The Government of Saskatchewan says its natural gas utility will stop collecting the carbon tax from residential customers starting Monday.
The move comes after Prime Minister Justin Trudeau exempted those who use heating oil at home from paying the tax, largely benefiting residents of the Atlantic provinces.
Saskatchewan requested an exemption for all other forms of heating, but Ottawa rejected the request. In response, the province said it would stop charging these fees in early 2024.
SaskEnergy Minister Dustin Duncan said the deadline for paying the tax to the federal government is the last day of February.
If SaskEnergy fails to remit that amount, it would violate federal law and executives could face fines or prison time.
However, Saskatchewan has passed legislation to protect executives from legal consequences, placing this burden on the province.
Mr. Duncan said in December that SaskEnergy had asked the federal government to revoke its status as a registered natural gas distributor.
He said the company wanted Ottawa to name the province as its distributor instead.
The sooner we get clarity from the federal government on whether they recognize the bill and agree to this registration change, I think that will determine our next steps in decision-making in January [de ne pas verser la taxe]said Mr. Duncan.
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The Minister responsible for SaskEnergy, Dustin Duncan. (archive photo)
Photo: The Canadian Press / Michael Bell
The Canadian Press asked the Canada Revenue Agency if it had delisted SaskEnergy.
The agency said in a statement that the Greenhouse Gas Pollution Pricing Act prevents it from discussing details of specific cases.
SaskEnergy declined interviews on the matter and referred media inquiries to the provincial government.
Mr. Trudeau said he expects all provinces to follow the law. He also said heating oil costs much more than natural gas.
Ottawa also said the carbon pricing system provides rebates, putting more money in the pockets of most Canadians, and that the revenue flows back to the provinces where the fees are imposed.
Saskatchewan has argued the average resident can expect to save $400 next year by not paying the tax.
SaskPower was also involved
Also starting this month, Saskatchewan will no longer impose a carbon tax on those who use electricity to heat their homes.
However, the province does not expect any legal consequences for the decision because it controls the carbon tax that applies to its electricity supplier, SaskPower.
Mr Duncan stated that SaskPower would deposit the amount customers paid for these levies into an investment fund.
He said the move will cost SaskPower more than $3 million this year.
The reason we decided to tell SaskPower to withhold all of these carbon tax payments is because we don't want to risk the federal government stepping in and saying, “You're not abiding by our agreement, so you're taking them all back.” means,” Mr. Duncan said.
The Saskatchewan Party government has argued it plans to use money from the fund for zero-emissions power projects, including potentially a small modular nuclear reactor.
Carbon taxes imposed on other large emitters must be paid into a separate technology fund for projects that reduce, sequester and capture emissions.
Saskatchewan sued Ottawa over the carbon tax in 2021, but the province lost its lawsuit when the Supreme Court ruled it constitutional.