Ottawa and Saskatchewan Reach Agreement on Repayment of Carbon Tax Funds
The federal government has announced that it has come to an agreement with Saskatchewan regarding the province’s refusal to pay carbon levy money to Ottawa. However, it is possible that the case could still end up in court.
National Revenue Minister Marie-Claude Bibeau stated on July 16 that the agreement ensures that Saskatchewan will pay 50 percent of what it owes until the dispute is resolved. She emphasized that the agreement is in accordance with the law and standard practices.
“Our government is committed to upholding the legislation that is crucial for our sustainable future and ensuring fairness to all Canadians by providing the full Canada Carbon Rebate in areas where the federal backstop system is in effect,” said Ms. Bibeau in a statement.
Saskatchewan Justice Minister Bronwyn Eyre mentioned that the province has proposed creating a letter of credit as a guarantee of payment under specific conditions. She indicated that the dispute may still be taken to the Tax Court of Canada.
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Earlier in the month, Saskatchewan filed for an injunction in Federal Court in Vancouver to prevent the Canada Revenue Agency from collecting $28 million through a bank order, which is roughly half of the $56 million that the agency claims the province owes.
A temporary stay was granted by a judge to halt the money seizure until court arguments could be heard.
Ms. Eyre hailed the temporary stay as a victory, stating, “The province’s bank account and general revenue fund are secure, and all funds remain intact due to the court’s prompt intervention.”
Earlier this year, Saskatchewan under Premier Scott Moe’s government stopped paying the carbon levy on natural gas after Prime Minister Justin Trudeau exempted home-heating oil users from the levy.
Mr. Trudeau’s decision was largely seen as benefiting individuals in Atlantic Canada, where home-heating oil is commonly used and where federal Liberals need to increase support, according to polls.
Saskatchewan argues that it is unjust for its residents to pay the levy if others in different regions are exempt. Additionally, the province claims that it is unconstitutional for Ottawa to deplete a provincial bank account.
