While Canada’s inflation rate dropped from 3.4% in December to 2.9% in January, Saskatchewan had an even more notable drop, revealed data from Statistics Canada

Saskatchewan had a CPI of 2.7% in December 2023. This decreased to 1.9% in January 2024. 

“In Saskatchewan, the collection of the carbon tax levy ceased in January 2024, contributing to the province’s year-over-year price decline of natural gas (-26.6%),” said Statistics Canada in its monthly report.

Saskatchewan Premier Scott Moe commented on the decrease in his province.

“The Trudeau carbon tax was over a quarter of the cost of natural gas in SK. If the feds are actually serious about fighting inflation, they would scrap the carbon tax on everyone and everything,” said Moe.

Tiff Macklem, the Governor of the Bank of Canada, initially claimed in September that removing the carbon tax would cause a 0.15-point alleviation on inflation.

Following the claim, Dalhousie University requested an explanation.

The bank’s response revealed that the 0.15 ratio considered three components of the CPI—natural gas, heating oil, and gasoline—all of which are retail-taxed items.

By the end of October, Macklem updated the number. He said that the carbon tax would actually create a one-time drop of 0.6 percentage points, which he confirmed would have brought the inflation from 3.8% to 3.2% at the time of the statement.

Dr. Sylvain Charlebois, also known by his online X profile, The Food Professor, said that Saskatchewan ceasing collection of the carbon tax contradicts the Bank of Canada’s earlier claims that removing the carbon tax would lead to a one-time drop of 0.6 percentage points in the inflation rate.

Charlebois criticized the governor for making such a claim without data, models, or comprehensive analysis. 

“This estimate failed to account for second-round or pass-through effects across the entire supply chain of other major CPI components, indicating a narrow focus in their calculations,” said Charlebois.

Manitoba saw a similar decline following pausing its fuel tax. Manitoba’s CPI was 1.7% in December 2023, and decelerated to 0.8% in January 2024, a decrease of 0.9 points.

“Lower gas prices in Manitoba (-14.1%) contributed to the national decline, following a temporary suspension of its provincial fuel tax,” said Statistics Canada.

Following Statistics Canada releasing its monthly report, Saskatchewan renewed its call for the federal government to scrap the carbon tax.

Crown Investments Minister Dustin Duncan said this provides a clear example of what the federal government needs to do if it really wants to drive down the cost of living for Canadian families. 

“If they are actually serious about fighting inflation, the federal government needs to remove the carbon tax on everyone and everything,” said Duncan. “This shows how much impact it has, just removing it on home heating in one province. Imagine the significant impact it would have on gas prices, grocery prices, and everything else we produce and transport in Canada if the federal government scrapped the carbon tax.”

Instead, the federal government is fully committed to another carbon tax increase on April 1, said Duncan. 

“It shows they really don’t care about the impact it is having on Canadian families struggling with the cost of living.”