Carbon tax to have little impact on provincial budget

Saskatchewan Finance Minister Donna Harpauer speaks to the Prince Albert Chamber of Commerce on April 1, 2019. (Peter Lozinski/Daily Herald)

Costs of the federal carbon tax were not included in the budget because they should be managed as part of normal cost fluctuations, Finance Minister Donna Harpauer said Monday.

Harpauer addressed the carbon tax briefly while answering a question from Brian Martin, the executive director of Mont St. Joseph Home.

Martin expressed a concern that the carbon tax would have a large impact on the facility and asked if the province had a plan in case its court challenge fails.

The province is set to argue in court against the federal government that its carbon tax is unconstitutional.

The carbon tax came into effect Monday, imposing a partial backstop on Saskatchewan. The province’s large emitters were exempt due to separate regulations imposed by the provincial government.

But as the province declined to institute emissions limits or penalties on certain sectors, such as fuel purchase and power generation, the federal government’s backstop was applied to those sectors.

The federal government has said schools and health care facilities will be exempt but has not released details as to how that is expected to work.

“The information we have from the federal government is health care facilities and schools will be exempt. We have no idea what that looks like or how that will be rebated,” she told Martin.

She added that Mont St. Joseph should also see the exemption.

Martin wasn’t so sure.

“My only caution there is the federal government historically has not been good at recognizing special care homes as health care facilities.”

As for the rest of the provincial government’s budget, Harpauer explained to local media that the carbon tax should have little effect.

Outside of schools and hospitals, the province doesn’t have many buildings and its vehicle fleet is also relatively small. The carbon tax will impact the budget “very slightly” in the context of the $15 billion plan.

“Our budgets always have some flexibility. Fuel prices do change throughout the year,” she said.

“We don’t have a large enough fleet to have a huge impact. With buildings, it’s much the same. Within a $15-billion budget, it is within the flexibility we have within any given budget.”

She said it’s different than households, where utility bills and fuel costs are a larger percentage of budgeted expenses.

“Within government, our biggest expenses are program delivery and wages, neither of which are affected by a carbon tax.”

Harpauer also reiterated that the province will not charge PST on top of the carbon tax on SaskPower and SaskEnergy bills.