Sask. Premier Brad Wall says federal carbon tax could take $1.3B out of provincial economy

Saskatchewan Premier Brad Wall says a federal carbon tax would seriously damage the provincial economy.

Premier says families, farmers, small businesses would suffer

Premier Brad Wall says he won't be signing on to a federal carbon tax. (CBC)

Saskatchewan Premier Brad Wall says a federal carbon tax would seriously damage the provincial economy.

Speaking to reporters in Saskatoon, Wall said everyone from homeowners to mining companies would be hurt by the proposed federal tax.

"I can tell you with the energy sector reeling in Canada, with the overall Canadian economy struggling, it's my view, it's the Saskatchewan government's view, that the very last thing we need right now is another new tax," he said.

"The timing for a new tax on families, on businesses, on job creators, is not now, certainly."

Could cost homeowners: Wall

According to numbers from the provincial government, an average homeowner would be paying an extra $400-$500 per year if a $15/tonne carbon tax was brought in.

A $40/tonne carbon tax would cost homeowners $1,200 per year.

The provincial government estimates a $40/tonne carbon tax would take $1.3 billion out of the Saskatchewan government as a whole, including $80 million from the agricultural sector.

National meeting

Wall will be meeting with Prime Minister Justin Trudeau and the country's premiers this week to talk about environmental issues, especially the idea of a federal carbon tax.

"The timing for this is simply not now," he said. "And if there is a national carbon tax that is a part of these agreements, or the declarations that are proposed to being signed in Vancouver this week, I will not be signing them."

While Wall could eventually see a form of carbon tax eventually, he would like to see a system whereby heavy polluters would be charged, and the money put into in a provincial technology fund. The money would be used to fund projects such as the carbon capture and storage system at SaskPower's Boundary Dam station.

SaskPower's carbon capture plant at Boundary Dam (SaskPower)

Wall admitted that carbon capture technology has run into snags, but said now the project at Boundary Dam is running "exceedingly well."

Carbon taxes as a distraction

Opposition leader Cam Broten said Wall is using a potential carbon tax as a smokescreen.

"I think he loves having these discussions because he's not talking about the budget mess that he's made here in the province," Broten said. 

Broten noted the Saskatchewan Party passed legislation in 2011 which would have made heavy industrial emitters pay into a green technology fund. The law has not yet come into effect.

The NDP leader said a technology fund "has merit" and is something his party supports.

However, officials at the premier's office today said given the state of the economy, this is not the time to impose any emission-related levies.

Keeping money raised in Saskatchewan 

Broten and Wall agree on one thing. Money from any future carbon-reduction measures should remain within Saskatchewan.

"We don't want it going to the federal government," Wall said.

"We already have that," he continued. "It's called equalization and coincidentally, the amount that Saskatchewan taxpayers will pay into equalization this year, even with oil at $30 West Texas, is about $500 million, the same amount a low-end carbon tax would be."

Uncertainty about Ottawa taxing provincial Crown corporations

Ultimately, Wall isn't sure that the federal government could apply a carbon tax to SaskPower and SaskEnergy, both provincial Crown corporations, because the federal government cannot tax a provincial government.

"We think we can mount a challenge," he said. "At least protect SaskPower customers and SaskEnergy customers from a federal tax levy."