Federal oil and gas emission cap, methane regulations would cost Sask. billions in revenue: report

The government of Saskatchewan says it rejects federal environmental policy because according to a recent report, it could cost the province tens of billions of dollars in lost revenue.

Speaking at a news conference in Saskatoon on Tuesday about the report from the Economic Impact Assessment Tribunal, provincial Justice Minister Bronwyn Eyre stressed the impact on jobs and the economy in the province. 

The report says the province could lose $4.8 billion to $7.1 billion in royalty taxes and another $22.1 billion to $43.3 billion in government revenue by 2050 under the federal policies.

The report also says direct job losses in the oil and gas sector, along with indirect employment impact, "could mean as many as 34,000 fewer jobs economy wide" by 2050.

"If we don't say it and highlight the problem and highlight the harm, who does?" Eyre said.

She was steadfast that Ottawa deciding how a province uses its resources raises a constitutional issue, but did not go as far to say the province would take Canada to court over the policies — only that Saskatchewan would have evidence, like the new report, if needed.

"If we are to challenge these harmful economic policies, constitutionally or otherwise, we have to have evidence. This arms us with evidence," Eyre said.

The Economic Impact Assessment Tribunal was created under the 2022 Saskatchewan First Act, and is intended to study the economic impacts of federal policies.

Michael Milani, the chair of the five-member tribunal, says it is independent and receives no instruction from the government after its been directed to consider a policy.

It was previously directed to study the federal government's draft clean electricity regulations.

For its latest report, the tribunal was directed to consider how the Regulatory Framework for an Oil and Gas Sector Greenhouse Gas Emissions Cap and a proposed regulation to reduce upstream oil and gas methane emissions by at least 75 per cent from a baseline emission level in 2012 would affect the Saskatchewan economy.

Both federal documents were published in December 2023. The draft regulations for the emissions cap have not been released. The tribunal's report was released this month.

For the report, the tribunal requested submissions from industry companies, with more in-depth submissions from Navius, a consultant company; the Conference Board of Canada, a think tank; the provincial Ministry of Energy and Resource; and an expert in natural resource economics and tax policy.

Based on the information it reviewed, the tribunal found that if the federal initiatives are implemented, the province's "oil and gas production will diminish."