Sask. has stopped charging carbon tax on heating. What does this mean for your bills and rebates?

Germaine Rhomberg worries about the possibility of carbon tax rebates being scaled down after the Saskatchewan government stops collecting the tax on heating bills in the new year. 

"I'm very anxious because it's a big part of my economy. My budget is set every single month. It's a fixed income," Rhomberg, who lives in Saskatoon, said.

Saskatchewan Premier Scott Moe announced in late October that SaskEnergy, the provincial natural gas utility, won't remit the carbon charge on natural gas starting Jan. 1, 2024. The province later said SaskPower would do the same on electricity used to heat homes. 

The move came after Ottawa announced it would exempt home heating oil, which is primarily used in Atlantic Canada.

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Saskatoon resident Germaine Rhomberg describes the challenge of feeding her children as prices rise. She's worried about losing carbon tax rebates after the Saskatchewan government stops collecting the tax on heating.

In an email statement, Saskatchewan's Minister Responsible for Major Crown Corporations Dustin Duncan, whose portfolio includes SaskPower and SaskEnergy, said the removal of the federal carbon tax from SaskEnergy bills will save the average Saskatchewan family approximately $400 in 2024. 

However, it is unclear how the move will affect the carbon tax rebate cheques Canadians get from the federal government.

Rhomberg's pays her rent with disability benefits she receives due to her juvenile diabetes and mental health. She said she only has about $200 left over every month. She depends on public transit, has few electrical gadgets and has found many of her household items by dumpster-diving. 

She said the added $297.50 she gets every four months under Climate action incentive payment (CAIP) helps her immensely. 

"For what I would call frivolous things like a device for my kids, or not-second-hand shoes. So, those big lumps, four times a year, make a big difference," she said.

"My kids' birthdays kind of depend on it, because my one's birthday is in October, the other's in January."

A spokesperson for federal Finance Minister Chrystia Freeland pointed out that the carbon pricing framework was upheld by the Supreme Court of Canada.

"The price on pollution puts more money back into the pockets of the majority of Canadians. This year, a family of four in Saskatchewan is receiving $1,360 back through pollution pricing rebates. And, starting in 2024, families living in rural communities will see a 20 per cent top-up," the spokesperson said.

"Pollution pricing rebates, which are direct support to families, are contingent on a province having the federal price on pollution."

"I'm sure for the premier of our province $300 lost four times a year is not a big deal," Rhomberg said. "But it is a significant portion of my economy."

How does the carbon pricing system work? Who was benefiting the most?

Brett Dolter, an assistant professor of economics at the University of Regina, said lower income people are likely to be most affected if the rebate cheques stop.

Dolter said having a smaller house means burning less natural gas. Having a lower income can also mean fewer electrical gadgets and more reliance on public transit, which translates to less overall carbon tax being paid.

"With all that money the federal government has collected, it is given back in the form of these rebate cheques. In my research, I found that most households would get more money back than they pay in carbon pricing," he said.

"That's especially true of low-income households. They don't pollute as much as high-income households, but everybody gets the same per capita per person rebate."

A distributional analysis of federal carbon pricing by the Parliamentary Budget Officer found "the largest net gain is in the lowest income quintile in Saskatchewan."

Dolter called the province's move to stop collecting the tax "regressive," and said it would mean lower CAIP payments.

"A lot of households in Saskatchewan will actually be worse off because those rebates are going to be lower."

How different will my utility bill look?

The province said there are approximately 370,000 residential SaskEnergy customers, comprising 85 per cent of homes in Saskatchewan that are heated by natural gas. A further 13 per cent of households heat their homes using electricity. 

"Approximately 98 per cent of Saskatchewan families will benefit from the removal of the carbon tax from SaskEnergy bills and the home heating portion of SaskPower bills," the statement said.

The province confirmed Thursday that SaskEnergy customers would not be billed for carbon tax on any natural gas used for heating after Jan. 1. 

Last year, SaskEnergy remitted $172 million in carbon tax to the federal government.

For SaskPower customers who heat their homes with electricity, the province said heating accounts for up to 60 per cent of their bills, and therefore they will not pay the tax on 60 per cent of their power bill. That reduction will last until Apr. 30.

Saskatoon Morning9:09How will SaskEnergy and SaskPower removing the federal carbon tax from home heating affect you?

There’s a big change coming to your heating bill this new year. SaskEnergy, the provincial natural gas utility, and SaskPower, the province's electrical utility, are removing the federal carbon tax from home heating. These changes come in response to Ottawa's decision to exempt heating oil — primarily used in Atlantic Canada — from the carbon tax for three years. Host Candice Lipski talks with the CBC’s Pratyush Dayal, who has been looking more closely into this and what this might mean for most of us.

In an email statement, Saskatoon Light and Power said it will provide "an equivalent relief" for its customers that will be reimbursed by SaskPower to offset the cost.

"The rebate will be cost neutral for SL&P and will therefore flow through the utility," the statement said.

What about the environment?

Putting a price on carbon incentivizes people to find ways to reduce their emissions and is the "best tool to deal with climate change and get emissions to zero," Dolter said.

Bob Halliday, vice president of the non-profit Saskatchewan Environmental Society, said both the federal and provincial governments are complicating what could be a relatively straightforward way of addressing climate change and reducing greenhouse gas emissions.

Halliday said the province is demonstrating that the environment is not a high priority. He said the proposed changes will make people less likely to do things like put better insulation in their houses or install energy-efficient windows.

"The Saskatchewan government's approach to climate change action is to do what the feds insist they do and do very little else besides," he said.

What is the legality of the proposed changes?

Dolter said the Supreme Court has already ruled that the federal government has the jurisdiction and the constitutional right to put a price on pollution. 

"Now we see the Saskatchewan government trying to test that, and there would probably be a legal challenge involved to declare whether that is legal or not based on the Supreme Court ruling," he said.

Federal law says corporations that fail to remit the carbon tax could face steep fines, and executives could also get jail time.

But Duncan has previously said he's willing to go to "carbon jail" for not remitting the tax. And the province's legislation provides legal protection for those at its energy Crown corporation.

Martin Olszynski, a lawyer and associate professor at the University of Calgary in the faculty of law, said how a potential conflict plays out will depend on how the federal government reacts. 

He said Ottawa can seek a declaration in its favour in advance, or wait and seek enforcement after a violation of the Greenhouse Gas Pollution Pricing Act.

Olszynski said all of that enforcement machinery is conducted by the Public Prosecution Service of Canada, which is independent from the political arm of government.

"The basic constitutional reality that Premier Scott Moe can't seem to accept is that provincial legislatures have no ability to amend the text, or otherwise alter the operation of, federal laws, and any such attempts are either void or inoperable to the extent of such conflict," Olszynski said.

You can use CBC's carbon tax calculator to see an estimate of what the net effect of the tax was on your household previously. Note that now, with Saskatchewan no longer collecting the tax on heating and the effect on rebates still unknown, the totals for Saskatchewan residents will be unclear going forward: