The federal fuel charge is bumping up to $65 per tonne on Saturday with the goal of reaching $170 per tonne by 2030 with yearly incremental increases.
Saskatchewan is one of the seven provinces this will effect.
On Thursday, Premier Scott Moe said they are working to determine what impacts the federal carbon pricing is having on the provincial level.
“We most certainly will work with them where it’s in the best interest of Saskatchewan people, and there’s other times where maybe we won’t work so well together,” Moe said.
He said this was a substantial cost on energy bills, noting it was being felt by families and small businesses.
Moe called the tax ridiculous, commenting that the “federal minority Liberal government that is propped up by the NDP” will not get rid of the carbon tax.
He said he suggested that the carbon tax dollars go back to the province with no strings attached so that the provincial government can do what they want with it.
“That isn’t going to happen either, and so what we’re doing now is working with the federal government on what will be likely an agreement that will have significant strings attached.”
According to the Canada Revenue Agency, some of the increases in the fuel charge rates in Saskatchewan are as follows:
- Aviation gasoline will go up to 15.92 cents from 12.44 cents per litre
- Gasoline will go up to 14.31 cents from 11.05 cents per litre
- Natural gas will go up to 12.39 cents from 9.79 cents per cubic metre
- Propane will go up to 10.06 cents from 7.74 cents per litre
An analysis by the Office of the Parliamentary Budget Officer said if one considers both the fiscal and economic impacts, a net loss is anticipated for most households.
“That said, relative to disposable income, our estimates of household net cost of the federal fuel charge continue to show a progressive impact (that is, larger net costs for higher income households). Given that the fuel charge lowers investment returns relative to wages, and that investment income makes up a larger share of total income for higher income households, their cost is proportionately larger,” the report read.
The federal government anticipates $11.8 billion in fuel charges will be collected from the seven provinces where these charges apply in 2023-24.
Mark Winfield, professor of environmental and urban change at York University in Toronto, said we got a very clear message about why this carbon tax is necessary from the Intergovernmental Panel on Climate Change (IPCC).
“(It) was very, very, clear about the scope and scale of the impacts of climate change, and the urgency of limiting temperature increases to around 1.5 degrees. At this stage we’re already at 1.1 or so,” Winfield said.
He said the carbon pricing increase is part of the overall strategy to reduce greenhouse gas (GHG) emissions.
Winfield recognized that any sort of increase in costs in an inflationary environment will create concerns.
“It’s important to keep in mind that most of the cost of the carbon price is rebated to Canadians through the tax system. So the direct long-term impact is actually very limited.”
He said this is short-term pain, but noted we should look at it in the larger context.
“The long term is not only about avoiding the consequences of climate change, but also – as we’ve seen over the last year – there are these questions about energy security and the weaponization of fossil fuels by Mr. Putin that again argues for reducing the roles of fossil fuels as an energy source.”
Winfield said carbon pricing is only one out of several tools being used by the federal government to move away from the reliance on fossil fuels.
He added that this is a long-term signal to the economy that we are moving towards decarbonization.