Saskenergy off hook in carbon tiff
Crown delisted, government listed as province's natural gas distributor
Saskatchewan's defiance of federal carbon pricing can continue, after approval to change the province's natural gas distributor was given this week by federal officials.
Saskenergy has confirmed that Canada Revenue Agency (CRA) has approved delisting the Crown corporation as the distributor of natural gas in Saskatchewan. The provincial government has been allowed to register in its place, a spokesperson said on Wednesday.
The changes were submitted to federal Minister of Natural Revenues Marie-claude Bibeau for approval, after Saskatchewan in December passed Bill 151, amending the Saskenergy Act.
Those amendments instruct the Government of Saskatchewan be named the “sole registered distributor of marketable (and) non-marketable natural gas” in place of Saskenergy as of Jan. 1, 2024.
The bill was presented as enabling legislation ahead of Saskatchewan stopping collection of the carbon levy on residential home heating as of Jan. 1.
Minister of Crown Investments Dustin Duncan said the intention of both the bill and registration change was to clarify that “any potential consequences” for coming carbon tax refusals “would be borne by government.”
Saskenergy's carbon tax payment for January comes due next week, and questions remain as to whether the provincial government intends to pay.
The Crown corporation declined to say whether it would be remitting payment.
“Decisions regarding whether to remit residential carbon tax charges for the month of January will be made in advance of the end of February,” the Crown said in an emailed response.
Saskenergy said the change in registration meets the relevant section of the federal Greenhouse Gas Pollution Pricing Act.
The act defines a distributor as one who produces, imports, delivers or measures consumption of natural gas for the purposes of billing.
Asked how the Government of Saskatchewan meets those qualifications, Saskenergy directed the Leader-post to CRA, as did Bibeau's office.
CRA did not immediately comment.
A request Wednesday to speak with Duncan was not immediately granted.
Earlier this week, Duncan said that stopping collection of the carbon tax has “helped reduce” Saskatchewan's inflation rate already in January.
New data from Statistics Canada show the province's average consumer price index dropped to 1.9 per cent in January, down from 2.7 per cent in December.
“If they are actually serious about fighting inflation, the federal government needs to remove the carbon tax on everyone and everything,” Duncan said in a statement this week. “This shows how much impact it has, just removing it on home heating in one province.”
University of Regina assistant professor of economics Brett Dolter said this is some “halfmath” on the provincial government's part.
“It's a highly misleading statement, to say proudly that the inflation rate is lower,” he said.
He called January's decrease likely a “one-time” occurrence, adding “if we want it to stay at less than two per cent, you'd have to cut some other tax every month.”
Although reducing costs on home heating might have lowered bills in the short-term, Dolter said whatever gains made in the first month of the year will be felt later on.
Saskatchewan is still on the hook to make its carbon pricing payments.
“That money has to come from somewhere,” he said.
Saskpower is doing so from its bottom line. Duncan has floated that Saskenergy may do the same, or pull from the provincial general reserve fund.
“The full sentence should read: we've lowered inflation and increased the deficit, or increased your taxes or decreased your disposable income (from rebates),” Dolter said.
“If you can't submit carbon pricing revenue from natural gas burning, then you're going to have $100 million extra on the deficit or $100 million on other taxes.”
The average four-person household qualifies for at least $376 in carbon rebates in 2024, with the first quarterly payout to arrive April 15.
Experts, including Dolter, agree that figure could shrink should Saskatchewan withhold its remittance, as rebates are calculated on April 1.
Saskenergy remitted $172 million in carbon charges in 2022 and $125 million in 2023-24 up to this January.
A total of $577.8 million has been paid since the carbon-pricing act came into effect in 2019.
Saskpower remitted $248 million in 2022, which remains in-province in a fund for clean energy development, and forecasts $262.6 million in 2024.
It's a highly misleading statement, to say proudly that the inflation rate is lower.