In a province defined by a resource-based economy, a carbon tax feels perennially unfair and ineffective, even as emissions skyrocket.
For eight months of the year, I live in Ontario, and for the other four months I live in my home province of Saskatchewan. In Toronto, the weather is extreme, traffic is extreme, and politics can feel extreme. Most days it feels like a crisis is just around the next corner. But in the Aspen Parkland region of Saskatchewan, just south of the boreal forest, it seems possible to believe that problems do not exist. There is a predicted high of 21 degrees today, the crops appear to be growing as anticipated, and gas prices are reasonable. There is no evidence of a crisis here.
But the reality is that greenhouse gas emissions are skyrocketing in Saskatchewan. Between 1990 and 2016 they rose 71 percent, to 76.3 megatonnes of carbon dioxide equivalent. The province’s per capita emissions are 244 percent higher than the national average! The oil and gas sector is the largest emitter (33 percent), followed by agriculture (23 percent) and electricity generation, which is mainly fuelled by coal (20 percent). The province is addicted to fossil fuels — the production and consumption of them.
While some people might want to blame a united front of “powerful conservative leaders” for Canada’s uncontrolled emissions, Saskatchewan has more than 20 years of history of saying no to regulation and a price on carbon. Back in 1997, the province’s left-wing NDP government did not support reducing Canada’s emissions to 6 percent below 1990 levels by 2010 under the Kyoto Protocol. Roy Romanow, who was premier at the time, rejected carbon pricing or any significant regulation of the oil and gas industry in the West. That year — and the ones following — discussion of climate change was completely missing from the legislative Hansard, suggesting broad cross-party agreement on the issue.
In the early 2000s, Premier Lorne Calvert’s NDP government released the Saskatchewan Energy and Climate Change Plan, which called for a 32 percent reduction in greenhouse gas emissions by 2020 and a cut of as much as 80 percent by 2050. Ambitious on paper, the planned route to success was by way of voluntary measures from industry, carbon capture and storage, renewable energy, methane reductions and carbon sinks across the province. Like the previous NDP government, Calvert’s was opposed to a price on carbon.
Less than five months after the release of the plan, the NDP government lost to the right-wing Saskatchewan Party in a provincial election. The new premier, Brad Wall, scrapped most NDP climate change policies and plans except for carbon capture and storage at the coal-fired power plant in Estevan. For the decade that Wall was in power, oil (fracking) boomed and emissions climbed. By the time he left office, the underregulated oil and gas sector had soaring emissions. Indeed, fugitive emissions from the oil patch alone, especially in the flaring of natural gas, account for almost 17 percent of the province’s total emissions.
In 2015, Prime Minister Justin Trudeau committed Canada to emissions reductions to 30 percent below 2005 levels by 2030 under the Paris Agreement. Under Brad Wall, the Saskatchewan Party government rejected Canada’s Paris target and any implications it would have for the province. The province declined to join every other province in signing on to the Pan-Canadian Framework on Clean Growth and Climate Change. (Manitoba initially also refused, but subsequently signed on.) Wall vowed to fight a price on carbon — leaving open the possibility of challenging the federal intervention at the Supreme Court.
While Alberta’s NDP government implemented a carbon tax, Saskatchewan’s NDP remained silent. Finally, in the fall of 2018, the NDP, under Leader Ryan Meili, announced its Renew Saskatchewan energy plan, which focuses on alternative energy but says nothing about a price on carbon. In media appearances, Meili has skirted the issue and insists that the federal carbon tax does nothing but provide political controversy across the country. Thus, once again, there is cross-party consensus on carbon pricing in the province.
Premier Scott Moe’s government produced Prairie Resilience, a “made-in-Saskatchewan” approach to climate change. This was by and large a continuation of the Wall government policy. And it is similar to prior approaches to climate change in the province — albeit less ambitious than Calvert’s 2007 plan. However, Prairie Resilience does include best-performance standards, which amount to a 10 percent emissions reduction by 2030 from large emitters like potash, coal and oil producers. Those that meet the standard are given credits, and those that exceed the standard are required to purchase offsets (from a variety of sources, including best performers, or by paying into a technology fund). Beyond the limited and focused standards, Prairie Resilience proclaims that it supports economic growth, minimal regulatory burdens and flexible compliance options for industry. There is no mention of a price on carbon.
Saskatchewan and Ottawa have agreed to phase out coal by 2030. There is discussion of exemptions for coal plants where carbon capture and storage technology is available (which is just one unit right now in Saskatchewan). Under the agreement, Moe also committed the province to having at least 40 percent of its electricity come from non-emitting energy sources by 2030.
Exemplifying great patience, Ottawa has supported Saskatchewan’s Prairie Resilience and recognized efforts in the province to address climate change; but, at the same time, Ottawa insists that any plan must also include a price on carbon. To that end, the federal Greenhouse Gas Pollution Pricing Act was passed by Parliament. As part of that legislation, the price on carbon — in the form of a levy on fuel — was set to apply (effective April 1, 2019) only in provinces that do not have their own carbon price covering an emissions reduction comparable to British Columbia’s carbon tax. Prairie Resilience regulates only 10 percent of emissions — not enough to avoid the federal backstop (the carbon tax).
In response to the federal act, Saskatchewan filed a legal case in September 2018. Premier Moe followed through on former premier Wall’s promise. The province asked the court to rule on whether a federal price on carbon is constitutional. While the court considered its decision, the federal fuel levy took effect, as planned, on April 1, 2019, in Saskatchewan as well as other provinces without a price on carbon (Ontario, Manitoba and New Brunswick).
Essentially, the effect was that while Saskatchewan asked industry to reduce emissions in a flexible and non-regulatory manner, the federal government was left with the dirty work of applying a carbon tax on households. Popular opinion in the province suggests the public is against a carbon tax, so this played in Moe’s favour. It is now the federal government implementing the unpopular tax while Moe enjoys his status as the most popular premier.
On May 3, 2019, the provincial Court of Appeal ruled, three to two, against Saskatchewan. Chief Justice Robert Richards stated that the Greenhouse Gas Pollution Pricing Act “falls within the legislative authority of Parliament. It is not unconstitutional in whole or in part.” The Saskatchewan Party was disappointed because it believes — much as NDP governments did in the past — that a carbon tax unfairly impacts the province’s resource-based economy, and it argues that a carbon tax is not effective at reducing GHG emissions. Premier Moe immediately promised to appeal to the Supreme Court of Canada. Wasting no time, he filed the paperwork on May 31, 2019. In the meantime, as crisis unfolds in other parts of the world, status quos and hard noes rule on the prairies.
This article is part of the The evolution of carbon pricing in the provinces special feature.
Do you have something to say about the article you just read? Be part of the Policy Options discussion, and send in your own submission. Here is a link on how to do it. | Souhaitez-vous réagir à cet article ? Joignez-vous aux débats d’Options politiques et soumettez-nous votre texte en suivant ces directives.