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Saskatchewan wins injunction to block CRA from collecting carbon tax

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Saskatchewan wins injunction to block CRA from collecting carbon tax
The Saskatchewan government says its application for a court injunction to stop the Canada Revenue Agency from collecting the federal carbon tax from the province has succeeded.

The Saskatchewan government says its application for a court injunction to stop the Canada Revenue Agency from collecting the federal carbon tax from the province has succeeded.

“The court ruled in our favour, blocking the federal government from unconstitutionally garnishing money, pending the full hearing and determination of the continuation of the injunction by the Federal Court,” Bronwyn Eyre, the provincial justice minister and attorney general, said Monday.

Eyre said garnishing a provincial bank account violates Section 126 of Canada’s constitution. The issue will now go for a full hearing.

The showdown between the province and the federal government has been brewing since late 2023, when Premier Scott Moe announced there would be no carbon levy on electric heating in Saskatchewan following a federal decision to exempt home heating oil from the price on carbon, a exemption Moe said primarily favours Atlantic Canada.

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Moe called the exemption unfair and politically motivated and said Saskatchewan should get a similar exemption for natural gas.

Despite the stop in Saskatchewan’s collection of the federal carbon price on natural gas, residents in the province have still been receiving carbon rebate cheques.

Eyre said the feds have threatened to remove the rebates, add fines or even lay charges against Saskatchewan executives.

In April, the Canada Revenue Agency announced it would audit the province for not paying the carbon levies.

Prime Minister Justin Trudeau said the CRA is “very, very good” at getting money owed and wished Moe “good luck” in dealing with the agency.

Trudeau has defended his decision to exempt home heating oil users, saying it’s more expensive than natural gas. He has ruled out offering exemptions to other users.

— with files from Global News Brody Langager and The Canadian Press

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