Saskatchewan’s Refusal to Pay Home Heating Carbon Tax Could Play Out Many Ways Besides Jail

Prime Minister Justin Trudeau meets with Premier of Saskatchewan Scott Moe in his office on Parliament Hill in Ottawa on Nov. 12, 2019. The Canadian Press/Justin Tang

Don’t expect to see Saskatchewan’s Crown Investments Minister Dustin Duncan slapped in handcuffs and hauled off to jail by Ottawa over carbon tax non-payment, even if that’s a theoretical possibility, say experts.

There are other ways than incarceration that the political showdown could play out after Saskatchewan’s refusal to pay the carbon tax on natural gas.

“I don’t think any government wants to make a martyr of their opponent,” Ken Coates, a MacDonald Laurier Institute distinguished fellow and professor of indigenous governance at Yukon University, told The Epoch Times. “And [arrest] would certainly be a martyrdom of the highest order.”

In theory, jail is possible for Mr. Duncan, whose portfolio makes him the provincial point man in the dispute. Penalties under the Greenhouse Gas Pollution Pricing Act include fines and potential jail time.

However, Nelson Wiseman, professor emeritus in political science at the University of Toronto, shares the view that jail is not in the cards.

“I think [Premier Scott] Moe would love to have a cabinet minister charged, because then it really looks wild … these would be great headlines,” he told The Epoch Times. “But no, it’s not going to happen.”

Both see other, less dramatic possibilities in the coming weeks and months.

The Money Leverage

One of the ways Ottawa could flex its will is through financial pressure.

Mr. Coates notes that each province and territory depends on the federal government to fund a range of services from health care and academic research projects to key infrastructure such as roads and airports.

“This is just how Canada operates, where the provinces have to deliver, but the federal government has most of the money,” he said. “My guess is you’re going to see a really subtle, completely legal pushback.”

Mr. Coates said he believes Ottawa will continue with important transfers such as health care while slowing down funding on smaller requests.

“On those areas where the federal government doesn’t have to give anything to Saskatchewan–they won’t,” he said, adding that another option is for the dispute to end up in court.

Compromise

The standoff started last fall after the federal government announced it would suspend the carbon tax on home heating oil for three years, a move Premier Moe called unfair since it primarily benefited Atlantic Canada, a heavy user of oil as a heating source. When Ottawa refused to extend the break to natural gas, the province announced it would stop collecting the home heating tax.

The dispute heated up when Saskatchewan passed the SaskEnergy Amendment Act in December, making the provincial government responsible for collecting and remitting the tax rather than Crown corporation SaskEnergy, thereby shielding executives from any penalties. The move was supported by the province’s opposition NDP.

When the first payment was due at the end of February, Mr. Duncan confirmed he would not be sending a remittance to Ottawa.

Mr. Wiseman said it’s a tough political situation for the federal government.

“The feds have been very hesitant to take on provinces,” he said, noting that Ottawa usually backs down, particularly when it comes to Quebec. “Will they roll over on this? If they don’t roll over, people will say, ‘well, why is Quebec getting away with certain things?’”

In Quebec’s case, he said, the solution at times has been to negotiate separate deals, such as allowing it to have its own provincial pension plan.

Compromise is also a possibility in this dispute.

“Saskatchewan has thrown a punch in the federal face; the feds don’t want to throw that same punch at Saskatchewan,” said Mr. Wiseman. “They’d like to win some seats in Saskatchewan, too. So, the ideal thing for the feds would be somehow to bring down the temperature.”

Ultimately, however, Ottawa has the financial leverage to put a lot of pressure on Saskatchewan, he said.

Jonathan Wilkinson, the federal minister of natural resources, has already said Ottawa will withhold carbon tax rebates for Saskatchewan residents—although the details are not clear.

Mr. Moe has called that “a ridiculous and unfair response,” saying the carbon tax on home heating is only a fraction of the total carbon tax Saskatchewan residents pay.

Meanwhile, amid all the back and forth, Mr. Moe continues to do well in the polls in his province, where, like neighbouring Alberta, Western alienation is rife and residents like to see their government stand up to Ottawa. An Angus Reid poll released March 11 ranked Mr. Moe as the second most popular premier in the country, with 53 percent approval.

That’s not a surprise, according to Mr. Wiseman.

“Moe won’t lose popularity among people in Saskatchewan. And that’s essentially what has been driving his and his government’s behaviour,” he said.

‘A Long Time Coming’

Meanwhile, other provinces are watching how the saga plays out—and taking notes.

On March 8, Ontario Premier Doug Ford told reporters he could not follow Saskatchewan’s example because natural gas in Ontario is provided by private utilities, not a Crown corporation.

“We can’t do it, but good luck to my friend Scott Moe,” said Mr. Ford. “The carbon tax is the worst tax … cancel the carbon tax, put it on hold, do whatever.”

Alberta Premier Danielle Smith has made similar remarks, saying since in her province energy providers are private companies, the province can’t follow Saskatchewan’s example.

Mr. Coates argues the current dispute has been simmering in one form or another since the Liberals formed government in 2015.

“This has been a long time coming,” he said, while acknowledging the latest trigger was the Liberals’ decision to make an exception for heating oil, which in his view, was “obviously” made for political purposes.

For now, the tit-for-tat between the province and federal politicians continues.

On March 4, Environment Minister Steven Guilbeault called Saskatchewan’s defiance “immoral.” Mr. Moe responded by saying, “Apparently, it’s ‘immoral’ to give Saskatchewan families the same carbon tax break on the home heating that Trudeau gave Atlantic Canada.”