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Provincial carbon pricing for industrial emitters approved

Daily Leg Update - The provincial plan to replace the federally imposed carbon tax on industrial emitters is effective Jan. 1.
Environment Minister Dana Skoropad shared the breaking news with reporters at the Legislature of approval of the province’s carbon pricing regime for industry emitters.

REGINA - The province announced Tuesday that its provincial plan to replace the federal carbon tax on industrial emitters has been approved, effective Jan. 1 of next year.

The Saskatchewan Output-Based Performance Standards Program got the okay from the federal Environment Minister Steven Guilbeault.

The Saskatchewan plan will take effect next year instead of the federal backstop. What it means, according to Environment Minister Dana Skoropad, is that all industrial carbon taxes will now stay in Saskatchewan, saving money for industry in the province compared to the alternative.

“It’s a significant amount of savings when you compare our program's to the federal backstop. We’re looking at $3.7 billion in savings for our industry,” said Skoropad. “That $3.7 billion certainly allows our industries to continue to innovate, allows the industries to continue to grow in this province. You know, it’s a program that is balanced and measured, and certainly takes into account the unique Saskatchewan circumstances, quite frankly. And we’ve seen overwhelming support for our program as compared to the federal backstop.”

How it works is that it would be comparable to the federal program in that the carbon pricing signal needs to be maintained, said Skoropad. But the Saskatchewan program also “recognize the good work by our industries already. It’s a baseline, it’s an individualized program as opposed to just a set standard or benchmark.”

Skoropad explained that if they meet that reduction target, or exceed that target, they would have an opportunity to earn a credit of one credit for every tonne of carbon that they would be reducing by. 

If they fail to meet that, they would have the option to purchase the performance credit or contribute to the Saskatchewan Technology Fund. According to the province’s news release, this will create incentives for industry to develop and implement technologies that contribute to meaningful reductions in greenhouse gas emissions intensity.

The industries covered by this are broad-reaching, said Skoropad. He pointed to oil and gas, mining, refining and upgrading, manufacturing and processing, among others. “We’re looking at all sectors.”

In the province’s news release, they pointed to support for the plan from one of their major industrial companies, Mosaic. 

"We're very pleased to hear the announcement from today and appreciate the Saskatchewan Ministry of Environment and Environment and Climate Change Canada for all of the efforts taken to date," Director of Regulatory Affairs and Sustainability for Mosaic Jessica Theriault said in a statement. "This decision will not only contribute to ensuring that our Mosaic sites in Saskatchewan remain competitive around the world, but further supports our ESG commitments and continued role in helping to feed the world."

What is still unclear yet is what the impact will be on SaskPower and SaskEnergy bills for consumers, now that those companies will also be under the new Saskatchewan carbon pricing plan.

When asked about the announcement Tuesday, Opposition critic Aleana Young had a cautious response. “It’s great that we have carbon tax dollars staying in Saskatchewan but there are a lot of questions,” she said. 

“Utility bills, whether they will still have a Saskatchewan carbon tax line, is a big question. What impact there is going to be on rebates to families is another question, as well as what is going to happen to roughly half a billion dollars a year that, by my read of the news release, is going to be staying in Saskatchewan.”