Sask. gains control over industrial climate pricing
Consumers will have to wait to see if carbon tax is removed from bills
Saskatchewan Environment Minister Dana Skoropad says it's still unclear whether the carbon tax will apply to Saskpower and Saskenergy bills after the province gained full control of an industrial climate pricing program on Tuesday.
Skoropad told reporters that while he would like to see the whole carbon tax removed, more work is needed to determine whether people will see changes to their bills.
“This certainly isn't the end of the journey,” he said. “This is now really the critical work of how this is going to specifically look in this province.”
On Tuesday, the federal and provincial governments announced Saskatchewan's electricity and natural gas industries will no longer have to follow Ottawa's climate pricing program.
This means Saskpower and Saskenergy can now work with Saskatchewan's own pricing system.
In a news release, the Saskatchewan government said its own Output-based Performance Standards Program (OBPS) meets the requirements for the 2023-2030 carbon pricing benchmark.
The province said this means all carbon taxes collected by industrial emitters will now stay in Saskatchewan. The government claims this will save the industry an estimated $3.7 billion between 2022 and 2030.
Skoropad said the figure was arrived at after consulting with industry, which provided the government with data.
“We were able to provide that to the federal government. So, that was critical in us pushing this over the goal-line,” he said.
The federal government's OBPS plan had previously applied to Saskatchewan's electricity and natural gas industry. This meant facilities that emitted above their limit had to pay, while those below received credits they could sell or use later.
The goal of the federal program was to provide companies with financial incentives to reduce their emissions.
Through its own OBPS program, Saskatchewan already had control over many manufacturing industries, including those that deal with chemicals, agriculture, wood products and minerals. This change now means Saskatchewan will have control of electrical and natural gas emitters.
Despite these changes, Ottawa said the federal fuel charge will remain.
This means carbon taxes will still apply, though the federal government notes 90 per cent of the proceeds are returned to households.
A family of four in Saskatchewan can expect quarterly climate rebates of about $340.
While the government works out what this will mean for energy bills, NDP energy critic Aleana Young told reporters she hopes additional funds go toward reducing emissions and affordability relief.
She said hundreds of millions of dollars per year was being sent to the federal government through the pricing system, noting Saskatchewan could now be receiving that cash.
“It's a Saskatchewan carbon tax now, not a Justin Trudeau carbon tax,” she said. “I don't see any policy indication suggesting they would remove that (tax from energy bills).”
As for industrial emitters, those under Saskatchewan's plan will receive a credit for every tonne of carbon emissions under their permitted amount. The government says this creates incentives to reduce emissions.
The Saskatchewan OBPS will also include a credit for using carbon capture, utilization and storage methods. Users will have the option to pay into the province's technology fund.
Skoropad explained emitters will have the option to purchase credits from others or pay into the technology fund. The price they will pay will have to match the federal price.
Skoropad said Ottawa still has the money it collected from industries when they were operating under the federal program. He said the province is looking to retrieve those dollars.
The federal government said it will work closely with Saskatchewan to ensure a smooth transition for affected facilities. Under its program, it had developed a fund that intended to return the proceeds it had collected from jurisdictions.
Skoropad said negotiations over the federal carbon tax are a separate matter with Ottawa.
Saskatchewan had lost its Supreme Court challenge in 2021 against the federal government over the carbon tax. The top court had ruled in favour with Ottawa.