Federal Court blocks CRA from collecting carbon tax from Saskatchewan

A Federal Court injunction has temporarily halted the CRA's collection of $55,592,632 in carbon taxes and $237,140 in interest from Saskatchewan, a cash grab that the province has called 'unfair' and 'unconstitutional.'

Federal Court blocks CRA from collecting carbon tax from Saskatchewan
The Canadian Press / Crystal Schick and The Canadian Press / Sean Kilpatrick
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A Federal Court injunction against the Canada Revenue Agency (CRA) has temporarily stopped their collection of carbon tax payments from Saskatchewan.

The CRA on June 25 issued a payment notice, claiming the province owes $55,592,632 in carbon taxes plus $237,140 in interest. Of that, $42.4 million is overdue from last year, according to court records.

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

The agency threatened legal action within 14 days if the outstanding balance was not paid in full.

Saskatchewan filed an emergency application July 5 to prevent the seizure of funds from provincial coffers. With the injunction, the CRA must appear before the courts to review the legality of their actions.

“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.” 

She praised the courts for granting the province an injunction.

Eyre previously described the CRA’s actions as “unfair” and “unconstitutional.”

Premier Scott Moe and his government refused to collect carbon tax revenues on home heating earlier this year after Ottawa only exempted heating oil from the levy last October. He condemned the tax reprieve as politically motivated.

Tensions escalated between Saskatchewan and Ottawa in March when Natural Resources Minister Jonathan Wilkinson suggested residents would not receive carbon rebates moving forward. 

Prime Minister Justin Trudeau backtracked on April 23, saying residents would continue to receive carbon rebates despite his “disagreement” with the provincial government.

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

“We’re going to continue to deliver the Canada carbon rebate to families right across to Saskatchewan, despite the fact that Premier Moe is not sending that money to Ottawa right now,” Trudeau said.

Minister Wilkinson foreshadowed anarchy recently if the carbon tax revenues remained uncollected.

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

“We are a country of laws,” Trudeau earlier told reporters. “We expect people to obey the law,” he said.

Guilbeault forewarned decisive action against Saskatchewan. “If Premier Scott Moe 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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