Saskatchewan to shun federal clean electricity rule as report cites potential harm to province

Insisting that a new report highlights “irrefutable, independent evidence” of harm the federal government’s clean electricity regulations would cause Saskatchewan, the provincial government says it will not comply with the regulations when they come into effect.

According to the report released Tuesday from the Saskatchewan Economic Impact Assessment Tribunal, Saskatchewan’s economic growth under the proposed federal regulations would slow by at least $7.1 billion and the province would lose at least 4,200 jobs.

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The panel was convened last year to examine the economic costs of the federal government’s proposed clean electricity regulations (CER), which would apply to all electricity generators that use fossil fuels, with a plan to limit allowed emissions to an annual average of 30 tonnes of carbon per gigawatt hours a year.

The tribunal draws power from the Saskatchewan First Act and is described as asserting provincial jurisdiction over natural resources.

“This report offers irrefutable, independent evidence that these federal regulations will have a substantial impact on the cost of electricity in Saskatchewan and, as a consequence, our economy and way of life,” Justice Minister and Attorney General Bronwyn Eyre said on Tuesday in Saskatoon.

The province has repeatedly said it’s not feasible for Saskatchewan to meet the federal government’s proposed net-zero targets by 2035, suggesting 2050 as a Saskatchewan goal instead.

Crown Investments Corporation Minister Dustin Duncan on Tuesday said the tribunal’s findings confirm that the federal government’s approach “to regulate our provincial electricity system is unaffordable and technologically and logistically unattainable … We will continue Saskatchewan’s plan to ensure reliable base-load electricity for the next decade of growth and beyond, while working toward a net-zero electricity sector by 2050.”​

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In the report’s analysis, the tribunal found the clean energy regulations, which are set to come into force in July 2025, would also cause the value of exports from the province to be reduced by $8.1 billion. The tribunal said it modelled its study starting in 2025 and concluded in 2035.

Tribunal chair Michael Milani said the panel compared the CER regulations with similar ones drafted by the province.

“The order in council directed us to examine the estimated compliance cost of those draft federal regulations as compared to Saskatchewan’s affordable power plan,” explained Milani, who served on the panel with Janice MacKinnon, Stuart Smyth, Kenneth From and Estella Petersen. Milani said the panel was unanimous in its conclusions.

Milani said to determine the economic impact, the tribunal acquired the services of an outside company to perform the economic analysis. The tribunal relied on data from the Saskatchewan Ministry of Finance and Saskatchewan Crown Investment Corporation (CIC), as well as the Government of Canada and outside entities.

Milani said the federal government timeline is a tight one and assumes sufficient labour will be available. Milani added both Saskatchewan and Canada’s plans are also banking on the deployment of new technologies to meet their targets. Because of that, Milani said, the panel found a longer timeframe could be beneficial as it would give industries more time to comply, while helping to ensure sufficient capital is available.

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“Our conclusion was that with more time available to reach the result that everybody wants, there’s a better likelihood of success, because investment of capital will be more likely,” Milani said.

The panel found the new federal regulations would lead to some power infrastructure having to be retired from service before its life cycle is complete, creating stranded assets. Milani said the panel was also concerned about the possibility of players in certain industries making the decision to leave the province and go to jurisdictions with lower environmental standards.

“They may choose to put their efforts in jurisdictions where there’s actually less environmental regulation,” he said.

Concerns over economic costs to the province brought on due to rising global temperatures were factored into the tribunal’s findings, though they were not their primary focus, he added.

“The data that we considered was less on that front and more on the, I’ll call it the hard cost of job loss and actual costs to GDP.”

Eyre said Saskatchewan’s position is that the onus is on the federal government to prove the constitutionality of the regulations before it imposes them on Saskatchewan.

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