Sask. premier says removal of industrial carbon tax done after taking cue from Ottawa

WATCH: On Wednesday, Premier Scott Moe announced on social media that Saskatchewan is now a carbon tax free province.

Saskatchewan Premier Scott Moe says the provincial government took Prime Minister Mark Carney’s decision to end the federal consumer carbon tax as a cue to remove the province’s industrial based carbon tax.

Effective April 1, Moe says the industrial carbon tax rate under the Output-Based Performance Standards Program (OBPS) will be paused indefinitely, making Saskatchewan the “first carbon tax free province in the nation of Canada.”

“So, in that light and taking the cue from federal leadership candidates, Saskatchewan is taking the lead in our nation by reducing the industrial carbon tax rate charged in our province to zero,” Moe told reporters Thursday morning.

Conversative Leader Pierre Poilievre has promised to remove the industrial carbon tax if his party wins the coming election – while Carney has vowed to keep it, arguing that many of Canada’s trade relationships would be negatively impacted if the price on carbon is dropped.

In Saskatchewan, the federal fuel charge is applied for residents while a provincial system was created for industrial producers.

Moe called the industrial carbon levy the “quiet carbon tax” and one that Canadians do not always see but certainly all pay, and one that needs to be removed in light of the ongoing trade war with the U.S. and the importance creating opportunity in the country.

“So, what we are doing as a province is 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,” he said.

“Most importantly, protecting Saskatchewan families from inflationary costs due to unnecessary taxation.”

Moe says the decision will also give industries more confidence to make further investments in Saskatchewan.

“Saskatchewan is the home to some of the most sustainable products that you can find on earth,” Moe said.

“We have in our province the most sustainable oil and gas industry in the world. We have a net zero oil company operating here in Saskatchewan, which we had the opportunity to highlight many times, I’m aware of no other net zero oil company operating in North America or in the world for that matter.”

He also pointed to methane emissions in the oil and gas sector dropping about 72 per cent since 2015 as well as pollution reduction in the potash industry.

“Potash, 35 per cent of the world’s potash comes from this province and it is produced with half the emissions of our next largest competitors,” Moe added, while also mentioning a net zero copper mine currently under construction.

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During Question Period Thursday Saskatchewan NDP leader Carla Beck said it’s “fine” if the Sask. Party wants to remove its industrial carbon tax – arguing that it had been nothing but a “slush fund.” However, Beck claims the decision now creates an almost half a billion-dollar gap in the recent provincial budget.

Beck said Moe needs to publicly address the deficit that gap will now create.

She made similar comments on social media Wednesday when the announcement was first made and said the gap in the budget is $432 million.

“Now we have a Sask. Party with no plan to address the trade war, no plan to create jobs and a $432 million hole in the budget they’re asking the Legislature to vote on [on] Thursday,” Beck said in her post.

Moe said he still plans to balance the budget despite a pause on the industrial carbon levy that appears to blow a hole in the province’s finances.

He says the effect of removing the pricing system is “immaterial” to the books and will save electricity ratepayers money.

The budget shows Saskatchewan is forecasting a surplus of $12 million this year, with $431 million in industrial carbon levies contributing to revenues.

Following the announcement, Moe says they are now asking on behalf of Saskatchewan and Canadian residents that all federal leaders running in the upcoming election support the move put forward by the province.

“Remove unnecessary taxes where you can, attracting investment and creating more Canadian jobs and more Canadian opportunity in areas like Saskatchewan where we have the most sustainable fuel, food and fertilizer you can find on earth.”

Moe added that Ottawa now needs to allow other provinces to make similar decisions without federal backstop, as provinces who do not have their own industrial carbon levy have a federal program imposed on them.

“This is an opportunity that I would say federal leadership candidates have to unite Canadians further, to make life more affordable for each and every Canadian and each and every Canadian family.”

In Saskatchewan, the current industrial carbon tax is applied to the following industries, according to the province:

• Electricity generation
• Agricultural and industrial equipment manufacturing
• Chemical manufacturing
• Ethanol manufacturing
• Fertilizer manufacturing
• Food and beverage processing
• Grain and Oilseed processing
• Iron and Steel mills
• Mineral product manufacturing
• Mining
• Pulp mills
• Wood product manufacturing
• Natural gas transmission pipelines
• Refining and Upgrading of Petroleum
• Upstream oil and gas

For residents, Moe said Wednesday that the immediate affects of the decision will be seen through SaskPower bills – and in the long-term reduce the price of other consumer products that have the industrial carbon tax built into sales prices.

-With files from David Prisciak and The Canadian Press