Saskatchewan stops collection of carbon tax from households that keep warm using natural gas

Facebook/ NSBA

Saskatchewan has followed through on its threat to Ottawa: exempt natural gas from the carbon tax or else. As of January 1, the province has ceased collecting the tax for ratepayers using natural gas to heat their homes.

The measure is widely considered a retaliation against Prime Minister Justin Trudeau, who only exempted home heating oil typically used by households in Atlantic Canada last fall. The federal announcement helps homes in Atlantic Canada and not Saskatchewan, according to the provincial government.

"Saskatchewan at one time relied on heating oil and there was a major program of rural gasification in the 1980s that in today’s dollars would’ve cost the province and SaskEnergy half a billion dollars. So, we made the right decision and moved to a fuel that’s cleaner burning and we have an abundance of it in Western Canada. We shouldn’t be penalized for making that decision," Minister of Crown Investments Corporation Dustin Duncan told The Evan Bray Show on December 29.

The Saskatchewan Party introduced legislation November 16 to stop collecting the carbon tax on natural gas bills after Ottawa announced no further carve-outs for home heating. 

"Our government is taking the necessary steps to protect Saskatchewan families' ability to afford to heat their homes this winter by removing the federal carbon tax from the natural gas bills of residential customers," said Duncan, the minister responsible for SaskEnergy, a Crown corporation.

It will save residents $400 a year on their power bills, he added.

The minister confirmed on January 2 that his government intends to hold out on the federal government past February, when the province is required by law to remit those dollars.

Trudeau previously told reporters he expects all provinces to follow the law, reported the Canadian Press.

Duncan acknowledged their maneuver may lead to health and social transfer deductions. "[…] we don’t know how they would pursue that," he said. Federal law stipulates that corporations who refuse to collect the carbon tax could face steep fines, with jail time probable for executives.

However, the crown investments minister said last November he would go to "carbon jail" if necessary, granting amnesty to all corporation employees in the bill. "If that’s the way this is going to be, then come after me as the minister, not somebody at the boardroom or head office at SaskEnergy," he said.

Duncan clarified their stance "is really just trying to point out to the federal government that this is unfair to the rest of the country." 

"We’re just asking for fairness," he added.

The Saskatchewan Party later asked the federal government to remove SaskEnergy as a registered distributor of natural gas in place of the province — further adding fuel to the fire.

The Canada Revenue Agency (CRA) did not confirm or deny if it already delisted the Crown corporation in a request for comment by the Canadian Press.

Ottawa has yet to respond to the planned change, confirmed Prince Albert Now.

"We’ve sent several letters to the federal government to indicate that we were making this change," said Duncan. "We haven’t heard back yet."

"The sooner we get clarity from the federal government, whether or not they will essentially acknowledge what the bill says and accept that change in registration, I think that will dictate the next steps for us to make a decision in January [to not remit]," he added.

In addition, the province will stop collecting the carbon tax on households who use electricity to keep warm. They will allocate those funds into a fund for 'net-zero' electricity projects, including a potential small modular nuclear reactor.