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OTTAWA — Environment Minister Steven Guilbeault says Ottawa has to take action against Saskatchewan for breaking the federal carbon-pricing law.

Saskatchewan Premier Scott Moe said last week his province would not submit the money it owed for the carbon price on natural gas as required on Feb. 29.

Moe is protesting Ottawa's decision to exempt heating oil from the levy but not natural gas, which is used by eight in 10 households in Saskatchewan.

Under the law, fuel distributors such as SaskEnergy are to submit monthly reports on the amount of fuel sold and the carbon price collected on that fuel.

Failing to submit those reports or pay the amounts owed carries consequences, including fines based on how much wasn't paid and jail time.

Guilbeault says it is "immoral" and "irresponsible" for a premier to decide not to follow the law.

"If Premier Scott Moe decides that he wants to start breaking laws and not respecting federal laws, then measures will have to be taken," Guilbeault said in response to a question from a reporter.

"We can't let that happen. What if somebody tomorrow decides that they don’t want to respect other federal laws, criminal laws? What would happen then if a prime minister, a premier of a province, would want to do that?" he went on.

"It's irresponsible and it's frankly immoral on his part. We can have disagreements about things like climate change, but to be so reckless is unspeakable, really."

Last week, SaskEnergy Minister Dustin Duncan said he knew there might be consequences to his government's decision but it came out of a sense of fairness.

"It’s not something I take lightly," Duncan said Feb. 29.

Last fall, the federal Liberals moved to give heating oil a three-year carve-out from carbon pricing, arguing families using that product needed more time and financial aid to replace their oil furnaces with electric heat pumps.

Heating oil is about three times as expensive as natural gas, before carbon pricing, and oil prices jumped more than 50 per cent in recent years, providing a financial incentive to replace it without the addition of a carbon price.

Federal data shows 1.2 million homes in Canada still use heating oil, and almost one-quarter are in Atlantic Canada. Only three per cent of those are in the three Prairie provinces.

The Liberals were accused of making the decision based on politics, with their poll numbers on the East Coast tanking. 

The governing party has few seats in the Prairies, but a majority of seats in the Atlantic.

It could be a while before any consequences are known. 

While Saskatchewan has been very public about not making the payment, for privacy reasons, the Canada Revenue Agency will not confirm when a specific client fails to submit a payment on time — even if it is a provincial government.

The CRA does have compliance processes for seeking payment or documentation before turning to the courts.

Natural Resources Minister Jonathan Wilkinson said last week one consequence will be cutting the carbon rebates sent to Saskatchewan households. 

The rebates are based on how much money is collected in each province, and will be lowered, he said, if less money comes in.

This report by The Canadian Press was first published March 4, 2024.

The Canadian Press