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Saskatchewan Premier Scott Moe speaks at a press conference in Regina on March 20.Heywood Yu/Canadian Press
There was a time earlier this year when Prime Minister Scott Moe's government admitted it had broken the law.
Now, that message has changed significantly.
Moe's ruling Saskatchewan Party has decided not to collect or remit the carbon tax required by Ottawa on home heating. The federal Liberals excluded household heating oil from carbon pricing to maintain votes in Atlantic Canada, but other types of fuel commonly used in other parts of Canada, namely natural gas, This was an act of protest, as similar measures were not taken against the government. Country.
It is certainly possible to challenge Saskatchewan's strategy. But there was logic to it. The Liberals have tainted the carbon pricing system with the clumsy political game of exemptions. Saskatchewan's position was, and remains, that this policy is deeply unfair.
Mr. Moe seemed prepared to weather the fallout, even getting the Canada Revenue Agency to allow politicians, rather than public servants, to be held accountable for wrongdoing. “It's unfortunate that this would be a violation of federal law,” he told The Canadian Press in December. “We recognize there may be consequences to this,” Crown Corporation Minister Dustin Duncan said in March.
But over the past few days, Moe's message has changed. He now says the government's actions may be legal and there is no money owed.
“We feel that we have a good chance of complying with the law so far,” Moe said in an interview with the Globe and Mail this week.
And what's notable is that this message changed shortly after the taxman called a few weeks ago. The Canada Revenue Agency is currently auditing Saskatchewan for not paying carbon taxes on home heating.
This new argument from the Saskatchewan government is far less consistent and will likely send the provincial and federal governments back to court. As the CRA proceeds, Mr Moe said there is a possibility that the unpopular Liberal government will be forced out of power before the audit is resolved and replaced by a Conservative government promising “tax cuts”.
“That may be one of the consequences,” the Prime Minister acknowledged. “If this federal government continues to refuse to make these changes, we will be looking for a new administration to make those changes.”
Prime Minister Justin Trudeau warned that the CRA is “very good” at collecting unpaid money. He sarcastically told Mr. Moe, “Good luck.”
In response, Saskatchewan's premier told the Globe that the province's taxes have been paid “in full.” If Mr. Trudeau “thinks differently, he's going to have to give credit to himself.”
News of Moe's shift in message passed with little fanfare, perhaps due to fatigue from the twists and turns of the fight over the Liberal Party's impasse on carbon pricing. However, the story continues unresolved.
Moe did not reveal his full legal strategy, but said the issue of carbon pricing could come back to court. He believes two key arguments on which the Supreme Court of Canada ruled in 2021 that Ottawa has the power to impose a floor price on greenhouse gas emissions across the country are crumbling.
First, even though Ottawa won by arguing that the Greenhouse Gas Pollution Pricing Act is a backstop to ensure a minimum carbon price across the country, the levy is not being applied fairly. No, Mo said.
“We have echoed the federal government's decision,” Moe said, adding that the province will “pay exactly the same amount of carbon tax that Atlantic Canadians pay on how they heat their homes.”
And second, carbon taxes are currently being collected as if they were taxes, but the Supreme Court concluded that fuel and emissions taxes are constitutionally valid regulatory costs, not taxes. .
Eric Adams, a Canadian constitutional law professor at the University of Alberta, said the province could file a new reference case based on the argument that Ottawa's administration of the Pollution Pricing Act undermines its constitutionality. However, carve-outs were always allowed.
The second argument, that the levy is not a tax, “may be too clever by half”, says Professor Adams. “There is no constitutional validity to legislation under the executive branch of the government involved.” He believes neither legal argument is likely to succeed.
In the debate over the fairness of carbon prices, Mo has a point. However, his government's position on the legal issues outlined here is far more precarious.
