May 2021
Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy
In December 2017, Saskatchewan released Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy . The strategy was initially intended to address greenhouse gas (GHG) emissions and adapt to climate change without introducing a carbon tax. It outlines commitments across five areas designed to make Saskatchewan more resilient to the climatic, economic and policy impacts of climate change.
The province has released new components of the strategy since its initial publication, including a framework to measure and improve the province’s resilience, output-based performance standards to regulate industrial emissions intensity reduction, oil and gas emissions management regulations, and a Methane Action Plan. These actions are intended to reduce Saskatchewan’s GHG emissions by 12 million tonnes by 2030.
Management and Reduction of Greenhouse Gases Act
The Management and Reduction of Greenhouse Gases Act (the Act) is Saskatchewan’s central legislation for the reduction of GHG emissions. Among other things, the Act establishes output-based performance standards that apply to certain large industrial facilities emitting greater than 25,000 tonnes of carbon dioxide (CO2) equivalent per year of regulated emissions in sectors including mining, manufacturing, pulp, steel, fertilizer, refining, oil and gas, forestry and waste. Facilities that emit 10,000 – 25,000 tonnes of CO2 equivalent per year can apply to become a regulated emitter under the Act.
The following regulations have been enacted:
Since the output-based performance standard established by the Act only partially meets the federal benchmark stringency requirements in the federal Greenhouse Gas Pollution Pricing Act (GGPPA), the federal carbon pollution pricing system applies to emission sources in Saskatchewan not covered by the provincial system.
Specifically:
- the federal output-based pricing system applies to electricity generation and natural gas transmission pipelines, which are not covered by the Act., It applies to those facilities that emit 50,000 tonnes or more of CO2 equivalent annually.
- a fuel charge applies to fossil fuels, generally paid by registered distributors (fuel producers and distributors). The fuel charge is currently $30 per tonne of CO2 equivalent. It will increase by $10 annually on April 1, 2021 and then a further $10 on April 1, 2022.
Constitutional challenge
In Reference re Greenhouse Gas Pollution Pricing Act, 2019 SKCA 40, Saskatchewan challenged the constitutionality of the GGPPA at the Saskatchewan Court of Appeal (SKCA).
In a 3-2 decision, the SKCA upheld the constitutionality of the GGPPA. The majority held that Parliament has authority over the subject matter of the establishment of minimum national standards of price stringency for GHG emissions by virtue of the national concern doctrine of Parliament’s peace, order and good government power.
On September 22 and 23, 2020, the Supreme Court of Canada (SCC) heard appeals in relation to Saskatchewan’s challenge, together with similar reference appeals from Ontario and Alberta. At the SCC hearing, all the provinces, except British Columbia, brought strong positions against the Act on the basis that it is paternalistic and usurps their right to impose their own climate change policies. British Columbia argued in support of the constitutionality of the Act, emphasizing that federalism should not be a barrier to addressing climate change. The federal government argued that denying Parliament jurisdiction would “leave a gaping hole in the Constitution.”
On March 25, 2021, the Court released its much-anticipated decision, upholding the constitutionality of the Act. The majority of judges in the 6-3 split decision emphasized the importance of a national approach to addressing climate change, noting that the climate crisis is “an existential threat to human life in Canada and around the world.”
Given that the SCC is Canada’s highest appeal court, this decision is the final say on the Act’s validity.
Oil and gas conservation and emissions
The Oil and Gas Emissions Management Regulations, which came into effect on January 1, 2019, regulate flared and vented methane emissions in the upstream oil and gas sector with the goal of achieving annual emission reductions of 40 to 45% by 2025.
On May 15, 2019, Bill 147 – The Oil and Gas Conservation Amendment Act received Royal Assent. It amends The Oil and Gas Conservation Act to facilitate the regulation of emissions in the oil and gas sector.
Equivalency agreement on coal
The Government of Saskatchewan and the Government of Canada entered into a Canada-Saskatchewan equivalency agreement regarding GHG emissions from electricity producers (the Agreement).
The Agreement allows the Governor in Council to make an order declaring that the provisions of the Coal-fired Electricity Regulations do not apply in Saskatchewan. In exchange, Saskatchewan agrees to have at least 40% of its electricity generation capacity be from non-emitting energy sources by 2030. Saskatchewan agrees to meet this target with milestones for the range of percentages of its electricity generation capacity that is from non-emitting sources of a minimum of:
- 26 - 30% by December 31, 2021
- 30 - 34% by December 31, 2024
- 34 - 40% by December 31, 2027
- 40 - 50% by December 31, 2030
The Agreement is vital for Saskatchewan, given the province’s heavy reliance on coal to produce energy and the federal government’s recent announcement that it is seeking to completely eliminate coal power generation by 2030.