Sask. won't comply with proposed clean electricity regulations; feds call reasons 'incorrect conclusions'

The Saskatchewan government says it won't comply with federal clean electricity regulations when they come into effect.

The statement, posted in a news release Tuesday, is in response to the Saskatchewan Economic Impact Assessment Tribunal's conclusion that if the draft clean electricity regulations are implemented, it would stunt job growth and cost billions of dollars.

The regulations are meant to help the shift toward a net-zero electricity grid, help provinces and territories maintain electricity affordability for Canadians and businesses and maintain grid reliability, according to a federal website.

But the provincial tribunal said when compared with Saskatchewan's Affordability Plan, the regulations will not aid with affordability.

Tribunal chair Michael Milani said on Tuesday that for the period from 2025 to 2035, Saskatchewan's economic growth, as measured by gross domestic product, will be at least $7.1 billion lower if the federal regulations were to apply.

Milani also said there would be 4,200 fewer jobs, mainly because of increased electricity costs.

In a Tuesday statement to CBC Saskatchewan, the office of federal Environment Minister Steven Guilbeault said the province's decision is not surprising but called the reasons "incorrect conclusions."

Guilbeault's office accused Saskatchewan of launching the tribunal with an "underlying ideological agenda" to build a political fight with the federal government.

"The results of this report are wildly out of sync with all the benefits we know come with building out a cleaner grid. Saskatchewan is ideally situated to be a leader in these economic opportunities," said the statement.

Disagreements over costs 

The five-person Saskatchewan tribunal was created in tandem with the Saskatchewan First Act in 2023, with goals to assert exclusive rights under the Constitution and combat what Justice Minister Bronwyn Eyre described at the time as "constitutional overreach" by the federal government. 

"We cannot participate in federal economic harm to our province," Eyre said in a news release issued Tuesday morning. 

The release says Saskatchewan has placed the onus on the federal government to prove the constitutionality of the regulations before it imposes them on the province.

"We will not be submitting taxpayers to the cost of litigation against the federal government unless litigated against," said Eyre.

The Saskatchewan government refers to the federal initiatives it believes could cause harm to provincial projects, operations, activities, industries, businesses or residents. In this case, the tribunal was asked to review the clean electricity regulations in November 2023, Milani said.

The tribunal determined that by 2035, residential ratepayers would pay $241 more in electricity costs under the draft regulations. Similarly, commercial ratepayers and small industrial ratepayers would pay $888 and $1,429 more respectively.

Milani said the tribunal found that the technology needed to meet the draft federal regulations does not exist and the time limit stymies industry from meeting the deadlines. It also found the province likely won't have the labour available to meet the regulations within the deadline.

"We also concluded that in order to make this work, people have to lend money; they have to invest capital. Businesses have to want to make these changes," Milani said.

He said it's possible that businesses that can't meet the labour, technology or other requirements may move elsewhere.

Will Noel, an electricity analyst with the Pembina Institute, said he was surprised the provincial government said it would not comply with the regulations.

He was also concerned with the source of the data.

"It seems, if I'm not mistaken, that the analysis is based off the original language from the clean electricity regulations that were published back in August," he said.

Ottawa made changes to the regulations in February, according to the government website.

The tribunal contracted consultant Navius to prepare a study that used economic models to compare the clean electricity regulations with Saskatchewan's Affordability Plan.

Meanwhile, Guilbeault's office said Saskatchewan has significant opportunities to profit by transitioning its grid to clean energy. That includes through the development of carbon capture and storage technology, small modular nuclear reactors and renewable energy, according to the federal ministry.

All parts of Canada will see increased expenditures to expand the production of electricity, the ministry's statement said, in response to the "twin demands of a growing economy and population" and the desire to transition from fossil fuels.

But that will lead to future gains, according to the minister's office, since building a cleaner grid will not only create thousands of jobs in Saskatchewan, but also support more affordable electricity rates for residents over the long term. 

Guilbeault's office pointed to third-party studies that project that the transition to clean electricity will result in lower energy bills for most households by 2050.

The statement also maintained the federal clean electricity regulations will have a small impact on the expenditures, in order to ensure that the "build out of electricity is as clean as possible."

Draft changes

The feds also claimed Saskatchewan's report considers an outdated draft version of the clean electricity regulations.

"This report is hard to take seriously," Guilbeault's office said in the statement. 

It said Saskatchewan's report fails to acknowledge the "significant additional flexibilities that we proposed and have been consulting on since earlier this year."

That consultation, said Guilbeault's office, is ongoing. 

The statement continued, saying the Saskatchewan's tribunal does not include the $40 billion "on the table from the federal government to help provinces build a cleaner grid," which was promised in the 2023 federal budget.

"[It] ignores the millions of dollars the federal government has already invested to upgrade Saskatchewan's grids," according to the federal statement.

That includes $74 million to develop small modular reactors, as well as $174 million to upgrade the E.B. Campbell Hydroelectric Station, roll out smart meters, upgrade Saskatchewan's grid infrastructure, and wind and solar projects across the province.