Alec Salloum
Regina Leader-Post
Saskatchewan is pausing its provincial carbon tax on industrial emitters, Premier Scott Moe announced Thursday.
Officially, the province collects an industrial carbon tax under the Output-Based Performance Standards (OBPS) Program, which accounts for a projected $431.5 million in revenue, according to the 2025-26 budget released on March 19.
The budget also projected a razor-thin surplus of $12.2 million.
Speaking Thursday morning, Moe insisted that the deferral of the OBPS, which is set to take effect on April 1, will still result in a “balanced budget.”
“We feel that (it) will have an immaterial effect on the budget, but we will have a consultation process with industry on how we would be able to exit that program,” said Moe.
During Thursday’s question period, NDP Leader Carla Beck said the OBPS was largely used as a “slush fund” for government “pet projects” and welcomed its end. But maintained her position that the budget presented last week is not balanced, especially if OBPS is deferred.
“This is why this budget is not worth the paper it’s written on,” said Beck. “The premier has blown a nearly a half-a-billion hole in his budget.”
She asked how big of a deficit there will be now that the OBPS is set to be paused.
Moe didn’t answer and instead expressed a desire for federal leaders currently campaigning to clarify their position on carbon taxes for industrial emitters.
“It is a balanced budget,” Moe said again.
But NDP critic for the economy, jobs and SaskPower Aleana Young pressed government on how it planned to make up for the revenue loss.
“How many SaskPower rate hikes are going to be needed to make up for the lost Sask. Party carbon tax?” said Young.
Moe argued that when industry is regulated and taxed less, their cost of operating goes down and “Saskatchewan families pay less for their power.”
Earlier Thursday, Moe said there was still consultation needed with industry to fully assess the impact of removing the tax.
“We’re going to have those details in the days ahead,” he said.
Minister of Finance Jim Reiter said the budget was difficult to craft given the timelines and uncertainty of the political climate.
“What better way to address affordability?” he said about pausing OBPS.
After question period, Beck said it is “insulting to the intelligence of people in this province” for the government to continue claiming a balanced budget.
The pause comes as the “two major federal parties” have changed their tune on carbon pricing and realized the “harms of the carbon tax,” Moe said. He is urging the Liberal Party and the Conservative Party not to impose a backstop to collect carbon levies from Saskatchewan.
Moe posited that the change will result in lower power bills for Saskatchewan residents and a more competitive business atmosphere.
Saskatchewan stopped collecting the carbon levy on natural gas in January 2024 after the federal government granted an exemption for homes using heating oil, which mostly benefits residents in Atlantic Canada.
“While the industrial carbon tax rate is paused, the Government of Saskatchewan will continue to engage with industry on the future of Saskatchewan’s OBPS system,” said a news release issued Thursday.
Editor’s note: A previous version of this story contained an error. Government-wide OBPS revenues are projected at $431.5 million in the 2025-26 provincial budget.
alsalloum@postmedia.com
