Carbon tax hit not included in budget: minister
Government says there’s ‘flexibility’ to compensate for any expenses
Premier Scott Moe says he isn’t at all worried that the carbon tax could cut through Saskatchewan’s razor-thin surplus, on the day his finance minister confirmed the province hasn’t accounted for the expense.
Finance Minister Donna Harpauer acknowledged Thursday that the impact of the carbon tax — which could push up costs for running the province’s vehicle fleet and heating government buildings — wasn’t factored into the budget she tabled on March 20.
But she said there’s enough “flexibility” to allow for any unknowns.
“Our vehicle fleet now is relatively small, compared to what it used to be,” she said. “We no longer have our own planes. So … we have flexibility within that budget to handle changes in fuel costs.”
Some Crown corporations, including Saskpower, have pinpointed what the tax will add to their expenses, and have chosen to pass the lion’s share of the cost on to consumers.
But Harpauer was commenting on executive government ministries, which also use fuel and will pay more for it starting next month.
She said it’s still unclear whether the carbon tax will hit schools and hospitals, which make up a large part of government-owned buildings.
She said Ottawa had “foreshadowed” that it will grant exemptions to those facilities.
“The large majority of our buildings, we assume, are going to be exempt,” she said.
But the federal government countered that it has been clear that hospitals and schools, as well as universities and municipalities, will be refunded a share of carbon money to help with their energy costs.
Caroline Theriault, director of communications for Environment and Climate Change Canada, said the money on offer for Saskatchewan will be about $150 million, with details on how it will divvied up to follow in the coming weeks.
She clarified that it’s not an exemption on offer, but a rebate.
Even if carbon pricing is a wash for schools and hospitals, Harpauer wasn’t able to say whether higher costs in other areas would be enough to erase the $34.4 million surplus she’s forecasting.
“I don’t have those numbers at my fingertips, the math, but the best case scenario is we win the court case,” she said, referring to the province’s constitutional challenge against the federal carbon backstop.
Moe also zeroed in on the case when asked if he worries about the province’s bottom line. He predicted Saskatchewan would win and escape any carbon costs, at least in the long term.
“I have the utmost confidence that we’re going to be successful,” he said.
Harpauer rejected any notion that the carbon omission means the budget isn’t balanced. In her view, uncertainty over the carbon tax is no different from uncertainty over crop failures or other risks that could push up government expenses.
NDP finance critic Trent Wotherspoon is among those who’ve repeatedly challenged Harpauer’s balanced budget claims.
He was skeptical again on Thursday, calling the decision to leave out carbon pricing costs “irresponsible.”
“The fact that the government isn’t fully accounting for impacts on that front would be concerning,” he said.
“And it seems strange that we have a finance minister out here saying that they haven’t planned a budget for the current reality that we’re facing.”
“This is a government that people really can’t trust when it comes to budgetary planning.”
A carbon pricing scheme on heavy emitters has already taken effect in Saskatchewan, but the fuel levy begins on April 1. Its expected to push up gasoline prices by about 4.6 cents per litre, and will also make natural gas and diesel more expensive.
Saskatchewan argued its case at the province’s Court of Appeal last month, claiming the federal government is offending the principles of federalism by imposing a tax on the province.
But the court hasn’t come back with a ruling.
With the issue still unsettled, the carbon tax will apply in the meantime.
This is a government that people really can’t trust when it comes to budgetary planning.
TRENT WOTHERSPOON