Saskatchewan is now carbon tax free, but some wonder the cost

CBC

01-04-2025

Saskatchewan industrial carbon pricing system is set to end Tuesday, but the province has so far been unable to provide a clear answer on the financial consequences of the decision.
Saskatchewan's system is known as the Output-Based Performance Standards (OBPS) program and taxes large industrial emitters.
NDP finance critic Trent Wotherspoon says the $12-million surplus projected in the province's 2025-2026 budget is now gone and the document "isn't worth the paper it was printed on."
In its 2025-2026 budget, the province projected $431 million in revenue from its OBPS program. With that program paused, the state of the province's finances are unclear.
"Twelve minus 432 does not equal balance," Wotherspoon said on Monday.
End of the industrial carbon tax
Saskatchewan Premier Scott Moe is touting Tuesday as " Carbon Tax Freedom Day."
While all of Canada is marking the end of the federal price on consumer carbon on April 1, Saskatchewan made the additional decision to end its industrial carbon pricing on the same date.
"The people of the province, our governments have been very vocal from the start, being opposed to the carbon tax. So we were thrilled to have the opportunity to do what we did last week," Saskatchewan Finance Minister Jim Reiter said on Monday.
Moe and the Saskatchewan Party have been quick to share statements from organizations celebrating the end of the OBPS program.
Daryl Fransoo, the chair of the Wheat Growers Association, described farmers as the backbone of the province's economy and said they have been hit hard by trade disruptions and tariffs.
"This decision puts money back into farmers pockets," Fransoo said.
Other organizations like the Saskatchewan Farm Stewardship Association, Mosaic Canada, the Saskatchewan Heavy Construction Association and the Saskatchewan Association of Rural Municipalities have also released statements endorsing the decision.
WATCH| Sask. Premier Scott Moe to pause industrial carbon tax:
Sask. Premier Scott Moe to pause industrial carbon tax
5 days ago
Duration 3:10
The decision has not come without criticism.
Brett Dolter, an associate professor of economics at the University of Regina, told CBC News last week that the decision eliminates two of the three pillars central to the 2017 Saskatchewan climate change strategy, entitled Prairie Resilience.
With the end of the industrial carbon emissions tax and the decision to extend the lives of its coal-fired power plants, moving away from clean electricity goals, Dolter said the province is steering away from reducing its emissions.
The province's decision also doesn't end the ability for the federal government to implement its own industrial carbon pricing or "backstop."
Financial impact
Since Moe announced the policy change last week, no one from the government has been able to provide a clear answer on the financial impacts of the decision.
Moe refused to provide a yes or no answer when asked whether the move puts Saskatchewan in a deficit.
Reiter also wouldn't provide a yes or no response.
"The fact is that on any given day commodity prices rise and and fall. It all has an impact on the budget. So we're not going to rewrite the budget every time something like that happens," Reiter said.
Reiter stuck to his answer when it was pointed out that he was describing market factors and not a decision made by the provincial government.
Wotherspoon said the lack of clarity is infuriating.
"Whether or not he's just incompetent or he's not being honest with Saskatchewan people, he has to know that what he's presented to Saskatchewan people is not only nonsense, but also that it fails to step up to the challenges that they face," Wotherspoon said.