Federal Carbon Tax

The Issue

The SCC has strongly advocated against a carbon tax being imposed on Saskatchewan businesses. Nevertheless, the Government of Canada has imposed the economy-wide, fuel charge portion of the carbon tax effective April 1, 2019. The Federal Government’s imposition of a tax on activities associated with GHG emissions will impact Saskatchewan businesses both directly and indirectly. Small and medium-sized businesses being saddled with additional costs under the federal carbon pricing regime often do not have the financial resources to make investments in energy efficiency programming.

According to a Backgrounder from the Department of Finance Canada, 90% of the revenue generated by the carbon tax in Saskatchewan will be directed back to households through the Climate Action Incentive rebate. Of the remaining 10% of revenue, 4% will be directed back to the MUSH sector – municipalities, universities, schools, and hospital, while 6% will be directed back to eligible small and medium-sized enterprises (SMEs) in the province. Over a five-year period from 2019 – 2024, the Federal Department of Finance estimates that a total of $295 million will be available to eligible Saskatchewan SMEs.

Our Position

The SCC believes that investments in energy efficiency, not taxation, is one of the most effective ways to reduce GHG emissions. Unlike a carbon tax, energy efficiency programming enhances competitiveness by reducing a business’s energy-related costs. Nonetheless, promoting energy efficiency requires both education and a significant amount of capital investment before it can be put in to place by SMEs, the government needs to help these operations transition now before driving them out of business with a tax first mentality.

Recommendations

While the SCC will continue to oppose the federal carbon tax, we also believe that any revenues generated from a carbon tax should be directed back into programs and actions that will demonstrably reduce GHG emissions. The SCC does not want to see the rebate approach currently being proposed for households as a model for directing revenues back to eligible Saskatchewan SMEs. Such an approach would do little to reduce GHG emissions. Instead, we advocate for a streamlined, science-based, and transparent program designed to support energy efficiency improvements.

Saskatchewan Chamber of Commerce Logo Greyscale

Keeping up with what’s happening in Saskatchewan has never been easier. Sign up for our Advocacy Update Newsletter now!