Saskatchewan government to eliminate industrial carbon tax on April 1
Opposition says decision puts $400 million hole in the province's 2025-26 budget
Premier Scott Moe's decision to pause Saskatchewan's industrial carbon tax will threaten the province's $12 million budget surplus, NDP Leader Carla Beck said.
But Moe defended the move, effective April 1, to pause the carbon tax rate under the province's Output-Based Performance Standards (OBPS) program, which taxes large industrial emitters.
"We're going to move forward and we're going to defer the requirement for carbon tax payments, so what Saskatchewan families will notice is it won't be on their SaskPower bill," Moe said on Thursday.
However, the province's 2025-26 budget had projected $431 million in revenue from its OBPS program.
With the entire program being paused, the official Opposition said there's now a gigantic hole in the province's $12 million surplus.
"They clearly have no plan when it comes to a half-a-billion dollar hole in their budget," Beck said. "They clearly have no plan for what they're going to do next."
Moe declined to provide specifics about the program, during a news conference. He said those details will be worked out as the province consults with industrial emitters on the best way to wrap up the OBPS program.
On Thursday, Moe initially said the policy change would have an "immaterial" effect on the provincial budget. He later declined to provide a "yes" or "no" answer when pressed on whether the move will affect the province's surplus.
"We're going to have those details in the days ahead as we go through the consultation with industry."
The premier said the province has repeatedly stood against the imposition of carbon pricing and pointed to how Saskatchewan joined other provinces in unsuccessfully challenging the federal regime in court.
Now, there is an opportunity to save families and businesses in the province hundreds of dollars a year, he said.
"We don't think it is in any way an environmental tax, but ultimately is preventing investment and enhancing the inflationary costs that we are experiencing as Canadians," Moe said.
The Saskatchewan NDP — which has already described the budget as a "work of fiction" — called Moe's statements "unbelievable."
"I think that not only defies the reality that we face, I think it's frankly insulting to the intelligence of people in this province," Beck said.
Taking cues from federal leaders
Moe insisted that his government was "taking our cue from the federal leaders as they start to back up on this policy."
On March 14, Prime Minister Mark Carney announced the separate consumer carbon tax will also be eliminated on April 1.
The two policy changes will make Saskatchewan the first province in Canada to fully remove any carbon tax, according to Moe.
Conservative Leader Pierre Poilievre has gone a step farther and promised to eliminate the consumer and industrial components of the federal carbon pricing scheme.
Saskatchewan's OBPS program was brought in to avoid the federal government imposing its own industrial standards on the province, also known as the federal backstop.
Moe admitted the federal government could reimpose its backstop in response to the province's policy shift.
Moe said he is publicly asking federal party leaders to allow provincial governments to regulate over industrial emitters and to not impose the federal backstop.
Environment and Climate Change Canada, the federal department responsible for co-ordinating environmental policies and programs, was not immediately available to respond to Moe's announcement.
ABOUT THE AUTHOR
