Trudeau says Sask. premier is fighting CRA on carbon tax, wishes him 'good luck with that'

Prime Minister Justin Trudeau says Saskatchewan Premier Scott Moe's decision to stop collecting and remitting carbon taxes on natural gas has put him in direct conflict with the Canada Revenue Agency (CRA).

"I don't know about you, but having an argument with CRA about not wanting to pay your taxes is not a position I want anyone to be in. Good luck with that, Premier Moe," Trudeau said in Oakville, Ont. on Wednesday. 

Moe announced in late October that SaskEnergy, the provincial natural gas utility, would stop collecting the carbon charge on natural gas starting Jan. 1, 2024. The province later said SaskPower would do the same for electricity used to heat homes.

In November, the province passed a law making it the registered distributor of natural gas in the province. On Feb. 20, the CRA agreed to a request from the Saskatchewan government to make it the distributor, rather than SaskEnergy. After that date the province said it would stop remitting the tax to the federal government. 

Moe's moves came after the federal government announced it would exempt home heating oil from the carbon tax for three years. The fuel is commonly used for home heating in Atlantic Canada. 

Moe said the move created "two classes of taxpayers" because it "effectively excludes Saskatchewan."

Trudeau repeated his position Wednesday that his government will not cut the carbon tax rebate Saskatchewan residents get from the federal government for paying those taxes.

He said that to try and claw back that money by cutting the rebates would punish Saskatchewan residents for Moe's "ideological opposition to fighting climate change and putting more money in pockets of Saskatchewan families."

"CRA is an independent organization that is very, very good at getting money it is owed from Canadians, from businesses, and now from provinces if it has to," Trudeau said.

"We don't have to do anything as a federal government. The CRA is independent and will go through its proper judicial, legal processes and I have no doubt it will get there eventually."

How carbon pricing works

The federal carbon price, or backstop, does not apply in Quebec, British Columbia and the Northwest Territories because they have their own carbon pricing systems that meet the federal standard.

In provinces using the federal backstop, the price on carbon is applied to emitting fuels through fuel charge rates that vary from fuel to fuel based on the amount of CO2-equivalent emissions they generate when burned. 

Ninety per cent of government revenues from the carbon tax are returned to households through a rebate program. The other 10 per cent is directed to programs to help businesses, schools, municipalities and other grant recipients reduce their fossil fuel consumption.

The parliamentary budget officer has consistently found that nearly all households receive more from the carbon tax rebate than they pay in direct and indirect costs. Only households in the highest income quintile are projected to pay out more than they receive — because they consume more.

Singh says carbon tax policy is 'divisive'

"What I have seen with the prime minister is really a divisive approach to fighting the climate crisis, one that should be a fight where we're all united," NDP Leader Jagmeet Singh said in Edmonton Wednesday.

Singh said that fighting climate change is important and the Liberal carbon pricing policy is forcing Canadians to choose "between affordability" and "fighting the climate crisis."

Singh promised his party will deliver a plan that makes life affordable while reducing emissions and taking on big polluters.

"My message to Justin Trudeau would be, we need a plan that's more fair for workers," he said.

During the 2021 federal election, Singh campaigned on a promise to continue with the federal carbon pricing policy. 

"Putting a price on carbon has been an important tool in efforts to drive up emissions reductions," the NDP platform said. "We will continue with carbon pricing while making it fairer and rolling back loopholes this Liberal government has given to big polluters."