Saskatchewan’s justice minister is celebrating a minor victory in her dispute with the federal tax agency over the carbon levy on home heating.
In a statement on Tuesday morning, Attorney General Bronwyn Eyre announced the Canada Revenue Agency (CRA) had agreed to accept a letter of credit for the money Saskatchewan owes since it stopped collecting carbon tax on home heating in January.
“We stopped them. The Government of Saskatchewan has been successful in preventing the federal government from its unconstitutional attempt to grab money out of Saskatchewan’s bank account,” Eyre said in the statement.
The agreement is essentially a promise to pay the money owed if the province loses its case in court.
“Saskatchewan has offered to establish a letter of credit, which is common practice for companies and other large entities and explicitly provided for under the federal carbon tax legislation,” Eyre said. “It will remain in place until our dispute is determined by the Tax Court of Canada.”
The province first announced it would stop paying the carbon tax on home heating in October, in retaliation to the federal government decision to grant a three-year exemption to the tax for those who used heating oil in their homes — primarily benefiting Atlantic Canada.
The province says the move was politically motivated and believes it’s unfair that other forms of home heating aren’t exempt.
Eyre said her arguments are framed by three points — fair application of law, no regional favouritism and minimum national standards.
When asked about the dispute in April, Prime Minister Justin Trudeau stood by the exemption on home heating oil, which is much more expensive than natural gas — the main source of heating fuel in Saskatchewan.
At the time, he wasn’t worried about the loss of revenue.
Trudeau said the CRA is “very, very good” at getting money owed and he wished the province “good luck” in dealing with it.
