Sask. government vows to submit new carbon pricing proposal to federal government

Premier Scott Moe says Saskatchewan will soon be sending a new submission to the federal government to get provincial control of carbon pricing.

On Wednesday, the premier said new submissions would be sent in the next few months.

"We fully expect the federal government to accept Saskatchewan's plan and give us the same treatment that they have given to other regions of the country." said Moe in a news release.

In July, the federal government rejected the provincial government's proposal to take control of the carbon pricing plan, which would have included a fuel rebate to be paid to consumers at the pump.

According to Saskatchewan's Minister of Environment Warren Kaeding, one of the top priorities of the new proposal is to add electricity generation and natural gas transmission into the province's Output-Based Performance Standards (OBPS) plan for heavy emitters.

The plan, which has been run by the provincial government since 2018, sets baseline carbon emissions targets for separate industries, penalizing companies that go over the set thresholds.

The plan is meant to protect industries that emit a lot of carbon from being at a disadvantage against competitors that do not have emissions plans in place. At the same time, it offers incentives to companies that are able to cut emissions.

Kaeding said it's vitally important that the Crown corporation SaskPower be added into the provincially-run framework and brought out of the hands of the federal government.

"The carbon tax is escalating at a pretty regular standard now from now until 2030 and escalating on a regular basis," said Kaeding.

"We want to have [SaskPower's emissions] under provincial control."

The federal government has said it will not enter into new discussions with provinces on carbon pricing until 2023.

In a statement, Environment and Climate Change Canada argued that money generated from carbon pricing stays within the province, including tax rebates for citizens.

"The Government of Canada has been clear that it wants to work with provinces that want to implement their own pollution pricing systems, to ensure they align with the benchmark standards we have set nationally," read the statement.

"We will work closely with Saskatchewan to ensure their system meets the emissions reduction goals expected by Canadians."

Heavy emitters

On Wednesday, the provincial government also announced it has brought more industries into its OBPS program for heavy carbon emitters.

As of Jan. 1, the program includes new categories like chemical manufacturing, agricultural and industrial equipment manufacturing, and food and beverage processing. The province has also lowered the threshold for smaller companies to gain access to the program.

"I would say every sector in the province of Saskatchewan is concerned about emissions, and each one of them has a unique opportunity to to reduce their emissions over time," said Minister Kaeding.

"We need a transition period, a gateway to allow these companies to gradually work on reducing emissions without affecting them financially or economically."

The provincial government estimates that companies in the program will save a combined $2.3 billion from the time it was implemented to 2030.

Brett Dolter, an assistant professor of economics at the University of Regina who has studied the carbon pricing framework, said plans for heavy emitters are controversial.

"It does open up the question: would this system get us where we need to be when we have now a national goal of reducing emissions to 40 to 45 per cent below 2005 levels by 2030?" he said.

"Likely, we're going to have to tighten our system, and I think the federal government will be looking at that and the federal government will be looking at making it consistent across the country."

Dolter said the program was designed to protect Canadian products from international trade issues. However, he said these schemes might backfire in some cases as more countries adopt carbon pricing.

"Groups like the European Union are now saying, 'If you're going to trade with us and you don't have a carbon price, we are going to put a tariff on your product.'" he said.

Dolter said this means an improved carbon pricing plan should allow Canadian businesses to export to jurisdictions where there are more stringent carbon climate policies.