Decryption | Can Saskatchewan really stop collecting the carbon tax?

A new revolt from Saskatchewan risks undermining carbon pricing in addition to raising questions about the state of the Canadian federation. The tax is no longer collected on natural gas sold for domestic heating in this western province. Analysis of the implications of this new standoff with Ottawa.

Reminder of history

Premier Scott Moe ordered Crown corporation SaskEnergy to stop collecting the carbon tax on natural gas on March 1er January. He was thus reacting to the exemption granted a few months earlier on fuel oil deliveries by the Trudeau government, which affects the Atlantic provinces more. Saskatchewan and Alberta, supported by Pierre Poilievre’s Conservatives, cry injustice and demand a suspension of the carbon tax on all types of heating, including natural gas used by a vast majority of citizens in these two provinces . This would be a new breach in this flagship policy of the Trudeau government. “In reality, there are different rules per region of the country, depending on whether voters voted Liberal or not,” Saskatchewan government spokesperson Matthew Glover said by email on Monday. Although it shares Saskatchewan’s point of view, Alberta has not stopped collecting the carbon tax on natural gas which is distributed by around forty companies and not by a crown corporation. “I would not ask our private sector operators not to respect the law,” said Alberta Premier Danielle Smith in October.

Can a province stop collecting a federal tax?

At first glance, no. But it is the courts that are likely to decide in this matter. At the beginning of the month, SaskEnergy already launched a lawsuit in Federal Court against the Minister of Revenue, Marie-Claude Bibeau, and the Attorney General of Canada, Arif Virani, saying it was caught between a rock and a hard place. She requests that the federal government remove her from the list of distributors registered under the Greenhouse Gas Pollution Pricing Act. Its managers and employees run the risk of receiving a substantial fine and even face imprisonment. Scott Moe’s government adopted Bill 151 in December to make the minister responsible for SaskEnergy also responsible for any decision concerning the carbon tax and thus protect its leaders from negative repercussions. They would be compensated by the government in the event of a fine or legal recourse. “What is clearly at first glance a gesture of defiance which seems contrary to the primacy of the Constitution, when it is carried out subtly, yes, there is space for the provinces to resist the application of federal law,” explains the constitutionalist Patrick Taillon. But space isn’t infinite and as soon as it goes too far and they stretch the rubber band too much, it’s going to blow in their face. » The matter could also end up before the Tax Court of Canada.

Is this rebellion from Saskatchewan justified?


Professor of political science at the Saint-Jean campus of the University of Alberta Frédéric Boily

“It’s been a while since the western provinces, Saskatchewan and Alberta, have felt marginalized with all the climate change policies put forward by Justin Trudeau’s government,” notes Frédéric Boily, science professor. politics at the Saint-Jean campus of the University of Alberta. In addition to their anger at the suspension of the carbon tax on fuel oil deliveries, they are also angry at other policies to reduce greenhouse gas emissions such as the Clean Electricity Regulations. “We don’t have the impression that we have the necessary tools to make a rapid transition (towards green energies) even as citizens,” he notes. The impact of the fight against climate change hits them harder since they both produce oil. From their point of view, the government is rushing ahead without giving them enough time to adapt. Everything is also amplified by the election scheduled for this year in Saskatchewan.

What could be the impact of this revolt on the carbon tax?

“The biggest fear is that the federal government will continue to back away from implementing a price on carbon and increasing it over the coming years,” explains the head of Greenpeace Canada’s Climate-Energy campaign. , Patrick Bonin. “The breach that has been created must not open further, that is certain,” he adds. The Trudeau government has repeatedly said that it will not grant new exemptions. He deplores that this “small political maneuver by Saskatchewan” obscures the broader debate on solutions to global warming and their implementation.

What does the federal government say?

The federal government will cut the carbon tax reimbursement to which Saskatchewanians are entitled if the province persists in not collecting it. Citizens therefore risk paying the price for this standoff. “Canadians rightly expect everyone to follow the law – and the validity of the price on pollution has been upheld by the Supreme Court of Canada,” recalled by email Katherine Cuplinskas, press secretary to Finance Minister Chrystia Freeland. These checks total $1,360 for a family of four for the 2023-2024 tax year. “This support which goes directly to families is conditional on a province having the federal price on pollution,” she added. However, a survey by the Angus Reid firm shows that citizens of the eight provinces where the federal carbon tax applies do not always make the link between this check and the tax they paid on their natural gas bill.


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