Sask. carbon tax assessment ‘irrelevant’: Goodale
REGINA Days after Saskatchewan released a study purporting to show that Ottawa’s carbon tax plan will cost the province billions, a federal minister dismissed the research as “irrelevant.”
“They appear to have modelled a proposal that no one is proposing,” Public Safety Minister Ralph Goodale, who represents the Regina-wascana riding, said in an interview.
He contends the governmentfunded study appears biased, especially since one of its co-authors was recently an employee of Saskatchewan’s Environment Ministry.
Goodale also pointed to federal numbers that suggest the losses from carbon pricing would be a “rounding error” for the national economy, which would sustain about 0.1 per cent of GDP in 2022. But he was not immediately able to produce provincial-level data to counter claims that Saskatchewan is a special case.
That’s something Environment Minister Dustin Duncan criticized the federal government for failing to do last week, as he announced a study contracted out to the University of Regina’s Institute for Energy, Environment and Sustainable Communities. He said it showed that Saskatchewan’s export-dependent economy would suffer $16 billion in lost growth by 2030.
But Goodale said the scenario analyzed by that study bears little resemblance to any realistic carbon-pricing plan — neither to the federal backstop nor to what other provinces are doing. He said it’s “divorced from reality ” and paints a “worst-case scenario.”
“They assume a carbon tax and then they assume the carbon tax would be fully applicable to agriculture and farm fuel consumed in agriculture,” he said. “We have made it abundantly clear from the very beginning that farm fuel consumed in agriculture is exempt.”
That makes a big difference, said Goodale, given the value of agriculture to Saskatchewan. He said the study also doesn’t account for options like sparing small oil and gas producers, as other provinces have chosen to do.
“The provincial focus has been in a single-minded way on setting up the straw man of a carbon tax as the only game in town and then knocking down that straw man,” said Goodale.
Saskatchewan’s Environment Ministry responded to Goodale’s criticisms in a written statement to the Leader-post, saying that agriculture is only “partially exempt” from the federal tax. It said that the scenario Duncan highlighted “reflects the federal government’s plan,” with the exception of output-based performance standards that are not yet known.
“The federal carbon tax offers no exemption for natural gas or propane used to dry grain or heat farm buildings or for fuel used to ship products to market,” read the province’s statement. “These same producers sequester close to 12 million tonnes of carbon dioxide yet will still be subject to increased taxes by the federal government.”
The two sides also disagree on how the study treats carbon tax revenues. Goodale argues it doesn’t account for all the ways the province could use the money to protect sensitive industries or reward innovation, including in agriculture. But the provincial statement notes that there is no evidence the federal plan — presumably meaning a backstop carbon tax under the Greenhouse Gas Pollution Pricing Act — would do that.
Ottawa’s carbon backstop will come into effect in 2019 if Saskatchewan fails to design a system that complies with federal standards, starting at $10 per tonne and rising to $50 per tonne by 2022.
All the money will be returned to Saskatchewan, according to the act. But it leaves plenty of wiggle room about how. That has prompted some to speculate that the feds will simply send the revenues back to taxpayers.
Goodale, however, hinted that might not be the case.
“The form in which it would be returned to Saskatchewan has yet to be determined,” he said. “The objective obviously would be to have the maximum economic benefit, not just fritter it away. And the Saskatchewan model assumes you fritter it away.”
He said the federal government will look carefully at the province’s study to see if anything can be gleaned from it. But he said he thinks independent analysis is generally more helpful than government-sponsored research — a justification he offered for Ottawa’s reticence to release its own numbers. Goodale said the province’s study falls short of what he’d call independent.
“The government commissioned the study, the government paid for the study, the government set the terms of reference for the study and there was at least one employee of the government that was a part of the analysis,” he said.
Scott Pittendrigh, listed as a provincial government employee on a web posting for the study, ceased employment with the province’s Climate Change Branch in November of last year, according to the province’s statement.