Premier Scott Moe announced Saskatchewan will become the first carbon tax–free province in Canada starting April 1.
A move the Saskatchewan government claims will save families hundreds of dollars each year and protect businesses from rising costs and tariffs.
The province is pausing the industrial carbon tax rate under its Output-Based Performance Standards (OBPS) Program and removing the carbon tax rate rider from SaskPower bills.
The government says this will provide immediate financial relief to households, farms, and industries while addressing concerns over global trade disputes and affordability.
"Today, we are making Saskatchewan the first carbon tax free province in Canada," said Moe.
"In taking the lead on the removal of this harmful tax, we hope all federal leaders will support our position and allow the provinces to regulate in this area without imposing the federal backstop."
The decision follows Saskatchewan’s move last year to eliminate the carbon tax on home heating, which the government says saved families over $400 on SaskEnergy bills.
The province is scrapping the industrial carbon tax on electricity generation, a step Crown Investments Minister Jeremy Harrison called “critical” amid rising living costs and tariffs.
"Saskatchewan led on the removal of the carbon tax on home heating last year, saving families in our province over $400 on their household SaskEnergy bills," said Harrison.
"Now we are leading again as the first province in Canada to remove the industrial carbon tax on electricity generation, delivering further savings for Saskatchewan families, businesses, and industries on their SaskPower bills."
The announcement was praised from the Canadian Taxpayers Federation (CTF), which called the industrial carbon tax a “hidden cost” passed to consumers.
“Moe is right to cancel the hidden industrial carbon tax that increases the cost of everything and makes Saskatchewan less competitive,” said Gage Haubrich, Prairie Director of CTF.
“This move is a no-brainer to save taxpayers money and protect jobs.”
Sask NDP Leader Carla Beck criticized the Sask Party government, calling its carbon tax a “slush fund” for pet projects.
“Scott Moe gets zero credit for removing a tax he mismanaged,” said Beck, adding the province needs a “bold plan” for jobs, renewable energy, and climate action.
Beck also raised concerns about a $432 million budget shortfall linked to the tax’s removal.
Environment Minister Travis Keisig argued the tax pause allows industries to grow sustainably while producing food, fuel, and fertilizer for global markets.
"Now more than ever, the world needs our clean and sustainable food, fuel, and fertilizer,” said Keisig.
"This is not the time to risk undermining our economic growth and prosperity. Pausing the industrial carbon tax will allow industries to grow and operate sustainably while maintaining our economic competitiveness during these uncertain times."
The province says the change will protect jobs and affordability, as industrial carbon costs are paid by consumers.
The decision comes as the federal government ends its consumer carbon tax on April 1 but maintains industrial carbon pricing requirements.
Conservative Leader Pierre Poilievre has pledged to scrap such taxes if he becomes the new prime minister.
A recent Leger poll commissioned by the CTF found 70% of Canadians believe businesses pass industrial carbon tax costs to consumers.
Saskatchewan officials say they will continue consulting industries on the OBPS program’s future.
For now, Moe’s government insists the tax removal positions the province as a leader in affordability and economic competitiveness.