Saskatchewan says federal emissions cap, methane mandate would be “devastating

The Canadian province of Saskatchewan will suffer “devastating” economic damage if plans by the federal government to implement an oil and gas emissions cap and stiffer methane mandates move forward, the government said September 24.

The Independent Saskatchewan Economic Impact Assessment Tribunal found that oil and gas production in the province would fall by up to 52% by 2050, cumulative royalty and tax revenue losses would reach between C$4.8bn and C$7.1bn and total lost government revenues could climb as high as C$43.3bn.

Cumulative oil and gas sector investments, the tribunal found, could reach nearly C$46bn by 2050, with compliance costs to the industry hitting more than C$67bn. Saskatchewan is Canada’s second largest oil producer, behind Alberta, but produces only minor volumes of natural gas.

The tribunal was struck in November 2023, initially to study Ottawa’s proposed Clean Electricity Regulations, which it found would cost the province C$7.1bn. In April 2024, the provincial government asked the tribunal to look into Ottawa’s plans to impose an oil and gas emissions cap on producers and a federal mandate to reduce methane emissions by 75% by 2030.  

“The tribunal has, in several cases, relied on the same experts as the federal government and presented undeniable, quantitative data that these two federal mandates would be economically devastating to Saskatchewan,” Justice Minister and Attorney General Bronwyn Eyre said. “These mandates will lead to industrial winners and losers across the country and represent a sweeping constitutional overreach into the province’s exclusive jurisdiction over natural resources.” 

Eyre said the tribunal’s report would give it additional ammunition in the province’s expected constitutional challenge of both measures.

In addition to the direct production and government income impacts of the production cap and the emissions mandate, the tribunal also found Saskatchewan’s economy would contract by 4.3% by 2030 and by 6.4% by 2050, with a cumulative GDP impact of C$230bn by 2050. 

Employment losses by 2050, it said, would range from 12,800 to 34,000.

The two federal measures will not reduce global emissions, the tribunal’s report said, while production cuts in Canada would simply be back-filled by jurisdictions with weaker environmental standards.