Saskatchewan files for injunction over Canada Revenue Agency collecting carbon money

REGINA — Saskatchewan is going to court to stop the Canada Revenue Agency from collecting millions of dollars in carbon levy money — but the federal government says it will stand firm because the law is the law.

Saskatchewan Justice Minister Bronwyn Eyre announced Thursday the province has filed for an injunction to stop the federal revenue service from going after the province’s bank account.

The application, filed in Federal Court in Vancouver, argues it’s unconstitutional for the agency to take from the province’s consolidated revenue fund, Eyre told reporters.

She said Ottawa wants roughly $28 million.

“This is fundamentally an unfair targeting of Saskatchewan,” Eyre said.

“One set of Canadians was given relief, and another province (is to have) its bank account raided. Is that really where we want to be at in this country?”

Earlier this year, Premier Scott Moe’s Saskatchewan Party government stopped paying the carbon levy on natural gas, after Prime Minister Justin Trudeau exempted home-heating oil users from paying.

Trudeau’s move was largely seen as helping those in Atlantic Canada, where home-heating oil is commonly used and where polls suggest the federal Liberals need to prop up popular support.

By not paying the levy, Saskatchewan is breaking federal emissions law. The province can face fines or the minister responsible for natural gas distribution can get jail time for not abiding by the rule.

The federal government responded later Thursday to the injunction application, saying it’s on firm legal ground to get the money.

“The (Canada Revenue Agency) is on the case and has pursued collections as required by law,” Minister of National Revenue Marie-Claude Bibeau said in a statement.

“We stand firm in upholding the law.”

Bibeau said Saskatchewan chose to disobey, noting the Supreme Court of Canada ruled the carbon levy is constitutional.

“Our commitment to fairness and equality for all Canadians is unwavering, as we strive to level the playing field and champion environmental responsibility nationwide,” she said.

Eyre said the province has a strong case to make, arguing the levy is no longer equally applied across Canada.

“The premise of the carbon tax was minimum national standards (and) fair application across the country,” she said.

“The (Supreme Court) decision predated any of these carve outs and exceptions.”

Trudeau has said Saskatchewan residents will continue to get carbon rebates, arguing most Canadians get more in rebates than what they pay in levies.

Some premiers and federal Conservative Opposition Leader Pierre Poilievre contend the levy makes life more unaffordable.

This report by The Canadian Press was first published July 4, 2024.

Jeremy Simes, The Canadian Press