Why is SaskPower Collecting the Carbon Tax from Us?

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There’s no doubt that the Saskatchewan government has done a brilliant job of spinning Prime Minister Justin Trudeau’s carbon tax into a monster that doesn’t just live under our beds, but is also about to burn down our houses and eat our cars. And possibly our children.

Let’s be clear from the outset — the federal carbon tax is not the right fit for Saskatchewan, and I’m not here to tell you it is. 

What I am interested in, however, are the facts, especially these days when it feels like the truth has become subjective. In my opinion, Saskatchewan people have not been given the facts, or the truth, about what they’re paying, and why.

On April 1, with both much fanfare and handwringing, the federal carbon tax was imposed upon fuel distributors in Saskatchewan. This was legislated in the federal Greenhouse Gas Pollution Pricing Act, which was enacted in June 2018.

Let’s take a step back.

At the end of 2017, the federal government warned provinces that they had until Sept. 1, 2018 to submit a carbon pricing plan, or have one imposed upon them. Believe it or not, Saskatchewan’s plan, dubbed Prairie Resilience, did include carbon pricing — but it excluded some key heavy carbon emitters, including SaskPower.

The feds said no, the Saskatchewan government doubled down, and the September 2018 deadline came and went. As a result, the feds’ “backstop” plan was announced in November 2018, and subsequently imposed on our pocketbooks.

This is where the facts haven’t really been as forthcoming from either the feds or the province. 

The federal government’s backstop plan contained two parts: Part 1, which addressed fuel distributors, and Part 2, which addressed heavy emitters such as SaskPower.

Part 1 was pretty clear — as of April 1, 2019, Saskatchewan fuel distributors, such as gas stations, would need to start charging their customers a carbon tax. SaskEnergy is considered a fuel distributor because it sells its customers natural gas directly, so it also was obligated to begin charging the carbon tax. 

SaskPower is not considered a fuel distributor, because it’s not a fuel distributor. It does emit carbon through the process of producing its product (electricity). But for fuel distributors, just like every other retail taxation program in Canada including the GST, the Canadian Revenue Agency (CRA) was deemed responsible for administering Part 1 of the plan.

Part 2 wasn’t as straightforward. All that it laid out was a set of draft regulations, which were opened for feedback and consultation — a process that continues today. What Part 2 did mandate was that as of Jan. 1, 2019, heavy emitters would need to start measuring their emissions and reporting them to the federal Ministry of Environment — but that’s it. No cost formula or price was put on those emissions, meaning no cost or price, or carbon tax, was imposed on SaskPower. The CRA is not involved, nor will it be.

So why did you, as a SaskPower customer, receive a quasi-hysterical notice in March, advising that as of April 1 SaskPower would be charging you (in big, bold red letters) a carbon tax? 

Because it — SaskPower — opted to start charging you one. It was its decision alone to start taxing customers on April 1. SaskEnergy and gas stations were obligated to do so by the CRA, but SaskPower was not. It arbitrarily chose both the rate it’s charging us and the date it began doing so. SaskPower will not be obligated to pay a penalty (it’s not a tax) on carbon emissions to the federal government until mid-2020. 

What they’ll pay, how and on what (SaskPower generates electricity using both coal and natural gas, the emissions of which will be penalized differently) won’t even be determined until later this year at the earliest.

You might buy into the spin that this was a sound business and/or financial decision for SaskPower to start charging us now, given it’ll be paying for 2019 emissions at some point in 2020, but I don’t. Because if it was that simple, SaskPower would have told us that — the truth. Using facts. 

It would have explained why it opted to suck a projected $5 million out of the wallets of Saskatchewan residents at least a year before they needed to do so. Instead, we got torqued rhetoric from the Saskatchewan government, including the minister responsible for SaskPower.

“This is a charge that is coming to your power and your energy bill,” said Dustin Duncan on April 1. “It’s not a decision of the government or the utilities here in the province. This is really a result of the federally-imposed carbon tax. Until we have a decision by the courts, we will be collecting and holding the money, and either remitting it to the federal government at a later date or rebating it back to the customers.” 

That is false on so many levels, and Duncan knows it. The decision to add a charge to your electricity bill was absolutely a decision of the provincial government and SaskPower, and it has nothing to do — at all — with the carbon tax imposed on fuel distributors.

In fact, Duncan has now admitted that the April 1 start date was chosen by SaskPower in part because its customers would just assume it was associated with the fuel tax — in other words, because it was a good date to use to trick its own customers. 

Further, SaskPower is “collecting and holding” your money somewhere, but the provincial government’s court challenge is not the reason. The truth is SaskPower has no idea what it’ll eventually be paying for its emissions, nor does it have anywhere to send the money it’s collecting from us. Oh, and I’m pretty sure SaskEnergy is not withholding funds from the CRA as Duncan implies, but a real reporter will have to ask that question.

Here’s the bottom line — you can hate the carbon tax. You can believe that it’s a bad deal for Saskatchewan, and that it does nothing to change consumer behaviour. But you can’t hate something of which you don’t have the whole truth, and this is a startling reminder that we’re living in an age where the truth is no longer absolute or guaranteed, even in Saskatchewan. 

That’s what I hate the most.