A move by Saskatchewan Premier Scott Moe to pause the industrial carbon levy appears to have blown a hole in the province’s finances.
Saskatchewan is forecasting a surplus of $12 million this year, with $431 million in revenue from those levies.
The Opposition NDP says without those dollars, the province would find itself in a deficit.
“This government continues to pretend that they have somehow delivered a balanced budget or a budget with a surplus,” NDP Leader Carla Beck told reporters Thursday.
“People didn’t believe it a week ago and they certainly don’t believe it today, when (the province) has just blown a half-billion dollar hole in the budget”
Moe told reporters he’s still promising a surplus.
“We have every intent on delivering that throughout the year,” he said. “We feel (the levy change) will have an immaterial effect on the budget.”
Moe announced this week that Saskatchewan is reducing industrial carbon levies to zero starting Tuesday.
The province’s industrial carbon pricing system saw electricity ratepayers and heavy emitters pay into a fund used for projects to lower emissions and keep electricity rates low.
Moe said people and businesses will see savings.
“We will have a consultation process with industry on how we would be able to exit the program,” Moe said.
“We don’t think it is in any way an environmental tax but ultimately is preventing investment and enhancing the inflationary costs we’re seeing as Canadians.”
Moe said the changes are in response to pledges from politicians during the federal election campaign.
Conservative Leader Pierre Poilievre says he would do away with the industrial carbon levy should his party form the next federal government. Liberal Leader Mark Carney, who has removed the consumer carbon price also starting Tuesday, has said he would put a burden on big polluters.
Moe said he’s asking whatever party forms the next federal government not to impose a backstop to collect levies from Saskatchewan.
Beck said while she supports scrapping the industrial carbon levy, it highlights the Saskatchewan Party government’s failure to plan. She cited issues in the budget where the province is not setting aside funds to deal with the effects of U.S. tariffs.
The Opposition is also concerned about how removing the industrial levy may affect SaskPower, the province’s electrical utility. Some of the levies are earmarked for a program that helps stabilize electricity rates and promote cleaner alternatives.
“Where are they going to make (that shortfall) up?” NDP SaskPower critic Aleana Young told reporters. “Are the people of Saskatchewan going to be experiencing double digit increases in their power bills?”
Saskatchewan stopped collecting the carbon levy on natural gas last year after Ottawa provided an exemption to home-heating oil users.
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