Saskatchewan Premier Scott Moe says the province is to stop collecting the federal carbon levy on electric heat starting Jan. 1. 

Moe told reporters Thursday that many people in northern Saskatchewan use electricity to heat their homes and they should be exempt from paying the price. 

He said the province would figure out who heats their homes with electricity then estimate a percentage to be taken off their bills.

"There's going to be a little bit of work to do here and some details to work out," he said. 

Moe announced in late October that SaskEnergy, the provincial natural gas utility, won't remit the carbon charge on natural gas starting in the new year because Ottawa exempted home heating oil.

Moe said the federal government's exemption is unfair, as it mainly helps those in Atlantic Canada. 

Prime Minister Justin Trudeau told reporters Thursday he expects Canadians and provinces to follow the law. 

“Canada is a country of the rule of law and we expect all Canadians to follow the law — that applies to provinces as much as it applies to individual citizens," he said at an unrelated news conference in Ajax, Ont.

Trudeau has said heating oil is far more expensive than natural gas, adding those who use it don't have other options readily available.

Ottawa has also said the carbon pricing system offers rebates, putting more money back into the pockets of most Canadians, and proceeds are returned to the provinces where the charges are collected.

Moe said Saskatchewan is going to proceed with its plans, even if it means breaking federal law. 

"We're going to follow the Saskatchewan law," he said.

Saskatchewan introduced legislation earlier this month to shield executives at SaskEnergy from being fined or given jail time should the company not remit carbon charges. 

SaskPower is the province's electrical utility. Carbon charges appear on people's bills, with the amount depending on how much electricity they use. 

In November 2022, the province announced it would be taking over SaskPower's carbon pricing system. 

The change allows Saskatchewan to collect carbon charges from SaskPower and decide how to spend those dollars. However, Ottawa has set parameters on where the money must be spent, Moe has said. 

SaskPower's website says the province is developing a mechanism to reinvest the funds back into Saskatchewan.

The federal government said it has spent $40 billion to help provinces build clean electricity.

In August, Ottawa announced $74 million to support the development of small modular nuclear reactors in Saskatchewan, led by SaskPower. 

“When we work together, Canadians benefit. That is why we made announcements alongside Manitoba and Alberta earlier this month — to deliver for Canadians," Katherine Cuplinskas, a spokesperson for the federal finance department, said in an email. 

On Wednesday, Dow Chemical announced it's investing nearly $9 billion for a net-zero petrochemical project near Edmonton. The Alberta government is to offer a grant worth $1.8 billion, and Ottawa is to provide up to $400 million in tax credits. 

Saskatchewan Opposition NDP leader Carla Beck said she supports any measures that provide financial relief. 

However, she said, SaskPower has increased rates over the past year. 

"There are other measures that the government could be taking right now to ensure some relief for people right before Christmas," Beck said.

"I would suggest you also look at the proposed suspension of the gas tax that we've proposed that they could do today."

This report by The Canadian Press was first published Nov. 30, 2023.

This is a corrected story. A previous version had the wrong date for when Saskatchewan announced it was taking over SaskPower's carbon pricing system.