Sask. launches carbon tax challenge in court

Sask. launches carbon tax challenge in court

Sarah Mills
ckom.com
Sask. launches carbon tax challenge in court

Environment Minister Dustin Duncan, Premier Scott Moe and Justice Minister Don Morgan announce the court challenge against a federal carbon tax April 25, 2018. (Sarah Mills/980 CJME)

Saskatchewan’s fight against the federal carbon tax has advanced to the next round.

The government has launched a constitutional reference case in the Saskatchewan Court of Appeal to challenge the federal government’s ability to impose its tax on the province.

The government is asking the court to answer a clear question on the constitutionality of the legislation Ottawa has introduced to impose the The Greenhouse Gas Pollution Pricing Act. The carbon tax was introduced into Parliament on March 28, 2018 as Part 5 of Bill C-74.  The question before the court is, if enacted, will this act be unconstitutional in whole or in part?

“We do not believe the federal government has the constitutional right to impose the Trudeau carbon tax on Saskatchewan, against the wishes of the government and people of Saskatchewan,” Premier Scott Moe said.  “We have a made-in-Saskatchewan plan to reduce emissions and fight climate change, and that plan does not include a job-killing carbon tax on Saskatchewan families.”

Constitutional challenge over jurisdiction

Justice Minister Don Morgan said the government’s constitutional lawyers believe the federal carbon tax legislation can be successfully challenged because it imposes a carbon tax on some provinces but not others based on how each province has chosen to exercise its own legislative jurisdiction.

“This runs contrary to the principle of federalism, which is one of the bedrocks of our constitutional division of powers because it fails to respect the sovereignty and autonomy of the provinces with respect to matters under their jurisdiction,” Morgan said.  “Simply put, we do not believe the federal government has the right to impose a tax on one province but not others just because they don’t like our climate change plan.”

Under the constitution, each level of government is sovereign within its own legislative realm.  Provinces are not subsidiaries of the federal government.  Provincial governments have the authority to set policy in areas of provincial jurisdiction, and the federal government does not have the right to override that provincial authority.

Saskatchewan climate change strategy

The Government of Saskatchewan released Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy in December 2017.

The strategy includes the development of sector-specific output-based performance standards for large emitting facilities. Some of those standards involve: increasing efficiencies in buildings by adopting the 2015 National Building Code; creating a freight strategy to improve delivery times, reducing fuel and increasing efficiency; and developing a climate resiliency model to help ensure communities are able to adapt and mitigate against the effects of climate change.

“Our made-in-Saskatchewan climate change strategy is broader and bolder than a carbon tax,” Environment Minister Dustin Duncan said.

“Our plan to reduce emissions from the electricity sector by 40 per cent and methane emissions from the oil and gas sector by 40 to 45 per cent by 2030 shows we are serious about tackling climate change.  Our Saskatchewan story also includes our agriculture industry that sequesters nearly 12 million tonnes of CO2 annually and carbon capture at Boundary Dam 3 that has prevented two million tonnes of carbon dioxide from entering our atmosphere. Saskatchewan is the solution, not the problem.”

There have been some who have been critical of the Saskatchewan Party’s green plan, arguing that it chooses jobs over the environment and doesn’t prepare for any economic changes that may be brought about by a changing climate.

At one point, Saskatchewan’s former premier, Brad Wall, stood alone in his fight against carbon tax but the political climate has changed.

Manitoba is now holding off on introducing such a tax and is looking to launch a legal challenge of its own.

As well, looming elections in Ontario and Alberta may lead to a change in government and a change in the current political position on the carbon tax.

Petroleum producers support Alta., Sask. stance on oil fight

Petroleum producers support Alta., Sask. stance on oil fight

CJME News

Petroleum producers support Alta., Sask. stance on oil fight

The president of the Canadian Association of Petroleum Producers (CAPP) is frustrated the Alberta and Saskatchewan governments have had to resort to potentially blocking the flow of oil to B.C.

In an interview on Gormley Tuesday, CAPP president Tim McMillan maintained B.C. Premier John Hogan is holding Canada hostage as he faces pressure from the Green Party to block the Trans Mountain pipeline project.

McMillan applauds the stance the governments of Alberta and now Saskatchewan are prepared to take to pressure the B.C. government to allow the pipeline expansion to move ahead. But he also noted he hopes it doesn’t get to that point.

Alberta Premier Rachel Notley’s government introduced legislation on Monday that would give the province power to unilaterally reduce exports of oil and natural gas. Premier Scott Moe announced the Saskatchewan government would follow suit.

“We support very much the efforts of our Saskatchewan and Alberta premiers to force this question and force this issue,” McMillan commented.

McMillan said the industry already fights so hard to get market access and one of the tools they already use is to moderate the ability to ship oil to B.C.

“There’s some thoughtfulness to it, but it still is going to affect our industry and in the short term that’s going to hurt, but in the long-term that’s what we need is market access,” McMillan commented.

He said he hopes the issue with B.C. can be resolved before legislation to block oil is actually imposed.

Canada, provinces lack clear plan to adapt to climate change, auditors say

Canada, provinces lack clear plan to adapt to climate change, auditors say

Canadian Press

Canada, provinces lack clear plan to adapt to climate change, auditors say

OTTAWA — Neither Ottawa nor the provinces have really assessed the risks a changing climate poses to the country and have no real idea what might be needed to adapt to it, said a new audit released Tuesday.

The joint audit, conducted by federal environment commissioner Julie Gelfand and auditors general in nine provinces, looks at climate change planning and emissions reduction progress between November 2016 and March 2018.

It says while many governments have high-level goals to cut emissions, few have detailed plans to actually reach those goals, such as timelines, funding or expected results from specific actions.

The audit says assessments to adapt to the risks posed by climate change have been haphazard, inconsistent and lacking in detail, with no timeline for action and no funding.

The country’s emissions goals are also a hodgepodge of different targets, with no consistency in how emissions are measured or whether cuts will target overall greenhouse gas outputs or just those from specific economic sectors.

The auditors say that means there is no clarity on how Canada and the provinces and territories are going to measure, monitor and report on their contributions to meeting Canada’s international commitment to cut emissions by at least 30 per cent from 2005 levels by 2030.

As of 2015, the most recent year for which full statistics are available, Canada was nearly 200 million tonnes short of that goal, which is the equivalent of the emissions produced by about 44 million cars each year. That is twice the number of vehicles registered in Canada.

Environment Minister Catherine McKenna said it is the first time auditors have completed such a review of Canada’s climate change policies which is an important recognition of the priority climate change should have in government business. But she says the audit, as Gelfand herself notes, looks backwards and does not actually take into account the Pan-Canadian Framework on Clean Growth and Climate Change.

That plan was released in December 2016, after the audit’s scope was already established. It too falls short of reaching the 2030 goals however.

McKenna said the plan addresses many of the concerns in the audit, including outlining how certain policies will achieve specific emissions cuts.

“The previous government did nothing for a decade but we’re 100 per cent committed to our target,” McKenna said. “Hard things are hard, we have a plan and we’re already seeing measurable results.”

Catherine Abreu, executive director of the Climate Action Network, said this audit looks at what progress was made to meet Canada’s existing targets including the 2020 commitment, which Canada has abandoned knowing it has no hope of meeting it.

That target was to be 17 per cent below 2005 levels by 2020.

Abreu notes that is the third international emissions target Canada has set and will miss and the Gelfand report points out the 2030 plan is at risk if Canada and the provinces don’t step it up.

All provinces but Saskatchewan are currently signed on to the pan-Canadian framework, which requires every province to put a price on pollution by the start of next year. The four biggest provinces already have one, Manitoba will add a $25-a-tonne carbon tax in September and every other province will either have to establish their own price or have a federal price imposed as of next Jan. 1.

There are potentially rough waters ahead. Saskatchewan hasn’t joined the framework and says it will sue if the federal government tries to impose a carbon price. Ontario and Alberta both have a carbon price plan in place — cap and trade for Ontario and a carbon tax system with hard caps on emissions from the oil sands for Alberta — but coming provincial elections could bring to power premiers who are running on a promise to end carbon pricing.

McKenna said not only is the clean technology industry developing in response to climate change an enormous economic opportunity, not taking climate change action will cost the government money.

“It is disappointing when you have politicians pretending that there is no cost to climate change,” she said. “Right now the cost to the federal government is in the billions of dollars to deal with the impacts of climate change, whether it’s floods, whether it’s forest fires, a melting Arctic, we need to be taking action.”

 

Belaruskali Mine Accident Shows a Potash Market Nervous About Supply Shocks

Mine Accident Shows a Potash Market Nervous About Supply Shocks

By  Jen Skerritt  and  Aliaksandr Kudrytski

March 15, 2018, 10:00 PM CST

https://www.bloomberg.com/news/articles/2018-03-16/mine-accident-shows-a-potash-market-nervous-about-supply-shocks

 

The news, when it came late Friday night from a government ministry in Minsk, was grim: the ceiling of a potash mine in Belarus had collapsed more than half a kilometer underground, trapping two workers.

Halfway around the world, the reaction to the headlines was swift and dramatic. Shares of some of the largest potash producers soared in New York and Toronto on speculation that the accident could knock out a large chunk of global production capacity.

The March 9 episode vividly illustrates that after a decade of gluts, the industry is suddenly nervous again about supply shocks. Demand has been constantly increasing and any change in production from the world’s top suppliers in Canada, Belarus and Russia has the potential to impact the market dramatically, said Daniel Sherman, a senior analyst for Edward Jones in St. Louis.

“If a large mine in one of those suppliers is hit, it’s clearly going to put a dent in the supply,” Sherman said by telephone. “One of the key things is the supply is very concentrated.”

Potash Market Share

Belaruskali is the world’s second-largest producer

Potash marketshare March 2018

Source: Green Markets data compiled by Bloomberg Intelligence

State-owned Belaruskali is the world’s second-largest potash producer and is one of three companies, alongside with Russia’s Uralkali and North America’s Canpotex, that accounts for more than 60 percent of total output. The fertilizer ingredient is used to strengthen plant roots and boost drought resistance.

While Belaruskali insists there is no threat to production, the accident has shown how vulnerable the market is to disruptions at a time when demand is poised to rise: India and China are negotiating supply contracts, buyers are looking to purchase fertilizer ahead of spring in the Northern Hemisphere, and Canadian producers recently idled 1 million metric tons of output.

Mine Outages

Miners in Belarus and Russia are running at full capacity and “could not produce more” if they tried in the short term, said Jonas Oxgaard, analyst with Sanford C. Bernstein & Co. Any outages could allow for higher prices for Canpotex, a joint venture which markets sales outside of North America for Nutrien Ltd. and Mosaic Co.

The removal of one of Belaruskali’s mines would take out about 2.5 million tons, or roughly 4 percent of global production, Goldman Sachs analysts Adam Samuelson and Brooke Roach said in a March 9 report.

“If there’s an upset, you’re going to have a shortage somewhere,” said Sanford’s Oxgaard, adding that there hasn’t been a major outage from a potash mine in several years, and “we are basically due,” he said.

A supply squeeze could help potash prices to recover after years of ample inventories. It could also mean a rebound for fertilizer equities. U.S. producer Mosaic has climbed about 3 percent in 2018, but the shares are down more than 50 percent since the end of 2012 as a multi-year rout for crops cut farmer spending.

While outages are infrequent, they have caused supply shocks in the past. In 2006, Uralkali lost a mine after a sinkhole wider than 100 meters opened above the site. In 2014, a flood at Uralkali boosted prices at a time when companies were curbingoutput following the breakup of the company’s sales alliance with Belarus.

 

No Warning

In Belarus last week, the roof of the potash mine tunnel crashed down, with methane being discharged, Belaruskali Chief Executive Officer Ivan Golovaty said in a statement on the company’s website. While “such phenomena do occur in our Starobin potash deposit,” it was the first time an incident of such scale happened without any prior warning signs, he said.

Sudden outbursts of salt and gas in Belaruskali mines are caused by geological structures which have gas in their nucleus, contained under enormous pressure. Workers had no chance to react and escape and two people were caught by the falling rock and died “in a fraction of a second,” according to the statement.

Belaruskali Deputy CEO Anatoly Makhlai said company production is now stable and shipping is normal.

“There is absolutely no threat of us stopping production at this mine,” Makhlai said by phone from Soligorsk. “The mine has several directions, and the incident affected only one mine tunnel in one of the several mine sectors. Idling it is out of question, everything is working.”

Even so, the accident shows the risk associated with potash supply and could drive prices higher in the short term, Jacob Bout, an analyst at Canadian Imperial Bank of Commerce, said in a March 9 report. Canadian exports remain strong amid demand from Asia, and as prices tick higher, there’s a possibility the Chinese supply contract may top $250 a ton, up at least 9 percent from a year earlier, he said.

— With assistance by Megan Durisin

Joe Oliver: Yet more proof foreign radicals (yes, radicals) are sabotaging Canada’s economy

Joe Oliver: Yet more proof foreign radicals (yes, radicals) are sabotaging Canada’s economy

We’ve reached a crisis resulting from unrelenting opposition to pipeline construction, abetted by foreign funding and a federal government obsessed with green ideology

Special to Financial Post

Joe Oliver

March 13, 2018
9:08 AM EDT

pipeline protest
People recently gathered to protest the Trans Mountain pipeline expansion project at the Kinder Morgan tank farm in Burnaby, British Columbia.Courtney Pedroza/The Seattle Times via AP

 

The latest proof is in, although the facts have been obvious for many years. Foreigners are financing and organizing opposition in Canada to natural resource development, part of an anti-fossil-fuel campaign that is costing our economy an estimated $15 billion this year, due to lack of access to international markets, and much more in lost capital investments.

Perhaps the most recent little gem will finally get the chattering class to acknowledge reality: A leaked U.S. document preparing mass-action protests against Kinder Morgan’s Trans Mountain pipeline expansion project. It sets out goals and operating principles for a clandestine organization designed to drive political resistance under the guise of an independent rank-and-file protest movement.

“Action Hive Proposal” was written by Cam Fenton, an employee of 350.org, a California-based NGO “building a global grassroots climate movement.” Using insect analogies (theirs, not mine) the “Hive” contributes money, action and organizational experience and technical know-how, while a “Swarm” will generate mass action. Fenton is explicit about its “Purpose & Shared Goals: This group is coming together to support mass popular resistance to construction of the Kinder Morgan pipeline.”

This is not the only U.S. organization devoted to blocking development of Canada’s oil and gas reserves that, incidentally, would compete with America’s own resources. Vivian Krause, a Vancouver-based researcher and writer, has documented the money funnelled through Tides Foundation, New Venture Fund and the Oak Foundation to impede Canadian hydrocarbon growth, especially the oil sands.

These organizations are bolstered by a coterie of narcissistic celebrities whose vacuous certainty is outdone by their ignorance of science and economics and their extravagant carbon-intensive lifestyles.
 All this brings to mind when, as minister of natural resources, I wrote an open letter labelling certain environmental groups as “radicals,” financed in part by non-Canadian donors. The derisive outcry was deafening from media, opposition parties, ENGOs and even a few timorous senior executives in the oil and gas business.

I once challenged any environmental organization to name a single project it supported

I defined radical as opposition to every major resource project. Moreover, I issued a challenge to any environmental organization to name a single pipeline project that it supported. The silence was deafening. Possibly because my definition sounded too reasonable, the media never reported on my explanation of the definition or the challenge, which I reiterated numerous times.

What I said was factual then and has been conclusively proven to be true over the past six years. Trying to shut down fossil-fuel development is not viewed as radical to many environmentalists, even though the economic consequences would be disastrous. Or perhaps it was impolite in Canada to use the “r” word. It was obviously politically incorrect.

Irrespective of terminology, we have undoubtedly reached a crisis resulting from unrelenting opposition to pipeline construction, abetted by foreign funding and a federal government obsessed with green ideology.

It is telling that opponents are unimpressed by governments’ efforts to reduce greenhouse gas (GHG) emissions. They understand that Canada cannot make a meaningful difference to international emissions, since our output represents only 1.6 per cent of the global total. Their focus is on the oil sands, which they claim can measurably add to the global supply of oil, so keeping fossil fuels in the ground is their goal. The fact the oil sands only represent a minuscule one-thousandth of global emissions makes it the wrong target. But symbolism is everything.

Militants are indifferent to the terrible damage they are inflicting on our economy, First Nations and the poor, all without any measurable impact on global warming. Further, they assert that Canada has a moral responsibility to make costly but ineffective sacrifices, even though other countries are not doing their share.

The B.C. government’s campaign against the Trans Mountain pipeline expansion proves there is no point in succumbing to extortionate demands or making costly concessions to achieve an elusive social licence. The goal posts keep moving. By now, that must be evident even to Alberta Premier Rachel Notley and federal Natural Resource Minister Jim Carr, though they will never admit it.

At what point might Kinder Morgan headquarters in Houston cancel the project in frustration with its mounting financial and reputational risk? That would landlock Canada’s energy for a very long time, a disastrous result, which is the goal of opponents. It is time for Parliament to declare the pipeline a work “for the general advantage of Canada,” thereby removing most dilatory tactics (but not social resistance). Prime Minister Justin Trudeau should also tell foreign agitators to butt out of Canadian affairs.

Joe Oliver is a former minister of finance and of natural resources.

 

Foreign direct investment in Canada plunges to the lowest in eight years

Foreign direct investment in Canada plunges to the lowest in eight years

And for the first time in a decade foreign companies sold more Canadian businesses than they bought

Bloomberg News

Theophilos Argitis

March 1, 2018
11:08 AM EST

 

Foreign direct investment into Canada plunged last year to the lowest since 2010, hampered by an exodus of capital from the nation’s oil patch and worries about the fate of the North American Free Trade Agreement.

Direct investment dropped 26 per cent in 2017 to $33.8 billion, Statistics Canada reported Thursday in Ottawa. Capital flows dropped for a second year, and are down by more than half since 2015. The investment that did take place was from reinvested earnings of existing operations. Net foreign purchases of Canadian businesses turned negative for the first time in a decade, which means that foreign companies sold more Canadian businesses than they bought.

The shrinking investment underscores how the energy slump is lingering in a Canadian economy that last year also began to face the additional headwind of growing U.S. protectionism. It also marks a setback for Prime Minister Justin Trudeau’s Liberal government, which has emphasized attracting foreign companies.

Foreign Direct Investment FDI 2008 - 2017

Falling foreign direct investment is important. The country’s economy has relied heavily on foreign funding since the global recession — totalling more than $500 billion since 2008 and about $130 billion over the past two years alone, according to balance of payment data.

Unlike portfolio investment, foreign direct investment is considered a stable source of funding that comes with the additional benefits of a transfer of know-how. Instead, an increasing amount of Canada’s funding needs are being met by short-term funds denominated in foreign currencies — which makes the country more vulnerable to a sudden loss of interest from foreign investors.

ConocoPhillips and Royal Dutch Shell Plc are among the companies that led the exodus from the nation’s energy sector last year. The biggest foreign investment in Canada last year was the purchase by Hong Kong’s richest man, Li Ka-Shing, of Reliance Home Comfort, a water heater and air conditioner firm for $2.82 billion.

And the numbers continue to move in the wrong direction. According to Bloomberg data, foreign acquisitions of Canadian businesses fell to $3.8 billion in the fourth quarter, the lowest since 2009.

Saskatchewan’s mining sector meets the supply-chain face-to-face

10th Annual Saskatchewan Mining Supply Chain Forum

LinkedIn Item

CAPP Economic Report Series: A Global Vision for the Future of Canadian Oil and Natural Gas

CAPP Economic Report Series: A Global Vision for the Future of Canadian Oil and Natural Gas

drilloing pipe oil

I am pleased to provide you with a link to A Global Vision for the Future of Canadian Oil and Natural Gas, the first in a series of economic reports to be released by CAPP throughout 2018.

This report looks ahead at a carbon-constrained future in which Canadian oil and natural gas can thrive under the right conditions. It addresses significant issues facing industry today such as competitiveness, market access, climate and innovation, and benefits to all Canadians and our Indigenous peoples.

There is a place for Canadian oil and natural gas in the future global energy mix but only if industry and government work together to strike a balance between environmental stewardship, energy security, and prosperity for all Canadians.

The key issues addressed in our report include:

  • The Future Energy Mix – Canada’s role to help meet the future global energy demand as the world’s population grows to 9.8 billion people by 2050.  While renewable energy will play a larger role in the future energy mix, oil and natural gas will continue to account for 52 per cent of total energy demand.
  • Climate Leadership and Innovation – Innovation and the adoption of cost-effective clean technology will ensure the future of sustainable development of Canadian oil and natural gas.
  • Market Access – There is an opportunity to supply the world with Canadian oil and natural gas but without access to emerging markets, a streamlined regulatory system, and a competitive tax structure we risk losing capital to competing jurisdictions.
  • Benefits – All Canadians benefit from a healthy and robust oil and natural gas industry. In 2015 the energy sector contributed more than $160 billion to the country’s gross domestic product, and nationally created more than 640,000 jobs, and invested $3.3 billion in 396 Indigenous businesses in 66 communities.
  • Competitiveness – Competition for global capital investment is strong in other jurisdictions such as the United States, and competes with Canada for the same traditional markets. Although the U.S. is Canada’s largest customer, it has now become our largest competitor.

 

Canada is poised to become one of the world’s most sustainable energy suppliers at a time when environmental stewardship and responsible development are needed the most. In order for our oil and natural gas to be part of the global future energy mix, we must urgently address the challenges facing industry today.

To be balanced Alberta should have completely blocked BC wine from passing through it

do not pass go

To be balanced, Alberta should not have just blocked the sale of BC wines in Alberta; Alberta should have blocked all BC wine from passing through it to other provinces.

This would have stopped the flow of BC wine to the rest of Canada – a major market.

And, this should have been done on the grounds of, “Wine contributes to drunk driving, alcoholism, and the like.”

This is what BC is doing to Alberta and Saskatchewan.

By blocking pipelines, BC is stopping Albert and Saskatchewan oil from reaching major markets.

And by Alberta using the reason of “Wine contributes to drunk driving, alcoholism, and the like” – they would have a far better basis for the action.

Eric

SASKATCHEWAN PREMIER ANNOUNCES PST EXEMPTION ON AGRICULTURE, LIFE AND HEALTH INSURANCE

PREMIER ANNOUNCES PST EXEMPTION ON AGRICULTURE, LIFE AND HEALTH INSURANCE

Released on February 26, 2018

Government of Saskatchewan logo

Premier Scott Moe today fulfilled his commitment to reinstate the Provincial Sales Tax (PST) exemption for agriculture, life and health insurance premiums, effective today.

“Our government will help families and small businesses save money, invest and help our province grow,” Moe said.  “Part of that commitment is to exempt agriculture, life and health insurance from PST.”

The exemption covers agriculture, which includes crop, livestock and hail insurance premiums as well as individual and group life and health insurance premiums.  Health includes disability, accident and sickness insurance.

The exemption is retroactive to August 1, 2017, the date PST was applied to insurance.

The change has an impact of $65 million on revenue forecast for 2017-18 and a $120 million impact on revenue forecast for 2018-19.

Moe said the financial impact can be accommodated within the government’s three-year plan to balance the budget by 2019-20.

“Our fiscal plan remains on track, even with this reinstatement of the PST exemption on crop, life and health insurance,” Moe said.

The Ministry of Finance will work with the insurance industry to determine the best way to refund individuals and businesses that have paid PST on agriculture, life and health insurance premiums.  More information about how the refunds will be administered will be available by April 10.

-30-

For more information, contact:

Karen Hill
Executive Council
Regina
Phone: 306-787-2127
Email: karen.hill@gov.sk.ca

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