Sensitive Areas Tax Credit
Environmental tax credits, which compensate and recognize landowners who carry out
conservation practices, is one instrument that can be used to correct the distorted market
structure associated with ecological goods and services. The Manitoba Climate Change Task
Force applauds the government of Manitoba’s initiative to introduce an Environmentally
Sensitive Areas Tax Credit. A pilot program in partnership with the Northwest Soil
Management Association, Prairie Farm Rehabilitation Administration, Ducks Unlimited Canada,
Manitoba Conservation’s Sustainable Development Innovations Fund, and the Rural
Municipalities (R.M.s) of Mountain North and Strathcona was undertaken in Manitoba. The
pilot was designed to evaluate property tax credits as an economic instrument to promote
environmental stewardship at the landscape level and to determine the effectiveness of a
$1/acre property tax credit offered to all landowners in the two R.M.s. Specifically, the partners
determined that landowner attitudes and subsequent behaviour could influence the provision
of ecological goods and services through nominal incentives.
Historically, conservation programs paid landowners to complete a pre-approved conservation
project. Although this method of programming can be effective, it generally required a
relatively large amount of funding per project (i.e. landowner); consequently, the number of
projects that could be funded was limited. This made the programs restrictive in their ability
to reach a wide range of landowners and have an impact at a landscape level. Also, traditional
conservation programs were often structured in a way to restore natural functions that were
lost as opposed to conserving existing natural ecosystems. The Environmentally Sensitive Areas
Tax Credit has been designed to address these issues.
The two participating R.M.s in the pilot offered the credit on municipal land taxes to all eligible
landowners for one or more particular conservation practices. Eligible land uses include the
protection of, or conversion to native grassland, tame forage, wetlands, riparian buffer zones
and a minimum of 40 per cent residue cover on cropland available in the spring. A satellite
image of each R.M. was acquired annually and the appropriate ground truthing was performed
to confirm the eligibility of each application. Landowners received the credit on eligible land
when they paid their land taxes.
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