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Saskatchewan to lose $62.5 million if climate agreement is not signed

Saskatchewan Premier Scott Moe said that Saskatchewan will not sign onto the Pan-Canadian Climate Agreement.
Saskatchewan Premier Scott Moe said that Saskatchewan will not sign onto the Pan-Canadian Climate Agreement. File Photo / Global News

Saskatchewan Premier Scott Moe said that Saskatchewan will not sign onto the Pan-Canadian Framework on Clean Growth and Climate Change, which includes support of a price on carbon. That decision will likely cost Saskatchewan over $60 million in federal funding.

The deadline is Feb. 28 for provinces to sign onto the agreement. In return, they gain access to the Low Carbon Economy Leadership Fund worth $1.4 billion.

Saskatchewan’s share would be $62.5 million over the next five years.

Federal Environment Minister Catherine McKenna said she is disappointed Saskatchewan is the lone province not to sign onto the agreement.

“When you sign onto the made in Canada plan you’re acknowledging that there is a need for a carbon price,” McKenna said.

“Saskatchewan has a price on the books.”

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That carbon price is Saskatchewan’s green technology fund for heavy emitters. This was passed by the Saskatchewan Party in 2009 and would see heavy carbon emitters pay into a fund that would be used to fund research for green technology. It has yet to be implemented.

READ MORE: Saskatchewan unveils carbon tax-free climate strategy

On Dec. 4, 2017, Saskatchewan Environment Minister Dustin Duncan unveiled a made-in-Saskatchewan climate strategy meant to be a carbon tax alternative.

The strategy focuses heavily on continued technological development and includes the option for heavy emitters to purchase carbon offsets or pay into the technology fund.

When asked how this differed from a carbon tax, Duncan said it was a market-based approach to pricing carbon.

As for the current situation, Moe said Monday that it’s important for Saskatchewan to be part of that federal funding.

“It’s part of our investments that we will be putting forward in the days and weeks and months ahead to ensure that we can achieve the reductions that we are talking about,” Moe said.

Reductions such as reducing Saskatchewan’s emission by 40 per cent by 2030, and having half of the electricity coming from renewable sources in the same year.

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Both are initiatives McKenna praised, calling them huge opportunities.

“We need to access the low carbon economy fund into the future as we move forward so that we can continue with those reductions into the future, and we would ask that in the federal budget, Saskatchewan is not excluded from that fund,” Moe said.

If Saskatchewan does not sign on, McKenna said the $62.5 million will be transferred to something called a challenge fund. Other groups, like municipalities, businesses, or farmers, would be able to apply for money from that fund to help finance green projects.

Whether Saskatchewan will have the federal carbon tax imposed will be decided this fall when the federal government assesses the provincial and territorial climate plans. They will be looking to see if they meet federal benchmarks. If not, Ottawa will impose a carbon tax of $10 per tonne this year, and then $50 per tonne in 2022.

This is why Moe told reporters on Feb. 27 that Saskatchewan will not be signing the pan-Canadian agreement. He said Saskatchewan will not sign onto an agreement it does not plan on upholding.

“I printed off just one page of the framework, it’s page number 50. The very first line is all jurisdictions will have a carbon price in place by 2018,” Moe said, before reading how that means applying a plan that includes the federal price on carbon.

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“These are things that we cannot deliver on here in the province, so we can’t sign a document such as that.”

Moe said that despite not signing onto the necessary framework, Saskatchewan will still be applying for its $62.5 million. Moe said there is a precedent for province’s receiving funding without signing agreements, pointing to Quebec receiving equalization dollars despite not signing the constitution.