Sask. says $28M in carbon tax money is 'safe' after striking deal with Ottawa

Saskatchewan Justice Minister Bronwyn Eyre says the province's bank account is now «safe and sound» after coming to what she's calling «an arrangement» with the federal government in the ongoing dispute over the federal carbon tax.

«Saskatchewan has offered to establish a letter of credit, which is common practice for companies and other large entities and explicitly provided for under the federal carbon tax legislation,» she wrote in a release on Tuesday.

«It will remain in place until our dispute is determined by the Tax Court of Canada.»

A letter of credit is a financial contract that guarantees payment if the conditions of the letter are met.

It's the latest chapter in an ongoing saga that began when Saskatchewan Premier Scott Moe announced his plan to stop collecting the carbon tax on natural gas beginning in January 2024.

Moe argued that Ottawa was being unfair by offering an tax exemption to home heating oil — used primarily in the Atlantic provinces — and not natural gas.

Moe addressed the latest developments on Tuesday while in Halifax, where premiers are holding their annual summer meetings.

Moe said he looks forward to «actually having the… case heading toward the tax courts. Which is what should be happening in this case.»

The dispute between the two levels of government heated up in early July, when Saskatchewan filed a lawsuit in federal court, attempting to stop the Canada Revenue Agency (CRA) from collecting the $28 million that the CRA said Saskatchewan owed for failing to collect and remit part of the tax.

Then, this past Friday, a federal court hearing scheduled to begin hearing Saskatchewan's arguments was abruptly