Saskatchewan's move to no longer remit the federal carbon levy on natural gas turned into a tit-for-tat of threats Thursday, with Ottawa saying the province's residents will no longer be getting rebates.
Premier Scott Moe shot back by saying Saskatchewan should stop sending Ottawa the levy on everything else.
"If the (federal) government follows through on this threat, they will once again be penalizing Saskatchewan families for wanting to be treated the same as other Canadians," Moe wrote on the social media platform X, formerly known as Twitter.
Moe said while the province's natural gas utility, SaskEnergy, has stopped remitting the federal charge, residents are still paying it on gasoline, diesel, propane and other goods.
"If Saskatchewan people stop getting the rebate entirely, Saskatchewan should stop paying the carbon tax entirely," said Moe.
Moe had announced SaskEnergy would stop collecting the carbon price from customers in January, and the province had until Thursday to remit those dollars.
SaskEnergy is breaking federal emissions law by choosing not to remit the levy, which could result in fines or jail time for executives. The Saskatchewan government has passed legislation that aims to shield executives from legal consequences, putting that burden on the province.
Federal Natural Resources Minister Jonathan Wilkinson said Saskatchewan's move is reckless, as the law to impose a carbon levy was upheld by the Supreme Court of Canada.
“(It’s) irresponsible and almost unheard of in the history of this country,” he said in Ottawa.
“Premiers, just like prime ministers, are responsible for passing laws and they expect their citizens to abide by those laws. If you do not have that expectation, you have anarchy.”
People in Saskatchewan will no longer get a carbon rebate, he said, because it's difficult to provide rebates when no money is being collected.
"They will no longer get the rebate,” Wilkinson said.
“The rebate actually provides more money for most families in Saskatchewan.”
A spokeswoman for Wilkinson later told The Canadian Press the impact on the rebates sent to Saskatchewan is dependent on what money Saskatchewan actually remits to the federal government.
Federal Justice Minister Arif Virani said his job is to uphold the laws of the country.
“I'm not going to engage in hypotheticals about what (Saskatchewan)may or may not do in the future. When they actually take a step like that, we will deal with it accordingly,” he said.
Dustin Duncan, the minister responsible for SaskEnergy, said the provincial government recognizes there may be consequences.
Duncan told reporters in Ottawa the province decided not to remit out of fairness, pointing to a decision Prime Minister Justin Trudeau made when Ottawa exempted home heating oil from the carbon charge, a move that largely benefits Atlantic Canadians.
Trudeau has not done the same for natural gas, used to warm homes on much of the Prairies.
"It's not something I take lightly," Duncan said of his decision.
He said the federal government could still offer a rebate but at a smaller amount, as residents are still paying the levy on the other goods.
"That's the federal government's decision," Duncan said.
"Our view is that if the prime minister thought that a reduction in the carbon tax and a reduction in the rebate for Atlantic Canadians meant that would be a net positive in terms of affordability for those residents, surely the economics should hold true for Saskatchewan."
Moe said Atlantic Canadians are still getting rebates even though those who use home heating oil aren't paying the levies.
Trudeau said Thursday the three-year exemption is meant to help those who use home-heating oil to upgrade to heat pumps, which pollute less.
He added some of the lowest-income Canadians use heating oil.
"Yes, proportionately there's a lot in Atlantic Canada, but they're right across the country," he said.
"This isn't a program for one part of the country versus others."
Duncan said the Canada Revenue Agency has removed SaskEnergy as a registered distributor of natural gas. He said he believes this move ensures he or the province are liable for penalties, not SaskEnergy.
"I think that if those applications had not been successful, then we likely would have been looking at making some sort of payment (to Ottawa)," he said.
The Canada Revenue Agency did not immediately respond when asked about the designation.
Duncan said the average household in Saskatchewan is expected to save about $400 this year as a result of the province no longer collecting the charge on carbon.
He added there is a report from the parliamentary budget officer that says Saskatchewan residents are to pay $600 more in levies.
Wilkinson said the rebate for a family of four in Saskatchewan is $1,500 and for those in rural communities it's $1,800.
This report by The Canadian Press was first published on Feb. 29, 2024.
— With files from Mickey Djuric, Mia Rabson and Stephanie Taylor in Ottawa
Jeremy Simes, The Canadian Press
Note to readers: This is a corrected story. A previous version said a spokesman for Natural Resources Minister Jonathan Wilkinson provided comment to The Canadian Press. In fact, it was a spokeswoman for the minister.
