Moe tells Gormley withholding carbon tax payments ‘likely not’ legal

Premier Scott Moe said Tuesday that it’s “likely not” legal to have SaskEnergy stop collecting the carbon tax and submitting it to the federal government.

Prime Minister Justin Trudeau announced a three-year exemption from the carbon tax on heating oil, which is mostly used in the Atlantic provinces. Only a small percentage of Saskatchewan homes use heating oil; most use natural gas.

In a post on social media Monday, Moe called on the federal government to expand the exemption to all home heating sources across Canada. He vowed to have SaskEnergy stop collecting the carbon tax and sending payments to the federal government if it chose to exclude Saskatchewan from affordability measures.

Moe spoke with Gormley on Tuesday morning, and acknowledged the move wouldn’t be lawful.

“That is outside the scope of the law, and we should never even be considering this,” said Moe.

However, Moe said due to the “inherent unfairness” of the decisions the federal government has made, the provincial government will also choose to carve out Saskatchewan from the carbon tax.

“The decisions are identical. One would be legal, I suppose, and one will not be,” said Moe. “We are still prepared to have that discussion in Saskatchewan, but we would hope that the federal government would come to their senses and treat all Canadian families in a fair fashion, which this decision does not.”

Moe added this decision could be possible because SaskEnergy is owned by the Crown, unlike other natural gas providers around the country.

“That’s why you are seeing other provinces who just simply don’t have the ability to compel those in the private sector to do something like this,” said Moe. “That being said, you are going to see many if not all other provinces to please be fair with all the families that they represent, be fair with the nations that they represent (and) be fair across this nation.”

Last year, SaskEnergy paid $172 million to the federal government in carbon tax payments. While Moe said the provincial government believes the carbon tax should be cut completely, the federal government’s latest decision is now being applied unfairly to all Canadian families.

Moe said there is indemnification in place if the federal government tries to take action against the provincial government or members of SaskEnergy. If the company is targeted, Moe said the provincial government will defend them.

“This is ultimately going to be a government decision and a disagreement with the policy that the federal government has in truly being unfair to Canadian families outside of Atlantic Canada,” the premier said.

Moe said an option could be that he or Dustin Duncan — the minister responsible for major Crown corporations — could take over the responsibility of greenhouse gas remittances within SaskEnergy.

This is one topic on which the Saskatchewan NDP and the Saskatchewan Party agree. Both parties were against the exemption for Atlantic Canada and supported the provincial government’s move.

“We were pleased that the NDP has not changed their stance on the carbon tax, but at least understands how unfair this carbon tax is now being to Saskatchewan families and Canadian families, (and) that they supported the amendment that we put forward in the Legislative Assembly yesterday,” said Moe.

The federal reaction

The carbon tax was the topic of a handful of questions on Parliament Hill on Tuesday, with Conservative Leader Pierre Poilievre asking about the heating oil exemption and asserting that the tax should be scrapped.

Trudeau explained why the exemption was only on home heating oil.

“Home heating oil is more expensive, more emitting, more polluting, and is in households that, on general, are lower income and don’t have the means to support it,” Trudeau said in one answer.

He then went on to talk about the federal program, in partnership with provinces, to install free heat pumps in homes, and helping to get homes off of more emitting heating like oil.

“We know the best way to support families is to have them save thousands of dollars a year on heating. That’s what they’re going to be able to do with a heat pump,” continued Trudeau.

Earlier Tuesday, Natural Resources Minister Jonathan Wilkinson told media there would be no more carve-outs from the carbon pricing, and it will remain in place for other forms of heating.

Poilievre told Gormley on Tuesday that the move makes total sense for Moe.

“He’s just asking that Saskatchewanians get the same pause in the home heating carbon tax that the prime minister has given to other people in a different region,” Poilievre said. “Why should (Moe) collect a tax for Justin Trudeau that Trudeau is not applying on other people? It makes no sense.”

— With files from 980 CJME’s Lisa Schick and Daniel Reech