Sask. carbon pricing pitch not certain to receive federal approval
Premier Scott Moe plans to create Sask.-made consumer carbon pricing plan
The Saskatchewan government has announced its plans to transition from a federally imposed carbon backstop to its own pricing system, but Ottawa is still awaiting the province's formal pitch and questions linger about whether Saskatchewan's approach will be approved.
On Thursday, Premier Scott Moe said the province will not be "subject" to the federal government's carbon tax. He said instead the province will seek approval from Ottawa to implement its own carbon pricing system for consumers.
Saskatchewan already has an approved carbon pricing system for heavy emitters.
Moe's hand was seemingly forced, as the province ran out of legal options to challenge Ottawa's Greenhouse Gas Pollution Pricing Act by a 6 to 3 decision from the Supreme Court of Canada ruling the act to be constitutional.
Moe offered a preview of the direction the province wants to go, pointing to four areas where the province would look for the federal government's approval:
- Allowing SaskPower and SaskEnergy to fall under the provincial heavy emitters regulations.
- A consumer carbon price on fuel, a portion of which would be rebated at the fuel pump.
- An offset program for heavy emitters.
- Commitment to the development of small modular nuclear reactors.
Sask. following New Brunswick's lead
Saskatchewan's pitch for a fuel rebate would be comparable to what New Brunswick had done, Moe said.
After initially being subject to the backstop, New Brunswick decided to adopt its own plan following the 2019 federal election. The plan was approved in late 2019 and went into effect in April 2020.
New Brunswick's system complied with the federal government's plan for a 6.6-cent-per-litre levy at the pumps. The province also slashed its gas tax by more than four cents, leaving consumers with a net cost of two cents per litre.
Following Saskatchewan's announcement Thursday, federal Environment Minister Jonathan Wilkinson told CBC's Power and Politics that such a move to mimic New Brunswick's rebate at the pump "would defeat the whole purpose. It would defeat the price signal that exists, which is to incent[ivize] people to adopt more efficient behaviour."
Asked why Ottawa allowed New Brunswick to do it last year and won't let Saskatchewan do it now, Wilkinson said that is "something that we are looking to change and to fix on a go-forward basis."
On Monday, Saskatchewan's Environment Minister Warren Kaeding said the Supreme Court's ruling means the federal government can set a minimum national standard.
"It is our expectation that the minimum standard already set by Ottawa through approved provincial plans such as New Brunswick's would be acceptable for Saskatchewan."
Moe did not specify a timeline for when the province would submit its pitch to the federal government, but the process would take place over the next few months.
"Our focus will continue to be on creating the best plan for Saskatchewan to address climate change effectively while minimizing the financial impact on Saskatchewan people," Kaeding said.
"We will seek to work co-operatively with the federal government to devise a plan that addresses climate change and reflects the reality of Saskatchewan's economy."
Kaeding said the federal government would need to "decide and explain to Canadians the reasons for accepting or rejecting the plans put forward by Saskatchewan or any other province to address climate change."
On Monday, federal minister Wilkinson said in a statement that Saskatchewan was subject to the backstop for failing to put a price on pollution for fuels.
He said that as a result, a family of four will receive $1,000 in their taxes this year.
"We've always said that provinces and territories have the flexibility to be able to introduce their own carbon pricing mechanisms, so long as they meet certain national minimum standards."
Wilkinson signalled in December that plans like New Brunswick's may not be accepted going forward.
"We said in December when we released our strengthened climate plan that those national minimum standards need to be strengthened to ensure that we can continue to meet the environmental goals and economic ambitions of Canadians."
Wilkinson said his office has been consulting with all provinces and territories "about the strengthened benchmark and will continue to do so going forward."
He said the federal government would work with Saskatchewan on its plan.
"It is good to see Premier Moe's newfound interest in developing a made-in-Saskatchewan pollution pricing plan. We are certainly open to conversations with Saskatchewan about what that system could look like."
The carbon tax has been Moe's major political issue as premier and in his previous role in cabinet under former Premier Brad Wall.
In 2017, as environment minister, Moe pledged to never allow Saskatchewan to have a carbon tax.
In 2019, then-Saskatchewan Environment Minister Dustin Duncan told media after New Brunswick's plan was approved that he wasn't sure how the plan met the federal standard.
"If that's the case, then what are we talking about? It really shows what this is all about. It is really not about reducing emissions," Duncan said.
What other resistant provinces have announced
Saskatchewan was joined by Alberta and Ontario in the Supreme Court challenge. All three provinces were subject to the federal government's backstop because they had not developed a consumer carbon pricing regime.
Last week, Alberta Premier Jason Kenney said the province did not have an immediate fallback plan.
"It was our hope that we would win. Now we're going to consult with Albertans on the path forward."
On Monday, Ontario Premier Doug Ford said he would collaborate with the federal government and referred to the carbon tax as a "terrible tax."
with files from CBC's Jacques Poitras and Alexander Quon