Federally-imposed carbon tax takes effect in Saskatchewan

After a month of rising fuel prices in Saskatchewan, most gas stations added another four cents to a litre of regular unleaded gasoline today as the federal carbon tax took effect.

Saskatchewan does not have a carbon tax of its own design, so the federal government has imposed one in an effort to discourage the use of fossil fuels. It is scheduled to increase each year until 2022.

Jeremy Rayner, a professor at the Johnson-Shoyama School of Public Policy who tracks energy policy and its effects, said taxing pollution will change some consumers' behaviour, but that those changes will likely not be enough to allow Canada to cut emissions to the targets it agreed to in the Paris accord over the next 10 years.

"What we're doing here is taking the low-hanging fruit," said Rayner. "Saskatchewan could be doing much more."

The Saskatchewan Party government has steadfastly resisted the imposition of what it calls a 'harmful' carbon tax, and has asked the courts to rule on whether it is unconstitutional.

The province said it will not apply a six per cent provincial sales tax to the carbon levy on SaskEnergy and SaskPower bills, unlike the GST.

"This is another example of the federal government making it more difficult for Saskatchewan businesses to be competitive," Finance Minister Donna Harpauer said in a news release.

Premier Scott Moe said the carbon tax doesn't work and is an additional cost on families and on the export-based economy in Sask.

"By the federal government's own numbers, it's about a $4 billion cost to Saskatchewan residents out to the year 2022, resulting in about a 0.6 per cent reduction in emissions," Moe said.

The Sask. premier called on the federal government to declare "April Fool's" and reverse the tax.

He added the province is hopeful their constitutional challenge of the tax is successful.

Rayner said Ottawa did the right thing in ensuring all provinces play by the same rules, even if the decision is unpopular.

"They don't want to see a province being able to attract business from other provinces because they're actually evading their contribution to reducing emissions in Canada," said Rayner. 

Rayner estimated a family of four in Saskatchewan will pay roughly $400 more this year to heat a home and fuel vehicles because of carbon pricing.

At tax time, that same family should see a federal rebate of just over $600.

"You're meant to take a price signal here and do fewer things that increase your carbon footprint, to reduce it if you can," said Rayner.

He said the federal measures are largely meant to target wealthier Canadians who pollute more, but noted the tax will also affect those living paycheque to paycheque.

"If you don't have much disposable income you can't have a more efficient car, you can't insulate your house, you can't have a more efficient furnace," he said.

Tax won't lead to lower fuel consumption: GasBuddy

Dan McTeauge, senior petroleum analyst, for GasBuddy and a former Liberal MP, said consumers may be price sensitive, but the carbon tax won't lead to less fuel consumption.

"Ottawa seems bent on a particular policy which at the end of the day won't achieve the objective that they set out and it, at the end of the day, will probably frustrate a lot more people," McTeague said.

"There's a federal election coming, I guess. I'll let people decide whether it's a good sound policy or that it's something that ought to be replaced."

'Urgent' need for action says environmentalist

The Saskatchewan Environment Society (SES) has long been advocating for policy change to improve the province's efforts to reduce emissions.

According to SES board member Ann Coxworth, carbon pricing is just one of several steps that need to be taken.

"It's certainly not a tool that solves all the problems. It can't be used in isolation but is an effective tool," she said.

She points to British Columbia as a success story. The province has had carbon pricing since 2008, "and their emissions have fallen and their economy has grown," said Coxworth.

Coxworth said carbon emissions are not the only issue at hand. Methane emissions, for example, are high in Saskatchewan. It's brought up from oil wells, and often burnt off, or "just vented into the atmosphere," according to Coxworth.

"It's like in wartime when we do sometimes have to take measures that may be seen as very challenging," she said

"But because the problem is so urgent, I think we then decide if it's appropriate to take those measures."