October 23rd, 2018
Good morning everyone. Thank you for coming.
Last week, the world’s best scientists once again issued serious warnings about rapidly-approaching and potentially deadly risks posed globally by Climate Change. While some parts of the world are totally vulnerable, we live in a country which has the capacity to help prevent, mitigate and adapt to the consequences.
But time is quickly slipping by. Maybe it was the sense of urgency in this most recent scientific analysis which left a bigger impression on most people than many previous reports.
My purpose this morning is to highlight the most recent steps to implement Canada’s Pan-Canadian Framework on Clean Growth and Climate Change, and especially the advantages for Saskatchewan.
There are three main developments today:
First, to deal with greenhouse gases from heavy industrial emitters – especially those with international competitiveness issues – the Government of Canada welcomes Saskatchewan’s “output-based performance standards” as a good first step in putting a price on pollution. Effectively, that is what it does. And it presents an opportunity to work together.
Saskatchewan’s plan will cover about 11% of provincial emissions and result in an estimated 1% reduction in greenhouse gases from the covered sectors by 2030. We look forward to the plan’s implementation.
Since the provincial plan does not cover either electricity generation or natural gas pipelines, the federal backstop will apply to only these two sectors among heavy emitters, in an effort to make the overall result more comprehensive.
Of particular note, the rules affecting electricity generation will be sensitive to the several different sources of power generation in Saskatchewan. SaskPower has access to coal, diesel, gas, hydro, wind and solar supplies. The greener the source, the lower the cost.
Secondly, to put Saskatchewan on the same footing as other provinces, the federal backstop will also institute a “regulatory charge” on fossil fuel consumption, to be collected from fuel producers and distributors, starting in April of 2019. It works out to about 4-cents per litre on gasoline – less than many regular price fluctuations in the market on any given day. It will rise gradually over time.
Please note – gasoline and diesel used on farms are exempt.
The combined direct and indirect effects of all these measures in Saskatchewan have been estimated at $403 dollars for the average Saskatchewan household in 2019.
Third, and most important, all of this money will be returned directly to the people of Saskatchewan – primarily through a new tax-free “Climate Action Incentive” which will be paid to every household when everyone files their federal income tax next spring.
A large majority of Saskatchewan households will receive an Incentive that is actually bigger than their real costs. For example, the Incentive for a typical Saskatchewan family of four will be just over $600. The average Saskatchewan household will receive $598 – that’s nearly 50% more than their projected costs of $403.
The formula also provides a 10% top-up for rural households outside of Regina and Saskatoon – recognizing Saskatchewan’s geography and the fact that access to pollution-cutting transit exists only in the bigger cities.
Most individuals, families and households will be better off with this federal plan from the very beginning, and if they strive to become more energy efficient, which is the objective, everything extra that they gain stays in their pocket.
They might decide to retro fit their home to stop wasting energy and save on power bills. While there is a capital cost upfront, their monthly expenses will ultimately go down, and they will continue to receive their full Climate Action Incentive. They’ll be “money ahead”, both ways.
Beyond the Climate Action Incentive going to households, a smaller portion of the revenues from pricing pollution will provide some extra support for small and medium-sized businesses (about $295 million over five years) and for municipalities, universities, schools, hospitals, non-profit organizations and Indigenous communities (about $150 million over five years) – all in Saskatchewan.
Every nickel stays here.
The most obvious impact of Climate Change in our province is the increasing frequency and severity of damaging weather cycles, including storms and floods, droughts and wildfires, and harvest conditions like this year that leave valuable crops wasting in the field. The total losses for Saskatchewan in just the last few years have added up to hundreds of millions of dollars.
The private insurance industry can tell you what they’ve had to pay out. Nationally, government compensation for losses from natural disasters in the last five years has exceeded the volume of all previous payouts stretching back through 40 years.
So doing nothing about Climate Change is not cost free.
By putting a price on pollution, we can start avoiding some of those costs, with an incentive to reduce pollution that will actually increase disposable incomes. All the money and all the benefits remain in Saskatchewan – in the pockets of families (rural and urban), municipalities, schools, universities, hospitals and others. The economy will grow and pollution will go down.
Before we go to questions, I would like to give one of Saskatchewan’s pre-eminent engineers a moment to talk about “big water”. Climate Change has a profound impact on water – either too much of it or too little. And we need to build better structures and systems to protect it and optimize its use.
Quite apart from the financial measures being announced today, our federal plan on Climate Change includes a $2 billion federal fund to help build major transformative infrastructure projects to advance flood-proofing, drought-proofing, and water-based economic development for growth and diversification. This is a huge opportunity for Saskatchewan.
And no one knows that topic better than Wayne Clifton…