Province, producers pan federal carbon price plan

Scott Moe. -- Daily Herald file photo.

Premier Scott Moe says Saskatchewan’s court challenge still going forward

The province of Saskatchewan convened three of its top-ranking elected officials to decry the federal government’s carbon tax plan during a press conference Tuesday that, at times, got heated.

Premier Scott Moe, Justice Minister Don Morgan and Environment Minister Dustin Duncan spoke with reporters for 30 minutes in Regina Tuesday, in a wide-ranging press conference tackling what the province sees as the shortfalls of the federal government’s carbon tax scheme.

“Today’s announcement by the federal government exposes the Trudeau carbon tax for the sham that it is,” Moe said to kick off the press conference.

“We already know that it’s not good environmental policy. We already know that it’s not good economic policy. And today we learned what it actually is. It’s a cynical attempt by the Trudeau government to buy your vote with your money.”

Moe said the only good news was that the federal government has accepted the Prairie Resilience climate change plan, a set of emissions-reducing regulations passed by the province this year.

“Unfortunately, while some other provinces are being exempted from the Trudeau carbon tax based on partial compliance, they are still going ahead with the portion of the carbon tax that hits Saskatchewan families the hardest by imposing their carbon tax at the pumps… on electricity and natural gas,” Moe continued.

The premier said he rejected the federal government’s argument that, with the rebates coming at income tax time, Saskatchewan families will be better off. He said the scheme amounts to a “financial shell game” and wondered what the point of the plan is if the government refunds the money back.

“This is Saskatchewan,” he said. “Most of us have to drive a lot, and we have to heat our homes on some very cold days in our province. This is all going to cost a lot more now.”

The ministers said the federal plan is based on assumptions that don’t hold true in Saskatchewan. They said the federal plan is based on an international study where the pricing is $500 per tonne higher than the federal government’s maximum of $50 per tonne, and that it’s based on one car per household, where Saskatchewan averages 1.7 vehicles per home.

Duncan, who is also the minister responsible for SaskPower, said the plan also ignores the 40 per cent in emissions reductions the utility has pledged to achieve by 2030.

He estimated the cost for SaskPower will come out to an additional $900 million. Next year, it will be about a $141 million increase. While the Crown corporation is looking at several options, it could work out to a six per cent rate increase, he said.

Duncan said that in an economy like Saskatchewan, where 48 per cent of the GDP comes from exporting goods elsewhere, “transportation is just a way of life.

“We have a relatively small population base spread across a large land base. Oru economy is set up different. We don’t have a lot of options.”

Moe and Duncan said the plan won’t be successful in changing behaviours, especially if the money is just coming back anyway.

“What’s the point? Moe asked. He said the fuel charges are an element of the federal plan the province chose not to pursue because of its impact on families, while not having an impact on the environment. That’s why, he said, the province’s court case arguing the federal tax is unconstitutional is still moving forward.

Morgan explained Saskatchewan’s case has to do with the fact that the federal government is treating different provinces in different ways. It would be as if the federal GST was different province to province, he argued.

“Our goal has to be to reduce emissions. We don’t think a tax is the way to do that. Calling it a pollution pricing system, or any other name, a tax is simply a tax,” he said.

“We are a huge carbon sink because of the trees and crops that are grown here. From a legal point of view, we think those things should be taken into account. But from a pure taxation point of view … it’s wrong to tax differently in one province than the other.”

Plan bad for farmers, advocates say

The federal plan was also lambasted for heaping more costs onto the backs of farmers. While agricultural producers are exempt from the fuel fees for their equipment such as tractors or trucks used in the farming operation, that exemption doesn’t extend to fuel used for grain drying or for shipping product by rail or by truck.

The federal plan “ignores the economic reality of Saskatchewan agriculture,” the Agricultural Producers Association of Saskatchewan (APAS) said.

“Every producer will feel the impacts of the federal carbon tax through increased business costs,” APAS president Todd Lewis said in his press release.

“Farmers and ranchers have no way of passing these extra costs along the value chain. We have no alternatives for these forms of energy use. We have to transport our crops and livestock… we have to use energy to dry grain, or it will rot. We have to heat livestock buildings or animals freeze. This policy will only add costs to our bottom line, without addressing the issue of reducing carbon emissions.”

Duncan was similarly blunt.

“(Liberal MP) Ralph Goodale is divorced from the economic reality of Saskatchewan and how farming actually operates in Saskatchewan,” he said.

“It’s scary to think that is our federal government representative explaining to Ottawa how farming works because he clearly doesn’t understand.”

Province frustrated with lack of communication.

Reporters asked Moe and Duncan how their critical comments could serve the province well in a sometimes-rocky relationship. But Moe said the provincial government only learned its climate change plan was accepted Tuesday, five minutes after Trudeau started his speech.

“We did not have any discussions prior to that,” he said.

“I think the language you have heard and continue to hear is caused by disappointment.”

Industry groups critical of the plan, happy to have stability

The Saskatchewan Chamber of Commerce, in a press release sent Tuesday morning, said it is displeased the government is moving forward with its carbon tax but added that it is pleased that businesses can now plan for 2019 with greater clarity.

“Businesses do not in any way benefit from new taxes and it is often difficult to pass new costs on to their consumers,” CEO Steve McLellan said.

The Saskatchewan Chamber of Commerce has said the solution to reducing emissions will come from energy efficiency, innovation and a greater use of renewable energy.

“While we don’t applaud new taxes by any government, we do acknowledge this announcement provides some clarity and businesses can now plan for 2019 with greater certainty. The Trans Mountain Pipeline moving forward provides future access for our oil to tidewater and the new USMCA will provide clarity on trade with our largest trading partners. While new taxes are always a challenge, prolonged uncertainty is also a huge hurdle for businesses,” McLellan said.

Similarly, the Saskatchewan Mining Association said its members cannot pass along increased costs of fuel to consumers, and argued the plan adds additional costs competitors in countries such as Russia, China and Brazil won’t face. It said it is “unclear” what impacts the fees on fuel will have.

It did, though, say it was pleased the provincial government’s emissions reduction plan was accepted at the federal level.

“The federal government’s acceptance of the province’s Prairie Resilience Climate Change Strategy recognizes the role of Saskatchewan’s mining sector in providing sustainable mineral production for the world,” said president Pam Schwann.

“The world needs what Saskatchewan produces – we are fortunate to have world-class deposits of potash and uranium that help feed and fuel the global community. If we aren’t producing these minerals, other countries with lower environmental, safety and social standards will.”

NDP criticizes provincial government for not taking action

The provincial NDP, meanwhile, blamed the ruling Sask. Party for not doing enough to ensure the federal plan wouldn’t be forced onto the province.

“Scott Moe has once again come up empty in providing Saskatchewan with sound economic and environmental leadership,” leader Ryan Meili said. “He’s spent the last year pointing fingers and railing against a flawed federal approach, but he’s shown no initiative and no leadership in putting forward a plan that works for Saskatchewan people. Our provincial government had the chance to design the program and allocate the revenue from it, but they squandered that chance and now we have neither.”

Meili said his Renew Saskatchewan plan, which would allow people homes, farms, businesses, industry, municipalities and reserves to be assessed and receive financing for clean energy installations or retrofits. Some or all of the cost of the installation would be covered by the Renew Saskatchewan fund and would be paid back over time from power or energy bills based on the value saved by the installation.