Editor’s Note: This story has been updated following the announcement of the payment agreement.
The dispute between the governments of Saskatchewan and Canada around the province’s refusal to collect the federal carbon price on natural gas appears to have been settled, mere hours after Saskatchewan’s justice minister claimed the province has successfully halted the efforts of the feds.
In a statement issued to Global News Tuesday afternoon, National Revenue Minister Marie-Claude Bibeau confirmed the agreement.
“The Canada Revenue Agency and the Province of Saskatchewan have reached an agreement regarding the Province’s compliance as a registered distributor under the Greenhouse Gas Pollution Pricing Act,” said Bibeau.
“This agreement secures 50 per cent of the outstanding amounts under the Greenhouse Gas Pollution Pricing Act until the full resolution of the dispute, in line with legal requirements. Saskatchewan has committed to secure future outstanding amounts in the same agreed-upon manner.
“While some outstanding amounts remains to be paid under the GGPPA, this agreement complies with the law and aligns with the CRA’s standard practices.”
A CRA spokesperson told Global News that the agency has been in regular contact with the province since April 17 regarding collection actions and the province didn’t offer securities until July 9.
Earlier Tuesday, Saskatchewan Justice Minister and Attorney General Bronwyn Eyre had claimed victory over the federal government.
“We stopped them. The government of Saskatchewan has been successful in preventing the federal government from its unconstitutional attempt to grab money out of Saskatchewan’s bank account,” Eyre said Tuesday, prior to the announcement by the CRA indicating the province had agreed to make payments.
At the beginning of July, the provincial government announced that an injunction would be filed in an attempt to stop the Canada Revenue Agency (CRA) from taking money from the province.
Around November 2023, Premier Scott Moe announced that there would be no charge on electric heating after the feds created a temporary carbon price exemption for home heating oil, which is widely used in Atlantic Canada.
Moe called the exemption unfair and politically motivated and called for something similar in Saskatchewan 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 claimed the feds had been threatening the province by saying they’d remove rebates or add fines, or that Saskatchewan executives could face jail time.
In April it was announced that the CRA 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.
During Eyre’s announcement, she called the home heating oil exemption “regional favouritism” and said Saskatchewan’s exemption would remain in place until the federal government did “the right thing and gets rid of the carbon tax on everyone and everything.”
She said whether or not people support the carbon pricing, fair application and minimum national standards were the issues, claiming some provinces were getting exemptions while others were not.
“You can’t have regional carve-outs. … It’s demoralizing to everyone.”
Eyre said by stopping this garnishment, they were stopping the feds from “bullying Saskatchewan.”
— with files from The Canadian Press