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Sask. and federal government dispute around carbon pricing to be settled by tax court

The dispute between the governments of Saskatchewan and Canada around the province’s refusal to collect the federal carbon price on natural gas continues, but Saskatchewan’s justice minister claims the province has stopped the feds and that the matter will be resolved in court.

“We stopped them. The government of Saskatchewan has been successful in preventing the federal government from its unconstitutional attempt to grab money out of Saskatchewan’s bank account,” Justice Minister and Attorney General Bronwyn Eyre said Tuesday.

Click to play video: 'Saskatchewan wins injunction to block CRA from collecting carbon tax'

Saskatchewan wins injunction to block CRA from collecting carbon tax

At the beginning of July, the provincial government announced that an injunction would be filed in an attempt to stop the Canada Revenue Agency (CRA) from taking money from the province.

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Around November 2023, Premier Scott Moe announced that there would be no charge on electric heating after the feds created a temporary carbon price exemption for home heating oil, which is widely used in Atlantic Canada.

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Moe called the exemption unfair and politically motivated and called for something similar in Saskatchewan for natural gas.

Despite the stop in Saskatchewan’s collection of the federal carbon price on natural gas, residents in the province have still been receiving carbon rebate cheques.

Eyre claimed the feds have been threatening the province by saying they’d remove rebates or add fines, or that Saskatchewan executives could face jail time.

In April it was announced that the CRA would audit the province for not paying the carbon levies.

Click to play video: 'Hearing cancelled for Saskatchewan’s bid to stop federal collection of carbon money'

Hearing cancelled for Saskatchewan’s bid to stop federal collection of carbon money

Prime Minister Justin Trudeau said the CRA is “very, very good” at getting money owed and wished Moe “good luck” in dealing with the agency.

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Trudeau has defended his decision to exempt home-heating oil users, saying it’s more expensive than natural gas. He has ruled out offering exemptions to other users.

Eyre claimed the province offered alternatives from garnisheeing funds to the CRA back in June and that now a letter of credit is being established.

This letter of credit will remain in place until the dispute between the two governments gets resolved by the Tax Court of Canada.

Eyre pointed to the home heating oil exemption, calling it regional favouritism, and said Saskatchewan’s exemption will remain in place until the federal government does “the right thing and gets rid of the carbon tax on everyone and everything.”

— with files from The Canadian Press

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