Saskatchewan’s rate of inflation is the second lowest in the country, a feat the province attributes to its decision to remove the carbon tax on home heating costs at the beginning of the year.
The Consumer Price Index (CPI) rose by 1 percent between April 2024 and April 2023 in the province, the second-lowest increase among the provinces and below the national average of 2.7 percent.
“Removing the carbon tax from home heating is helping our province tackle inflation,” Deputy Premier Donna Harpauer said in a May 21 press release. “Our government will always fight for the people of Saskatchewan and stand up against policies that hurt our province.”
The province stopped collecting the carbon tax on home heating in response to Prime Minister Justin Trudeau’s decision not to exempt all forms of home heating from the tax. Mr. Trudeau paused the tax for home heating oil last fall, a move that largely benefits Atlantic Canada but does little to aid homeowners in other regions reliant on natural gas for home heating.
An increase in CPI means the price of goods and services has risen. Inflation is indicated by the growth of CPI, which helps assess changes to the cost of living.
The 1 percent CPI increase in Saskatchewan means that the value of residents’ money declines slower than in most of the country.
Premier Scott Moe took to social media May 21 to announce the province’s inflation rate, which is 0.7 percent lower than in March, when he announced it had dropped to 1.7 percent.
“Inflation continues to drop in Saskatchewan, due in part to our government’s decision to remove the Trudeau carbon tax off home heating,” he wrote. “Just think how much inflation would drop if the federal govt took the carbon tax off everything for everyone.”
Carbon Tax Battle
Mr. Moe, one of the most vocal opponents of the tax, decided last year to begin withholding the home heating carbon tax as of Jan. 1.Since then, the premier has continued to lobby the Liberal government to get rid of the tax. He was one of seven premiers to appeal to Ottawa to either pause or scrap the April 1 carbon pricing increase.
The carbon tax increased $15 on April 1, from $65 to $80 per tonne. While Mr. Trudeau has described the 23 percent pricing hike as a “logical way” to address the impacts of climate change, Mr. Moe has repeatedly said Saskatchewan residents can’t afford the continuing increases.
“The carbon tax is unaffordable, unfair, and ineffective,” the premier wrote in an April 5 letter. “The already unaffordable tax on carbon once again increased on April 1 and it is clear that Canadians have had enough. Its wide application has an effect on almost every aspect impacting the cost of living.”
The prime minister, however, said the federal government’s carbon rebate initiative benefits most people in the province.
Eight out of 10 households in federally carbon-taxed provinces earn more back in rebates than they pay in taxes, Mr. Trudeau argued at an April 23 news conference in Saskatoon, adding that low-income and middle-income families in Saskatchewan are almost always “better off” under the carbon rebate initiative.
A family of four in Saskatchewan will receive $1,800 back, “which is more than the price on the cost of pollution,” Mr. Trudeau added.
A 2023 Parliamentary Budget Officer (PBO) report has refuted Mr. Trudeau’s assertions that Canadians get more back from the rebate than they spend. The report indicated the carbon tax would result in a “net loss” of between $377 and $911 in 2024–2025 for most middle-class Canadian households even after federal rebates.
The federal carbon tax is the price placed on the carbon content of fuels to reduce CO2 emissions. It is applied across the country except in British Columbia, Quebec, and the Northwest Territories where they collect their own fuel tax.
Carbon pricing kicked off in 2019 at $20 per tonne and is set to rise $15 per tonne every year until it reaches $170 per tonne in 2030.
