CRA demands $42 million in carbon taxes from Saskatchewan… or else

Saskatchewan refused carbon tax collection on home heating in a bid to secure ‘tax fairness’ with Atlantic Canada. If the full amount is not paid within 14 days, the CRA may take legal action.

CRA demands $42 million in carbon taxes from Saskatchewan… or else
The Canadian Press / Heywood Yu and The Canadian Press / Spencer Colby
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Federal Court records indicate Saskatchewan must pay the Canada Revenue Agency $42.4 million in overdue carbon taxes or risk legal action. 

“They started with the threats,” Attorney General Bronwyn Eyre said in a statement. “They are sending the Canada Revenue Agency after the province’s bank accounts.”

The CRA on June 25 issued a payment notice, reported Blacklock’s Reporter. It claims the province now owes $55,592,632 in carbon taxes plus $237,140 interest.

If the full amount is not paid within 14 days, the CRA may take legal action.

Premier Scott Moe refused to collect tax revenues on home heating earlier this year after Ottawa only exempted heating oil from the levy last October.

Prime Minister Justin Trudeau previously said the CRA is “very, very good” at getting money owed and wished the province “good luck” in dealing with the agency.

Saskatchewan, meanwhile, is seeking a court order halting any confiscation of provincial accounts pending a full hearing on the constitutionality of the CRA demand. 

Court officers said the motion would not be heard at a general court sitting tomorrow. “A special sitting is more appropriate,” said a court official.

Premier Moe called out the tax relief as politically motivated to boost Liberal support in Atlantic Canada.

Four in five Saskatchewan households use natural gas to keep warm, whereas 3% of the homesteads that use heating oil reside in the Prairies. 

"We’re just asking for fairness," Crown Investments Minister Dustin Duncan earlier told reporters.

Liberal MP Gudie Hutchings, Minister of Rural Economic Development, in an interview last October 29 with CTV Question Period said other Canadians who wanted a carbon tax break should vote Liberal. “Perhaps they need to elect more Liberals in the Prairies,” she said.

Federal Conservative Leader Pierre Poilievre toured the country in 2024 on Axe the Tax messaging, calling for a tax revolt. A Leger poll last November showed that 57% of Canadians want Ottawa to remove the carbon tax from everyone’s home heating bills.

Saskatchewan had until February 29 to submit tax revenues to the federal government but refused, breaking federal law. 

Energy Minister Jonathan Wilkinson predicted anarchy if the carbon tax strike proceeded. The province ultimately launched the strike by SaskEnergy, the province’s Crown-owned distributor of natural gas for home heating.

Saskatchewan Attorney General Eyre claimed Trudeau's cabinet was “threatening” the province again over those demands for tax fairness. 

Trudeau and Environment Minister Steven Guilbeault repeatedly warned Saskatchewan of ‘retaliatory measures’ for not collecting carbon tax revenues.

Premier Moe appeared unbothered on April 29 by the CRA audit. “We don’t believe there’s any dollars that are owed,” he said.

“On the decision by the Government of Saskatchewan to not pay its taxes to the federal government … we are a country of laws,” Trudeau told reporters. “We expect people to obey the law,” he said.

Environment Minister Steven Guilbeault forewarned decisive action against Saskatchewan for not collecting carbon tax revenues.

“If Premier Scott Moe decides he wants to start breaking … federal laws, then measures will have to be taken,” he told reporters March 5. “It’s irresponsible and it’s frankly immoral on his part.”

The carbon tax last April 1 increased 23% to 12¢ per litre of propane, 15¢ per cubic metre of natural gas, 18¢ per litre of gasoline, 20¢ per litre of aviation fuel and 25¢ per litre of heating oil. Another 23% increase is scheduled April 1, 2025.

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