Federal Court agrees to stop CRA from garnisheeing Sask. account over unpaid carbon tax — for now

Saskatchewan Party candidate for Saskatoon Stonebridge-Dakota Bronwyn Eyre speaks to media at the party’s election night event in Saskatoon, Sask., Monday, Oct. 26, 2020. THE CANADIAN PRESS/Liam Richards

An injunction blocking the Canadian Revenue Agency (CRA) from garnisheeing Saskatchewan’s bank account has been successful, according to the province.

In a statement to CTV News on Monday, Saskatchewan’s Attorney General Bronwyn Eyre revealed that a federal court had ruled in favour of Saskatchewan’s emergency injunction, filed after the federal tax agency moved to collect funds owed since the province began refusing to collect and remit the carbon tax on home heating.

“The court ruled in our favour, blocking the federal government from unconstitutionally garnisheeing money, pending the full hearing and determination of the continuation of the injunction by the Federal Court,” Eyre said.

The latest move in the long running saga saw the federal government threaten to have the CRA audit the province to reclaim the lost funds.

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On July 4, Eyre announced the province would be filing the injunction to block the agency.

In her remarks, she referenced Section 126 of the Constitution Act, which does not allow the federal government to take money from a province’s bank account.

In October of 2023, the provincial government announced it would stop collecting the carbon tax on natural gas used for home heating and expanded it to electric heat in December.

The exemptions were a response to a three-year carbon tax exemption on home heating oil — primarily used in Atlantic Canada.

The Government of Saskatchewan doesn’t believe the CRA has the authority to seize funds from a province’s bank account.

A successful injunction would block any action from the CRA until the matter can be reviewed by the Tax Court of Canada, and ultimately the supreme court, if they’ll hear it.

—With files from Caitlin Brezinski and Wayne Mantyka.