The Saskatchewan Ministry of Justice is suing the Canada Revenue Agency (CRA), alleging the federal agency is attempting to “seize” $28 million from provincial bank accounts.
The state government reported the news Video posted to social media On Thursday, Justice Minister Bronwyn Eyre relied heavily on political rhetoric and offered few specifics.
“now [the federal government is] Whenever someone disagrees with them, they threaten us like they always do,” Eyre said.
“They’re trying to get the Canada Revenue Agency to look into the province’s bank accounts.”
Saskatchewan Attorney General Bronwyn Eyre said Ottawa is “sending the Canada Revenue Agency after the province’s bank accounts” and her government has filed an injunction to block it. The province rejected an exemption from the home heating carbon tax after the federal government exempted home heating fuels in favor of Atlantic Canada.
A request for an injunction and judicial review has been filed in Vancouver to hold a hearing as soon as possible, Eyre said at a news conference Thursday afternoon.
The Saskatchewan Ministry of Justice has not provided a copy of the application, and the Federal Court has not yet made it available online.
escalation
The move is an escalation of a dispute between the two governments over the Greenhouse Gas Pollution Pricing Act (GGPPA), a federal law that requires states to collect a federal carbon tax.
In response to the federal government’s decision, Saskatchewan has stopped collecting and paying taxes on natural gas used for home heating. Tax exemption for home heating oil 3 years. Home heating oil is primarily used in Atlantic Canada.
Prime Minister Scott Moe Announced last year Saskatchewan Energy, the province’s natural gas utility, will stop collecting the tax starting Jan. 1, 2024.
The province later announced that Saskatchewan Power would do the same for electricity used for home heating.
About 370,000 Saskatchewan Energy residential customers use natural gas to heat their homes, accounting for 85 per cent of homes in Saskatchewan, according to the province. Thirteen per cent of households use electricity to heat their homes, according to the province.
“One of the oldest tenets of law is that the law should be applied fairly. In this case, we have seen the government carve out exceptions and exemptions for parts of the country,” Eyre said on Thursday.
‘An uphill battle’
One legal expert said the state’s request for an injunction is likely to be an “uphill battle.”
Gerald Kennedy, an assistant professor at the University of Alberta’s law faculty, said Saskatchewan would have to overcome two hurdles to suspend the CRA’s efforts.
“First, they need to show that there are serious issues that need to be heard and that the CRA does not have the authority to do this,” Kennedy said.
The law professor said this will be a tough challenge since the Supreme Court in 2021 ruled the entire GGPPA constitutional.
Kennedy added that while Saskatchewan may be able to advance arguments in a ruling that certain restrictions in the act may be unconstitutional or unreasonable, that doesn’t necessarily mean it can get an injunction.
“[Saskatchewan] “They also need to show that Saskatchewan would suffer irreparable harm if the injunction is not granted. Ordinarily, the money the CRA is trying to collect from Saskatchewan is not irreparable harm,” Kennedy said.
The state may make other claims for irreparable harm, but that’s hard to know without court documents, Kennedy said.
Saskatchewan’s auditor general has warned that the province’s decision not to collect and remit part of the federal carbon tax could result in “material errors” in the province’s future financial statements.
Canada’s Revenue Minister Marie-Claude Bibeau said in a statement that the government has no intention of backing down, despite the legal threats.
Bibeau said Saskatchewan is a registered distributor of natural gas and is obligated to “follow the law” and remit carbon taxes.
Currently, the state is not in compliance with GGPPA, she said.
“The CRA is working on this matter and is proceeding with the collections required by law,” Bibeau said.
Earlier this year, Premier Moe said the province would be subject to a CRA audit to find out how much it owes Ottawa.
“They will look at the documents we have submitted and ask us to submit the amount they estimate we are owed,” he told reporters.
“We believe there is no money owed.”
At the time, Prime Minister Justin Trudeau said the CRA had been “very good” at collecting unpaid bills and wished Moe “the best of luck” in his negotiations with the agency.
A date has not yet been set for arguments on the injunction in federal court.
