REGINA - There is an old saying, “you can’t fight the tax collector”.
The Sask. Party Government is trying to prove that wrong in its ongoing fight over carbon tax money Ottawa says Saskatchewan owes.
All of this is over the Saskatchewan’s outright opposition to the carbon tax in the first place. A case it lost in the Supreme Court of Canada, when it ruled the carbon tax is indeed, constitutional.
When the Liberal Government gave people in Atlantic Canada a break on the carbon tax, Saskatchewan felt that same break should be given to everyone in the country. The federal government said it was correcting an imbalance because oil for heat is far more expensive than natural gas, and therefore people in Atlantic provinces were paying more than everyone else.
The provincial government chose to give that same break to everyone in Saskatchewan, aware of the legal ramifications that essentially Saskatchewan was breaking the law.
At the end of June, the Sask Party Government claims CRA moved to take money out of Saskatchewan’s bank account, some 27 million dollars. That’s about half of what CRA believes Saskatchewan owes in unpaid carbon tax.
Saskatchewan went to federal court for an injunction, and had the garnishment stopped, and the two sides are set to square off in Tax Court in the future.
The Sask. Party Government put out a statement saying it has agreed to “a letter of credit”, which is described only as a common tool in business and finance. It says this will stay in effect, and keep CRA at bay until the two sides have had their day in court.
The definition of a “letter of credit” says its “used as a payment mechanism or guarantee of an applicant’s payment obligations under a commercial contract up to a stated amount for an express period of time.”
The definition suggests Saskatchewan can’t spend the money, and the CRA can’t grab it until the case is heard in court, or the two sides reach some other deal. It also suggests Saskatchewan is prepared to pay, if they lose the court case.
