Bill Seeks to Drop Federal Carbon Tax in Saskatchewan, Canada

A proposed law in Canada’s Saskatchewan seeks to remove the national fuel emissions charge, or carbon tax, from natural gas bills in the province.

The Trudeau government has already paused the carbon tax for provinces and territories that apply the federal charge on fuel greenhouse gas emissions, but only for home oil heating.

The Saskatchewan bill expands the moratorium to natural gas heating effective January 1, translating to savings of CAD 400 ($291.4) for the “average” family, the provincial government said in a press release Thursday.

Dustin Duncan, minister for state-owned natural gas distributor SaskEnergy Inc., also said in a statement, "This legislation will give our government, and me as Minister, the sole authority and responsibility for decisions regarding the collection and remittance of the federal carbon tax on SaskEnergy bills while also providing protection for SaskEnergy employees and board members".

The Saskatchewan government’s media statement said, “The bill amends The SaskEnergy Act to designate the Crown as the sole registered distributor of natural gas in Saskatchewan, and invests all powers, rights, authorities, responsibilities and obligations for the purposes of Part 1 of the Greenhouse Gas Pollution Pricing Act (Canada), to the Government of Saskatchewan”.

“These authorities include providing the Minister with the sole decision-making authority to pay, or withhold payment, of any charge, tax, levy, remittance or other payment required by Part 1 of the Greenhouse Gas Pollution Pricing Act (Canada)”, the news release said.

The provincial government said the measure is in response to Ottawa’s failure to drop the carbon tax for all forms of heating, saying in the media statement the federal decision “primarily benefits families in Atlantic Canada”. Atlantic Canada consists of the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island.

Nearly 30 percent of households in Atlantic Canada use oil for home heating, compared to eight percent in the rest of the country, according to the Finance Department in a press release October 26 explaining Prime Minister Justin Trudeau’s decision to pause the carbon tax on oil heating, announced the same day. “This means Atlantic Canada accounts for almost 25 percent of all Canadian homes heated with oil, despite the region being home to only 6 percent of the total Canadian population”, the department wrote.

The Saskatchewan bill would indemnify SaskEnergy from “damages, costs, charges and expenses, including legal fees” arising from the Greenhouse Gas Pollution Pricing Act, the provincial government said.

On November 10 Saskatchewan Premier Scott Moe and four other premiers wrote to Trudeau to call for a meeting in a bid to get the carbon tax exemption extended to all forms of home heating and all administrative jurisdictions.

The premiers of Alberta, New Brunswick, Nova Scotia, Ontario and Saskatchewan said in the letter “many Canadian households do not use home heating oil and instead use all forms of heating to heat their homes”.

Warning of the coming winter the provincial heads urged Trudeau to enforce a blanket moratorium to cover all households regardless of their type of heating.

The letter added, “By singling out Atlantic Canadians with this relief, it has caused divisions across the country”.

“We urge the federal government to remove the carbon tax on all forms of home heating across Canada immediately”, read the letter shared on social media by Moe.

“Given the vast impacts of carbon pricing, we are asking for a meeting to discuss this issue”.

In announcing the carbon tax relief Trudeau’s office said a household that uses oil heating would save CAD 250 ($182.14) on average at the current federal fuel pollution charge rate. The moratorium has taken effect since late October.

Over the long term Ottawa aims to help Canadians migrate to heat pumps and phase out oil for heating, the prime minister’s office said.

Citing “global market forces and inflation”, the government in Ottawa simultaneously announced the pollution price rebate would be doubled starting April 2024 for rural households, from 10 to 20 percent of the baseline amount. “People who live in rural communities face unique realities, and this measure will help put even more money back in the pockets of families dealing with higher energy costs because they live outside a large city”, said the announcement posted on the prime minister’s website.

Through the pollution price rebate, the federal charge fuel emissions goes back to Canadians in administrative jurisdictions that enforce the federal system.

Exclusive for Atlantic residents at the pilot stage, the announcement also included an upfront payment of CAD 250 for low- to median-income households that are currently on oil heating but agree to sign up for a heat pump through a program coordinated between the federal and provincial governments.

The Oil to Heat Pump Affordability program will partner with local governments for a funding increase of CAD 10,000 ($7,285.55) to CAD 15,000 ($10,928.32), applicable to homeowners who install a heat pump. The new aid adds up to an additional CAD 5,000 ($3,642.77) in grants to match contributions at the provincial and territorial level via co-delivery arrangements. “This would make the average heat pump free for lower income households as we continue to minimize upfront costs and make federal programs even easier to access for all households”, the announcement stated.

“On average, homeowners who switch from oil to cold-climate heat pumps to heat and cool their homes save up to CAD 2,500 [$1,821.39] per year on home energy bills”.

While seeking to have legislation of its own removing the carbon tax, Saskatchewan authorities “still believe the federal government should remove the carbon tax on everything for everyone”, Duncan said.

"But until that happens, our government will ensure fairness for Saskatchewan families by taking the carbon tax off their SaskEnergy bills”.

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