The Saskatchewan government has announced the discontinuation of carbon levy collection from residential customers using natural gas for heating, effective Monday. This decision follows Prime Minister Justin Trudeau’s exemption for home heating oil users from paying the levy, primarily benefiting residents in Atlantic Canada.
While Saskatchewan sought a broader exemption covering all heating forms, Ottawa rejected the request. In response, the province declared it would cease levy collection at the beginning of 2024. Dustin Duncan, the minister responsible for SaskEnergy, emphasized that failing to remit the levy to the federal government by the end of February could lead to legal consequences for executives, including fines or jail time.
Saskatchewan passed legislation aiming to shield executives from such consequences, placing the burden on the province. SaskEnergy has requested the federal government to remove it as a registered distributor of natural gas, urging Ottawa to list the province instead.
Trudeau emphasized compliance with the law, asserting that heating oil is considerably more expensive than natural gas. The carbon pricing system includes rebates, returning proceeds to provinces where charges are collected. Saskatchewan estimates an average saving of $400 for residents by not paying the levy.
Additionally, starting this month, Saskatchewan has ceased collecting the carbon levy from electricity users for heating. This move is not expected to face legal repercussions, as the province controls the carbon levy for its electrical utility, SaskPower. SaskPower is directed to deposit the levies into an investment fund, costing over $3 million this year.
The Saskatchewan Party government plans to utilize funds from the investment for emissions-free electricity projects, including the potential development of a small modular nuclear reactor. Carbon levies from other heavy emitters will be deposited into a separate technology fund for projects targeting emission reduction, sequestration, and capture.
In 2021, Saskatchewan unsuccessfully challenged the carbon levy in court, with the Supreme Court ruling it constitutional.