Saskatchewan vows to stop collecting Canada's carbon tax on heating

Canada's provincial premiers meet in Toronto

OTTAWA (Reuters) -The leader of the Canadian province of Saskatchewan on Monday vowed to stop collecting the federal carbon tax on homes heated with natural gas from 2024 if Ottawa does not expand an exemption announced last week for the Atlantic provinces.

On Thursday, Prime Minister Justin Trudeau said he would pause the carbon levy on heating oil for Atlantic Canada to offset the high price of the fuel that is mainly used in the Maritime provinces and help them counter cost-of-living increases.

Saskatchewan Premier Scott Moe said his province deserved the same treatment except in his province people use natural gas for heating, not oil.

"I cannot accept the federal government giving an affordability break to people in one part of Canada, but not here," Moe said in a video posted on social media platform X.

If the federal government does not extend the exemption, Saskatchewan "will stop collecting and submitting the carbon tax on natural gas" starting on Jan. 1.

Alberta Premier Danielle Smith has also complained that her province was not included in the carbon tax pause on heating. Ontario Premier Doug Ford urged the government to eliminate carbon pricing altogether.

Canada, the world's fourth-largest oil producer, is aiming to cut emissions 40-45% below 2005 levels by 2030 and a steadily rising carbon price that will hit C$170 a tonne by 2030, from C$65 a tonne currently, is a key part of their plan.

Conservative opposition leader Pierre Poilievre is holding rallies to "axe" the carbon tax, a message that has resonated amid high inflation. While an election could be two years away, Poilievre would win if one were held now, polls show.

Until last week, Trudeau had always maintained that consumers who pay the carbon tax received a full rebate and that it did not affect the cost of living. Saskatchewan and other provinces had previously challenged the legality of the carbon tax and lost in a ruling by the Supreme Court.

The climate and environment ministry had no immediate comment.

(Reporting by Steve SchererEditing by Tomasz Janowski and Sandra Maler)