Michael Joel-Hansen
Saskatoon StarPhoenix
Saskatchewan’s provincial government issued a response on Tuesday to a report released by the Saskatchewan Economic Assessment Tribunal that found the federal oil and gas emissions cap and federal Methane 75 regulations “would cause substantial economic damage to Saskatchewan.”
The report asserts that by 2050, Saskatchewan’s oil production would fall by between 38 and 52 per cent, leading to royalty and tax revenue losses of between $4.8 and $7.1 billion, under the federal schemes. It predicts total lost government revenues would be around $43.3 billion.
The tribunal was made up of chair Michael W. Milani and vice-chair Janice MacKinnon, along with Kenneth From, Stuart Smyth and Estella Petersen.
Justice Minister and Attorney General Bronwyn Eyre held a news conference in Saskatoon on Tuesday to reiterate her government’s position that the federal government does not have the authority to impose the new regulations.
“Oil production, methane regulation fall exclusively within provincial jurisdiction over natural resources,” she said.
While hearing the case against the federal carbon tax, dissenting judges raised concerns about the federal government picking ‘winners and losers,’ which is what the federal government is doing with its current policies, Eyre said, citing the federal government creating exceptions for home heating oil as an example.
Under the current arrangement, oil-producing western provinces are saddled with an unfair handicap, Eyre said, though she admitted certain forms of energy are likely to be on the outside looking in as jurisdictions seek to reduce their emissions.
“If we can agree that our goal is clean energy, then yes, in that case uranium plays some part in the mix and coal probably plays less of a role,” she said.
When questioned about the next steps, Eyre said the information gathered by the tribunal for its report could be part of a future legal challenge.
“I think that after the election we have to look very, very carefully at what our legal paths are forward,” she said.
The new regulations will not have a positive impact on reducing emissions, Eyre argued, stressing repeatedly that the province has taken positive steps to reduce emissions in the oil and gas sector.
“On its own Saskatchewan has reduced emission by two-thirds, in terms of methane,” she said.
Tribunal chair Michael Milani said the report found the federal emissions cap could lead to ‘carbon leakage,’ which happens when oil producers move their operations to places with fewer regulations, which could lead to a rise in emissions.
However, Milani said the tribunal’s research does not pinpoint which jurisdictions producers could leave for.
“There’s no finding by the tribunal as to where leakage may occur, but rather simply pointing out that one of the risks of the federal initiatives is that some industry might choose to operate other than in Saskatchewan and Canada,” he said.
In making their calculations about future oil production demand, Milani said the tribunal looked at forecasts from the Conference Board of Canada and Navius Research. It also relied on Saskatchewan’s Ministry of Energy and Resources for data.
“It was considered by the three groups, if I may say that, in different ways,” he said.
The tribunal opted not to provide recommendations about how to proceed. Milani said this decision was made due to the complexity of the matter.
“We determined as a tribunal that the best thing to do was to provide all of the factual information and leave the recommendation aspect and the steps forward to government.”
