Home   Ag Industry News

Carbon tax could cost Sask. $16B

Carbon tax could cost Sask. $16B

A federal carbon tax could negatively affect the province’s GDP, a new study shows

By Kate Ayers
Staff Writer

A federal carbon tax could reduce Saskatchewan’s gross domestic product (GDP) by nearly $16 billion by 2030, a recent study from the University of Regina revealed.

The tax will also have little effect on emissions levels, the analysis showed.

“The federal government has significantly underestimated the economic impact of its carbon tax and overestimated the expected greenhouse gas (GHG) reductions,” Dustin Duncan, Saskatchewan’s environment minister, said in a provincial government release yesterday.

“This new and more thorough model indicates GDP reductions in the billions, which translates to less competitive industries in Saskatchewan and fewer jobs across the province.

“This is exactly why our government has never supported the tax and is challenging it in court.”

Researchers at University of Regina’s Institute for Energy, Environment and Sustainable Communities, along with provincial government officials, examined various scenarios of a federal carbon tax, the release said.

The most conservative scenario of a $50-per-tonne carbon tax would reduce the province’s GDP by 2.43 per cent or $1.8 billion annually. In total, this tax would drop the GDP by $16 billion by 2030, results showed.  

Government of Saskatchewan photo

In addition, the tax would only lower GHG emissions by less than one megatonne, which accounts for only 1.25 per cent of the province’s total emissions, the release said.

In the process, a federal carbon tax could cost an average Saskatchewan household over $1,000 per year, University of Calgary research showed.

“The federal government has not accounted for energy-intensive trade-exposed industries that drive our economy and has not told Canadians what they will be paying or what little impact that price will have on emissions,” Duncan said in the release.

“Our strategy will enhance our resiliency to climate change, result in actual emissions reductions and ensure our industries remain competitive.”

Last year, Saskatchewan exports made up 47.7 per cent of the provincial GDP, the release said.

Prairie Resilience, Saskatchewan’s own climate change strategy, has several components that promise to reduce GHG emissions.

SaskPower, for example, committed to achieve up to 50 per cent electricity capacity from renewable resources, the release said. This contribution would reduce GHG emissions by 40 per cent, or six million tonnes, by 2030. 

Also, a methane reduction strategy will reduce GHG emissions by up to 45 per cent, or 4.5 million tonnes, over the same period. 

Saskatchewan’s climate strategy recognizes the role that agriculture plays in mitigating climate change and lowering emissions. For example, farmers sequester about 12 million tonnes of carbon through management practices like no-till.  



Trending Video


Video: Mesonet

Wes Lee, OSU Extension Mesonet agricultural coordinator, says though it’s hard to complain about the rainy weather, it’s currently impacting wheat harvest.