REGINA - Saskatchewan will become a carbon tax free province on April 1, but how that move will impact the province’s finances remains to be seen.
Premier Scott Moe confirmed the news that was leaked out on social media the previous day: that the province’s industrial carbon tax will be removed.
Moe justified the move by again pointing to the commitments by the major parties remove the carbon tax. He also pointed at the pressures the province was facing from the tariff threat from the USA and China, among others.
“What we're doing as a province is we're taking very decisive steps to ensure that our industries in Saskatchewan are more competitive and to protect the jobs today in those industries and protect the jobs that we want to attract in those industries into the future.”
But how removing the “hidden” industrial carbon tax will impact the Saskatchewan provincial budget and its $12 million surplus was a major question.
When asked why this was not included in the budget Moe said what they were doing was “deferring the OBPS program,” or output based pricing system on emitters.
That raised questions from reporters who pointed to the line item for OBPS under electricity sector revenues in the budget at $346.6 million. But Moe insisted at the news conference that the budget impact would be minimal.
“We feel it has an immaterial effect on the budget but we will have a consultation process with industry on how we would be able to exit that program. We have always stood from day one against this tax.”
He said it ultimately was “preventing in many ways investment and enhancing the inflationary costs that we are experiencing as Canadians.”
“We have always been against it and looking for ways including taking it to the Supreme Court of Canada supported by eight other provinces and one opposition party in our effort there. What we are doing here today is really taking our cue from federal leaders as we find ourselves in a national election campaign. You have seen the two main parties. Both federal leaders have came out and made decisions with respect to reducing the consumer carbon tax and one party, the Conservative party, has went further and said that they would also reduce the OBPS tax. Taking that cue, what we are asking all leaders to do is to be clear on what they would do with the OBPS tax and ask them to put that in the provincial scope of regulations.”
As for how the money would be made up, Moe reiterated “I wouldn't assume that there is money that needs to be made up. What I would say is that this is a deferral and we will consult with the industry on how we exit the program.”
As for how removing the industrial carbon tax will impact Saskatchewan residents, Moe pointed to it bringing down power bills, the gas price, and grocery prices.
Minister for SaskPower Jeremy Harrison also spoke about the impact for SaskPower customers who are not going to be paying that carbon tax portion that had been on their SaskPower bills.
“This has a real impact. We are talking hundreds of dollars per year depending on power use for either households or for companies,” said Harrison. He particularly pointed to the impact on Evraz, which is facing a 25 per cent tariff on steel.
“This is going to save that company for example millions of dollars per year in compliance payments which is going to put them in a position to continue employing the hundreds of people in Regina and the thousands that are in that associated industry.”
Meanwhile the opposition New Democrats had a mixed reaction to the news. On one hand, they welcomed the removal of the provincial industrial carbon tax, claiming the revenues were going to a “slush fund” for Sask Party projects.
But the NDP said the move would blow a hole of $432 million in lost OBPS annual revenue in the 2025-26 budget. The NDP pointed to that number when their MLAs stood and voted against the budget when it came up in the Assembly Thursday.
“This government continues to pretend, let's call it as it is, pretend that they have delivered somehow a balanced budget or a budget with a surplus,” said Opposition Leader Carla Beck prior to the budget vote.
“No one believes that. People didn't believe it a week ago when the government made that claim, and they certainly don't believe it today when they've just blown a half a billion dollar hole in that budget. We think it should be scrapped. We think the government should go back and deliver a real, credible plan to the people of this province, and we'll continue to call on that today.”
