HomeCarbon CreditsSaskatchewan Achieves Legal Win Over Canada's Federal Carbon Tax

Saskatchewan Achieves Legal Win Over Canada’s Federal Carbon Tax

In breaking news, the Saskatchewan government announced its successful court injunction to stop the Canada Revenue Agency from collecting the federal carbon tax in the province. This came as a joy for the Saskatchewan residents, amid all the tax burden they were carrying these years.

Court Halts Federal Collection Amidst Heated Constitutional Dispute

Releases from Global News stated that Bronwyn Eyre, the Satkatchewan provincial justice minister, and attorney general declared just a day before that,

“The court ruled in our favor, blocking the federal government from unconstitutionally garnishing money, pending the full hearing and determination of the continuation of the injunction by the Federal Court.”

She further argued that garnishing a provincial bank account violates Section 126 of Canada’s constitution. The issue is pressed for a full court hearing. Dustin Duncan, the minister of Saskatchewan’s Crown Corporations said that the application was successful. He said,

“The court has ruled in our favor and has blocked the federal government from – in our view – unconstitutionally garnishing money from the province of Saskatchewan. The injunction will be in effect pending a full hearing.”

He expressed hope that they would be in court this week to argue the merits of the successive steps. He was also confident of winning.

In defense, Minister of National Revenue Marie-Claude Bibeau said that the Canada Revenue Agency is actively collecting taxes as required by law. She emphasized their strong commitment to following the law. Bibeau pointed out that Saskatchewan did not comply, even though the Supreme Court of Canada said the carbon tax was okay. She affirmed that their goal is to treat everyone fairly and equally and to encourage environmental responsibility across Canada.

However, the legal tussle ended with Saskatchewan winning the battle against the federal carbon tax. Following this, the provincial government announced its successful court injunction to stop the Canada Revenue Agency (CRA) from collecting the federal carbon tax within the province.

In April, the CRA announced plans to audit Saskatchewan for not paying the carbon levies. Prime Minister Justin Trudeau defended the exemption for home heating oil users, citing its higher cost compared to natural gas. He wished Premier Moe “good luck” for this stance on CRA. Trudeau has further ruled out extending similar exemptions to other fuel users.

Saskatchewan Faced Increased Energy Costs in 2023

Last year, came heavy on Saskatchewan residents and businesses. They saw increases in their power and energy bills, as well as at the gas pumps. In 2022, the federal government approved Saskatchewan’s output-based performance standards (OBPS) for industrial emitters. This saved the industry an estimated $3.7 billion in federal carbon taxes by 2030 compared to federal carbon pricing.

As reported by top media agencies, the federal carbon tax also increased from $50 to $65 per tonne, with plans to reach $170 per tonne by 2030. In April 2023 the federal fuel charge raised gasoline costs to $0.14/litre. This carbon pricing system raised their bills.

SaskPower president & CEO Rupen Pandya remarked in a news release on December 9, 2023,

“We are striving to achieve these goals while keeping rates as low as possible while complying with a federal regulatory framework that requires us to collect additional carbon tax revenue.”

Thus, we can see that all the turmoil began a year back… It escalated when Scott Moe, premier of Saskatchewan opposed the federal decision to exempt home heating oil from the carbon tax in Atlantic Canada. He downrightly called it unfair. He demanded a similar exemption for natural gas in Saskatchewan, but Ottawa refused. That time Bronwyn Eyre also warned that the federal government has threatened to remove these rebates, impose fines, or even press charges against Saskatchewan officials. Consequently, residents continued to receive carbon rebate checks.

Significantly, the independent rate review panel in Saskatchewan suggested that the provincial government should postpone planned increases in rates for 2023-2024 and 2024-2025. They recommended keeping SaskEnergy’s 31% increase in gas prices from August and an 8% rise in delivery fees for the year. The provincial government is currently reviewing the panel’s report carefully. The carbon tax scenario, however, transformed this year and for the betterment of the Canadian province.

Saskatchewan emissionssource: Government of Saskatchewan (www.saskatchewan.ca)

Saskatchewan Families Enjoy Relief from Carbon Tax in 2024

Starting January 1, 2024, SaskEnergy and SaskPower removed the federal carbon tax from home heating. This decision can save ~98% of Saskatchewan families who were previously excluded from the federal exemption on home heating oil.

Dustin Duncan once again expressed himself by saying,

“We ensured fairness by removing the federal carbon tax on natural gas and electric heat, similar to what the federal government did for heating oil in Atlantic Canada,” said Crown Investments Corporation Minister. By extending this relief, we helped Saskatchewan families afford to heat their homes this winter.”

The removal of the carbon tax from SaskEnergy bills saved the average family about $400 in 2024. Heating accounted for ~60% of power consumption in winter for electric heat users. So SaskPower reduced the carbon tax rate on bills by 60%. This reduction lowered power bills by an average of $21 monthly for around 30,000 customers.

In January, customers still saw a federal carbon tax charge for natural gas or electricity used in December. However, bills for usage from January 1, 2024, onward showed the tax as both a charge and a reversal credit, effectively making it zero. This was a huge win for Saskatchewan, paving the way for carbon tax revocation.

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