Prime Minister Justin Trudeau has cautioned Saskatchewan Premier Scott Moe that his decision to discontinue collecting and remitting carbon taxes on natural gas has put him in direct conflict with the Canada Revenue Agency (CRA). “I don’t know about you, but having an argument with CRA about not wanting to pay your taxes is not a position I want anyone to be in. Good luck with that, Premier Moe,” Trudeau stated in Oakville, Ontario on Wednesday.
Moe had announced in late October that SaskEnergy, the provincial natural gas utility, would cease remitting the carbon charge on natural gas effective January 1, 2024. The province subsequently announced that SaskPower would follow suit for electricity used for home heating. In November, the province enacted legislation designating itself as the registered distributor of natural gas within its borders.
On February 20, the CRA acquiesced to the Saskatchewan government’s request to become the distributor, replacing SaskEnergy. Moe’s actions follow the federal government’s announcement of a three-year exemption from the carbon tax for home heating oil, a fuel commonly used for heating homes in Atlantic Canada. Moe argued that this exemption created “two classes of taxpayers” and “effectively excludes Saskatchewan.”
Trudeau reiterated his stance on Wednesday that his government will not eliminate the carbon tax rebate that Saskatchewan residents receive from the federal government for paying those taxes. He argued that attempting to recoup that money by eliminating the rebates would punish Saskatchewan residents for Moe’s “ideological opposition to fighting climate change and putting more money in the pockets of Saskatchewan families.”
“CRA is an independent organization that is very, very good at getting money it is owed from Canadians, from businesses, and now from provinces if it has to,” Trudeau said. “We don’t have to do anything as a federal government. The CRA is independent and will go through its proper judicial, legal processes and I have no doubt it will get there eventually.”
The federal carbon price, or backstop, does not apply in Quebec, British Columbia, and the Northwest Territories, as they have their own carbon pricing systems that meet the federal standard. In provinces using the federal backstop, the carbon price is applied to emitting fuels through fuel charge rates that vary based on the amount of CO2-equivalent emissions they generate when burned. Ninety percent of government revenues from the carbon tax are returned to households through a rebate program, with the remaining 10% directed to programs that assist businesses, schools, municipalities, and other grant recipients in reducing their fossil fuel consumption.
The parliamentary budget officer has consistently found that nearly all households receive more from the carbon tax rebate than they pay in direct and indirect costs. Only households in the highest income quintile are projected to pay out more than they receive, due to their higher consumption.
NDP Leader Jagmeet Singh criticized the government’s carbon pricing policy on Wednesday, calling it “divisive” and forcing Canadians to choose between affordability and fighting climate change. Singh promised that his party would develop a plan that makes life more affordable while reducing emissions and holding major polluters accountable.
During the 2021 federal election, Singh pledged to maintain the federal carbon pricing policy. The NDP platform stated: “Putting a price on carbon has been an important tool in efforts to drive up emissions reductions. We will continue with carbon pricing while making it fairer and rolling back loopholes this Liberal government has given to big polluters.”
