Saskatchewan, federal government negotiating resolution to carbon tax collection court challenge

Saskatchewan and the government of Canada are negotiating a potential resolution to their dispute over the federal carbon tax.

A federal court in Vancouver was scheduled to hear the first arguments in the case on Friday morning, but then the hearing was abruptly cancelled just moments before it was scheduled to begin.

An update on the court record indicates the two sides are «currently negotiating terms which could resolve the current dispute.»

If the two sides are unable to reach a solution by Monday, the hearing could be rescheduled for next week.

Saskatchewan is arguing it is unconstitutional for the Canada Revenue Agency (CRA) to garnish $28 million that it believes the province owes for failing to collect and remit part of the carbon tax — and that it's unfair for the province to be expected to pay.

The request for an injunction and judicial review was made in a federal court in Vancouver in an attempt to get a hearing as soon as possible, according to Saskatchewan Justice Minister Bronwyn Eyre.

Court documents show that despite the order from the CRA for Saskatchewan to pay $28 million, the bill has grown to at least $56 million as of the end of April.

As more time passes, that figure will continue to grow.

The court put in place a temporary injunction on the CRA seizing the money until a more fulsome hearing could be heard on the merits.

On Friday, Saskatchewan's Ministry of Justice declined to comment, saying they have nothing to add at this time

An argument about fairness

This is just the latest in an ongoing dispute between the two levels of government over the Greenhouse Gas Pollution Pricing Act (GGPPA), a federal law that requires provinces to collect the federal carbon tax.

At the start of this year, Saskatchewan