Saskatchewan Premier Scott Moe says dropping the carbon tax on home heating helped Saskatchewan have the third-lowest inflation rate in the country last month.
In January’s inflation numbers, released Feb. 20, Statistics Canada said the inflation rate for Saskatchewan was 1.9 percent, well below the national average of 2.9 percent.
“The Trudeau carbon tax was over a quarter of the cost of natural gas in SK,” Mr. Moe wrote. “If the feds are actually serious about fighting inflation, they would scrap the carbon tax on everyone and everything.”
Saskatchewan stopped collecting carbon tax on home heating after the federal government paused carbon taxes on home heating oil, which is primarily used in the Atlantic provinces, but refused to extend the carve-out to other types of heating fuels. The federal government says that Saskatchewan’s pause is against the law.
According to StatCan, a variety of factors played a role in January’s numbers.
The January Consumer Price Index report points out there was an overall drop in natural gas prices of 16.4 percent across the country, along with an overall drop in gasoline prices of 4 percent.
One prominent economist said while dropping the carbon tax on home heating in Saskatchewan likely had some effect, there are other items that played a bigger role in inflation.
“It’s true, but the impact probably will be relatively small because home heating is only just part of the carbon tax impact. It also affects transportation costs and a whole bunch of other things,” Dr. Jack Mintz told the Epoch Times. Mr. Mintz is President’s Fellow at the University of Calgary School of Public Policy, and a distinguished fellow with the Macdonald-Laurier Institute.
“It'll have some impact on reducing the cost of energy, but it’s not going to be huge,” added Mr. Mintz. “Food prices and shelter costs, and transportation are the three biggest items” in inflation.
Still, Conservative Leader Pierre Poilievre pointed out that Saskatchewan and Manitoba had among the lowest inflation numbers in the country—partly as a result of reducing taxes on energy.
“Notice yesterday, the lowest inflation: Manitoba, Saskatchewan,” Mr. Poilievre told a news conference in Kingston on Feb. 21. “What did they do in Manitoba and Saskatchewan? Got rid of carbon taxes. They took the carbon tax off gas in Manitoba, they took it off heat in Saskatchewan,” he said.
Manitoba had an inflation rate in January of 0.8 percent, the lowest in the country.
The Manitoba government gave credit to the provincial gas tax holiday that started on Jan. 1.
However, the news release said it was the provincial fuel tax, not the carbon tax, that was dropped.
“According to the Consumer Price Index (CPI) from Statistics Canada, the gas tax holiday, which began on Jan. 1 and removed the 14-cent provincial tax on the price of gasoline, ‘directly contributed to a 0.4 per cent decrease to inflation,’” said the release. “Statistics Canada also noted Manitoba’s gasoline prices fell 20.2 per cent in January 2024 compared to January 2023,” it added.
Still, Saskatchewan’s premier is not the only one saying the low inflation number for Saskatchewan may be significant.
Mr. Charlebois, who is with the Agrifood Analytics Lab, added: “After the province eliminated the tax on only nat/gas, propane, and heating oil, its inflation rate fell by 0.8 percentage points in January. This is a larger decrease than the Bank’s prediction that the C-Tax would lead to a one-time drop of 0.6 percentage points in the inflation rate, over one year.”
