Saskatchewan Premier Scott Moe stands beside Prime Minister Justin Trudeau during an announcement at Dene High School in La Loche, Sask., on Jan. 23, 2019.Kayle Neis/The Canadian Press
Andrew Leach is a professor of law and economics and co-director of the Institute for Public Economics at the University of Alberta.
Saskatchewan, in trying to defy the federal carbon tax, has come up with a bold set of legal machinations.
Bold, that is, in the way a child jumping their checker diagonally across the board in one giant leap and yelling “King me!” is bold.
The federal government should have just ignored it. But on Wednesday Ottawa confirmed it would go along with the province’s fantasy role-playing game. It’s mind-boggling.
In October, Saskatchewan Premier Scott Moe announced in a video on social media that, as of Jan. 1, SaskEnergy would “stop collecting and submitting the carbon tax on natural gas.”
The refusal to pay carbon charges is an offence under the federal carbon pricing law. But it would not have been the Premier nor the Government of Saskatchewan doing something illegal; it would have been SaskEnergy, the province’s natural gas distributor.
There is no legal requirement to collect the carbon charge on bills, but SaskEnergy has to remit 12.39 cents per cubic metre of natural gas delivered, and the first bills of 2024 will come due at the end of this month.
If SaskEnergy, like any other distributor, refused to pay those charges, every officer, director or representative involved would have been subject to fines and/or up to six months’ imprisonment.
Facing criticism that their carbon pricing protest could result in a bad outcome for the CEO of SaskEnergy, the Government of Saskatchewan found a new, clever solution in December’s SaskEnergy (Carbon Tax Fairness for Families) Amendment Act.
Saskatchewan’s new law asked Ottawa to pretend that the office of the minister responsible for public services and Crown investments, Dustin Duncan, was the distributor of natural gas in Saskatchewan.
Saskatchewan asked Ottawa to ignore both reality and federal law for one reason: so that Mr. Duncan could performatively refuse to pay any carbon charges on natural gas he hasn’t distributed so as to demonstrate his willingness to go to jail.
Yes, really. And that’s what Ottawa has agreed to do.
Ottawa, we have learned this week, will ignore the fact that the amended Saskatchewan legislation still defines SaskEnergy as the exclusive distributor of natural gas in Saskatchewan. Ottawa will also ignore the fact that SaskEnergy will continue to distribute, meter and bill customers for natural gas.
And, they will ignore their own law that defines the gas distributor not as the person who puts their hand up and nominates themselves as the distributor, but as the entity which actually delivers measures, and bills people for gas.
Ottawa’s move is mind-boggling because it’s a game they can’t win. Not only that, the federal law does not provide for what Ottawa has now agreed to do in response to Saskatchewan’s too-clever-by-half carbon charge avoidance plan
Ottawa has accepted, as provided for in the Saskatchewan law, to register the provincial Crown as the distributor of natural gas in Saskatchewan, despite the fact that the federal legislation stipulates that only entities that actually distribute and bill for gas can register.
SaskEnergy was required to be registered as a distributor of natural gas because that’s what it does. Mr. Duncan should not have been able to register because that is not what he does. It’s that simple. But Ottawa, it seems, does not care.
It doesn’t stop there. Ottawa has also agreed to cancel SaskEnergy’s registration as a gas distributor, and this too should have been impossible under the federal law.
Provincial legislation cannot redefine the terms of federal legislation, nor can it compel the federal government to ignore reality. This was the Trudeau government’s choice.
Provincial legislation also could not have required SaskEnergy to break federal law. All Ottawa had to do was follow its own laws and SaskEnergy would have remained the registered distributor of natural gas in Saskatchewan and would thus have been required to pay carbon charges on the gas it delivers. The amended SaskEnergy Act would not have been able to require the utility to ignore the requirement to pay those charges.
Instead of a winnable legal fight with a Crown corporation, Ottawa has chosen to ignore both reality and its own laws and fight directly with the Government of Saskatchewan, in a game that Mr. Moe set up. In doing so, they’ve created a fight they are almost certain to lose.