Moe, Ottawa disagree on fuel rebates in carbon pricing plan

Saskatchewan Premier Scott Moe says he is "shocked" the federal government did not accept his province's carbon pricing pitch, but the federal environment ministersays instant fuel rebates do not affect emissions reductions.

Saskatchewan's proposal was sent to the federal government on May 3. It indicated the province's intention to set the carbon price on fuels from 2022 to 2030 "at a rate that matches the federal pricing schedule."

Doing so would end the federal government's carbon pricing backstop by 2022.

After the Supreme Court ruled the federal government carbon pricing plan constitutional earlier this year, Moe announced Saskatchewanwould adopt its own carbon pricing plan for consumers, which would include a rebate at the pump.

On Monday, Moe said the federal governmentdecided not to accept the province's proposed plan and would not accept another submission until 2023.

Standing outside a Saskatoon agricultural equipment supply business on Tuesday, Moe said his government was in a "state of bewilderment" afterthe rejection.

The pitch also called for the federal government to transfer $62 million from thefederal government's low-carbon economy fund to Saskatchewanmoney the province was unable to collect because it was required to sign on to the federal climate change framework.

In addition, the provincial government had requested that SaskPower and SaskEnergy be transitioned to fall under the provincial heavy-emitters regulations.

The province's proposal also included a plan for a technology fund, performance credits and a greenhouse gas offset program.

"We expected it to be accepted and we're quite shocked that it isn't," Moe said.

Better than New Brunswick offer: Moe

A major sticking point for Moe is the federal government's approval of New Brunswick's plan, whichadopteda provincial carbon price last year that includeda 6.6 cent per litre tax on gasoline. But New Brunswickalso cutthe fuel excise tax by more than four cents a litre.

"They accepted the New Brunswick model, that becomes the minimum standard as the Supreme Court ruling goes. Our offer is in excess of that offer. We understand in 2023 the federal government may want to change that standard for everybody."

But the federal government and Environment Minister Jonathan Wilkinson have indicated since the Supreme Court ruling that they're not happy with rebates at the gas pumps.

Hewarned provinces in March not to follow New Brunswick's path.

"We are certainly of the view that instant rebates are not in accord with what the whole purpose of the price of pollution is," Wilkinson said in an interview.

"If you put a price on pollution [at the pump] and then you take it off immediately, you don't have any effect on emissions."

In May, New Brunswick opted not to cut the gas tax further and instead cut personal income tax rates.

But the gas tax cut from 2020 remains in place, meaning the net carbon-tax cost to drivers in the province is 4.2 cents per litre instead of 8.8 cents.

"That is something that we wouldn't see being in accord with where the benchmark is going in 2023 and beyond," Wilkinson said.

Moe said Tuesday his government doesn't understand how Ottawaapproved New Brunswick's plan in 2019 and will not adopt Saskatchewan's similar pitch this year.

The province's ministry of justice is looking into whetherthere is any possibility of a legal challenge, Moe said.He also said the province is willing to make "a tweak or two" if Wilkinson will take another look at it.

"Disappointing that we all aren't working together on the very best decisions on behalf of Canadians and behalf of global citizens on what we can do to truly take action on climate change," Moe said, adding thefederal government should not have different standards fordifferent provinces.

Wilkinson said Monday the federal government is "updating its approach to carbon pricing to make it more fair and rigorous."

Saskatchewan, Ontarioand Alberta were the three provinces that challenged the constitutionality of the carbon tax in court.

"Given the history of our discussion with the federal government on the federally imposed carbon tax, we felt this was a very generous and credible proposal," Moe said.

"We just cannot, for the life of us, understand why they wouldn't want to move forward with Saskatchewan on this file."