Sask. files injunction in light of federal carbon tax dispute

The Government of Saskatchewan has filed an injunction in light of the federal government sending the Canada Revenue Agency (CRA) after the province’s bank account, Premier Scott Moe said on Thursday.

“It’s unfair and unconstitutional,” Moe’s post on X read.

The move comes after the province announced it would stop collecting the carbon tax on natural gas used for home heating in October, followed by a decision against collecting the carbon levy on electric heat in December 2023. Both changes came in response to the federal government instituting a three-year exemption on home heating oil, primarily used in Atlantic Canada.

In a video on Thursday, Minister of Justice and Attorney General for Saskatchewan, Bronwyn Eyre, responded to the federal government.

“The reason they're doing this is because we are providing Saskatchewan residents with the exact same carbon tax exemption as Trudeau is giving other Canadians,” she said.

“Other parts of Canada get tax relief, but we get our bank account garnished for providing that same tax relief.”

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Eyre referred to section 126 of Canada’s Constitution which does not allow the federal government to take money from a province’s bank account.

“So today, the province of Saskatchewan has filed an injunction to try and stop this unfair and unconstitutional cash grab by the Trudeau government,” Eyre said. “This is about fairness and the fair application of the law.”

An injunction is a court order to protect a person’s rights and is intended to get the other party to stop a specific act.

Since deciding against collecting carbon levy, the province has faced backlash from the federal government.

In April, Prime Minister Justin Trudeau warned that the CRA would be coming after the province.

"Good luck Premier Moe, CRA is an independent organization that is very, very good at getting money it is owed from Canadians, from businesses, and now from provinces, if it has to,” he said. 

At the same time, Trudeau said Saskatchewan residents would still receive the full amount of their carbon tax rebates. 

The province doesn’t believe the CRA has the authority to seize money from a province’s bank account. A court injunction would block that until the matter can be reviewed by the Federal Tax Court and ultimately the Supreme Court of Canada.

- With files from Wayne Mantyka