The majority of the discussion this week about the federal carbon tax has been concerning the exemption that was put in place for home heating oil, and the call by the government of Saskatchewan for the exemption to be applied to all forms of home heating. Premier Scott Moe took to social media Monday to state effective January 1st, 2024, SaskEnergy was being directed to no longer collect the carbon tax, and the provincial government would not be remitting the carbon tax for SaskEnergy to the federal government.
“We disagreed with the carbon tax, but because it was being applied equally across the country, we’ve always been in compliance with the requirements of the legislation,” explained Dustin Duncan, the Minister Responsible for SaskEnergy and SaskPower. However, not all residents of Saskatchewan rely on natural gas from SaskEnergy for home heating. Many, including a number of those who reside in apartments, rely on electricity for their heating. Under the announcement Monday, those residents of Saskatchewan would still need to pay the carbon tax on their home heating.
Duncan explained they had asked SaskPower to look into the situation.
“I think the short answer is there’s not an easy way, but is there a way that we can look at what proportion of people heat their homes, what proportion of their bill would be providing heat for their homes, versus the rest of their electrical needs in their homes,” clarified Duncan.
A rough estimate from SaskPower on their website as to the cost per month is that home heating, and cooling in the summer, is approximately 22 percent of the total household electricity spending. This doesn’t, however, factor in homes that have electric baseboard heating or other strictly electricity-based heating solutions.
One of the arguments put forth by the federal government as to the need for the carbon tax exemption on home heating oil is to help provide an incentive to residents to transition to heat pumps. The catch is, that heat pumps then require electricity to operate, a point highlighted by Duncan.
Home heating oil is more commonly found in homes in Atlantic Canada. Moving from heating oil to heat pumps will mean the use of coal-fired power generation plants, which is how 51 percent of the electricity in Nova Scotia is generated.
“If that’s the case, why have we been paying the carbon tax on our bills when it comes to SaskPower because we are still reliant on coal,” Duncan stated.
The province is now looking into the legal ramifications of their decision made earlier in the week. This includes ways to indemnify the board at SaskEnergy when it comes to potential consequences for failing to remit the carbon tax. At the same time, Prime Minister Justin Trudeau has stated there won’t be any further exemptions granted for the carbon tax, leaving many observers wondering who will blink first.
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