RoydadNaft –  Canada’s Saskatchewan province has removed the national fuel emissions charge, or carbon tax, from state-provided electric and natural gas heating, in a relief for families during the winter.

The Trudeau government has already paused the pollution tax for provinces and territories that apply the federal charge on fuel greenhouse gas emissions, but only for home oil heating.

Saskatchewan has now expanded the moratorium to heating systems running on electricity or natural gas effective January 1, with expected savings of CAD 400 ($300.2) for the “average” family in 2024, the provincial government said in a press release.

Dustin Duncan, the minister overseeing state-owned natural gas distributor SaskEnergy Inc., said in a statement, “Our government is ensuring fairness for Saskatchewan families by removing the federal carbon tax on natural gas and electric heat, just as the federal government has done for families in Atlantic Canada by removing the carbon tax on heating oil”.

The provincial government statement explained, “Heating accounts for up to 60 percent of power consumption during the winter months for customers who rely on electric heat, so SaskPower will eliminate the carbon tax on that heating by reducing the federal carbon tax rate rider on their bills by 60 percent”.

“This will benefit approximately 30,000 SaskPower customers, reducing their power bills by an average of CAD 21 ($15.76) per month through the winter”, the statement added.

Though SaskEnergy customers will still see a federal carbon charge on their January bills for electricity or natural gas used for heating in the month to December, bills for the succeeding month will deduct the tax as a reversal credit, the provincial government said.

The provincial government had said the tax relief, proposed last November, was in response to Ottawa’s failure to drop the carbon tax for all forms of heating, saying in an earlier media statement the federal decision “primarily benefits families in Atlantic Canada”. Atlantic Canada consists of the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia and Prince Edward Island.

Nearly 30 percent of households in Atlantic Canada use oil for home heating, compared to eight percent in the rest of the country, according to the Finance Department in a press release October explaining Prime Minister Justin Trudeau’s decision to pause the carbon tax on oil heating. “This means Atlantic Canada accounts for almost 25 percent of all Canadian homes heated with oil, despite the region being home to only 6 percent of the total Canadian population”, the department wrote.

On November 10 Saskatchewan Premier Scott Moe and four other premiers wrote to Trudeau to call for a meeting in a bid to get the carbon tax exemption extended to all forms of home heating and all administrative jurisdictions.

The premiers of Alberta, New Brunswick, Nova Scotia, Ontario and Saskatchewan said in the letter “many Canadian households do not use home heating oil and instead use all forms of heating to heat their homes”.

Warning of the coming winter the provincial heads urged Trudeau to enforce a blanket moratorium to cover all households regardless of their type of heating.

“By singling out Atlantic Canadians with this relief, it has caused divisions across the country”, read the letter shared on social media platform X, formerly Twitter, by Moe.

Oil Heating Phase-Out

In announcing the carbon tax relief Trudeau’s office said a household that uses oil heating would save CAD 250 ($187.63) on average at the current federal fuel pollution charge rate. The moratorium has taken effect since late October.

Over the long term Ottawa aims to help Canadians migrate to heat pumps and phase out oil for heating, the prime minister’s office said then.

Increase in Carbon Tax Rebate

Citing “global market forces and inflation”, the government in Ottawa simultaneously announced October the pollution price rebate would be doubled starting April 2024 for rural households, from 10 to 20 percent of the baseline amount. “People who live in rural communities face unique realities, and this measure will help put even more money back in the pockets of families dealing with higher energy costs because they live outside a large city”, said the announcement posted on the prime minister’s website.

Through the pollution price rebate, the federal charge for fuel emissions goes back to Canadians in administrative jurisdictions that enforce the federal carbon tax.

Exclusive for Atlantic residents at the pilot stage, the announcement also included an upfront payment of CAD 250 for low- to median-income households that are currently on oil heating but agree to sign up for a heat pump through a program coordinated between the federal and provincial governments.

The Oil to Heat Pump Affordability program will partner with local governments for a funding increase of CAD 10,000 ($7,505.05) to CAD 15,000 ($11,257.57), applicable to homeowners who install a heat pump. The new aid adds up to an additional CAD 5,000 ($3,752.53) in grants to match contributions at the provincial and territorial level via co-delivery arrangements. “This would make the average heat pump free for lower income households as we continue to minimize upfront costs and make federal programs even easier to access for all households”, the announcement stated.

“On average, homeowners who switch from oil to cold-climate heat pumps to heat and cool their homes save up to CAD 2,500 [$1,876.26] per year on home energy bills”.