Saskatoon

What would happen if Sask. adopted Alberta's carbon tax?

The average Saskatchewan household would pay about $400 more each year if the province carbon-copied Alberta's $30 per tonne tax, economists say.

Economists say without carbon tax, Sask. will need to pass tighter regulations for dozens of sectors

A carbon tax of $30 per tonne would add 6.7 cents to the cost of each litre of gasoline. It would add 8.03 cents per litre to the cost of diesel. (CBC)

The average Saskatchewan family would pay at least $400 more this year to heat their home, buy goods and fuel vehicles if the province were to adopt Alberta's carbon tax.

That's according to estimates calculated by a number of economists, including the University of Calgary's Trevor Tombe.

That estimate is based on factors including:

  • A 6.7 cent per litre carbon tax on regular unleaded fuel. The average household in Saskatchewan uses roughly 2,000 litres of fuel per year. The carbon tax would add $134.
  • A $1.51 per gigajoule carbon tax on natural gas. SaskEnergy said the average household burns 102 gigajoules of natural gas each year, which means that household would pay $154 in carbon tax.
  • Stores increasing merchandise prices by 0.2 to 0.3 per cent because a carbon tax would make it more costly to heat retail space and truck in goods. Tombe estimates that would cost the average Saskatchewan household between $100 and $130 each year.

"Anything that adds costs to businesses will tend to be passed through to consumers," Tombe said.

Now in its second year, Alberta's carbon tax climbed to $30 per tonne on Jan. 1, 2018.

To reduce the carbon tax's impact on Alberta's poorest people, families there with with dependents can qualify for rebates of up to $540 per year. Individuals can qualify for $300 per year.

Sask. refuses to tax carbon

Saskatchewan is the only province which refused to sign a federal climate plan, which called for a carbon tax in every jurisdiction.

"Federal infrastructure funding should not be contingent on provinces agreeing to a single policy directive, especially one that threatens our economy and jobs," Saskatchewan Environment Minister Dustin Duncan said in February.

Duncan and other government officials said a carbon tax would cost Saskatchewan $4 billion over the next five years.

Some economists call that misleading.

Unless they take the money and burn it on the steps of the Legislature Building, that money is there to be used.- Brett Dolter,  University of Regina economist

"Unless they take the money and burn it on the steps of the Legislature Building, that money is there to be used to cut other taxes," said Brett Dolter.

He's an economics researcher at the University of Regina who's studied Prairie Resilience, Saskatchewan's most recent climate change plan.

Dolter called Prairie Resilience a good start for adapting to forest fires, drought, flooding and other environmental changes.

But he said the province has yet to attach dollar figures to penalties for heavy emitters which fail to meet intensity targets for cutting pollution.

Carbon tax a simple solution: economist

"The thing is not to punish people, it's to change the price structure to encourage people to make these greener decisions with their investment dollars and their purchase decisions," said Dolter.
Brett Dolter is a post-doctoral research fellow at the University of Regina's department of economics, geography and environmental studies. (Kirk Fraser/CBC)

He said by skipping a carbon tax, Saskatchewan's government must now create individual regulations for dozens of sectors to in order to cut emissions.

Dolter said that's a time-consuming and bureaucracy-heavy solution.

"The beauty of the carbon price is it gives you this simple way to ensure the cost being paid is the same across industries and across sectors," said Dolter. 

Already paying carbon tax on power bills 

Beyond that, Dolter said Saskatchewan consumers are already paying a de facto carbon tax on every SaskPower bill.

The federal government's Parliamentary Budget Office shows an implicit carbon price of $57 per tonne for the Boundary Dam III carbon capture and storage project.

Last month, SaskPower said the facility captured 81,008 tonnes of carbon dioxide — approximately 81 per cent of its maximum capacity.

Dolter estimated SaskPower and various levels of government have sunk roughly $1.47 billion into carbon capture and sequestration technology.

Unlike Alberta's carbon tax, though, none of that money has led to rebate cheques for Saskatchewan people.

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