Saskatchewan Removed from Federal OBPS

Summary#

The Order Amending Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act (SOR/2023-148) removes Saskatchewan from the list of places where the federal industrial carbon-pricing rules apply. Practically, the federal Output-Based Pricing System (OBPS) no longer covers Saskatchewan’s electricity generation and natural gas transmission pipeline sectors as of January 1, 2023, and those sectors will instead be covered by Saskatchewan’s provincial OBPS program, which the federal government judged to meet the national benchmark for 2023–2030. The federal fuel charge still applies in Saskatchewan.

What it does#

• Deletes Saskatchewan from Part 2 of Schedule 1 to the Greenhouse Gas Pollution Pricing Act, so the federal OBPS does not apply to the province’s electricity generation and natural gas transmission pipeline sectors.
• Gives the change retroactive effect to January 1, 2023.
• Leaves the federal fuel charge in place for Saskatchewan; facilities that move under the provincial OBPS can apply for exemptions from the fuel charge for those facilities.
• Requires facilities to keep meeting federal OBPS obligations for periods up to December 31, 2022 (reporting and compensation for those earlier compliance periods), even after the change.

Who's affected#

• Owners/operators (referred to in the source as "persons responsible") of electricity generation and natural gas transmission pipeline facilities in Saskatchewan.
• Saskatchewan’s provincial government and its industrial OBPS administrators.
• The federal government departments that run the OBPS and manage fuel-charge exemptions.
• According to the government’s analysis, households and the broader economy could be indirectly affected through changes in industry costs, investment and employment, but those effects come from the difference between the federal and provincial programs rather than from the Order itself.
• The government estimates the Order removes some federal administrative burden estimated at about $63,490 in annualized average costs total (about $4,535 per facility for 14 mandatory participants) tied to federal OBPS reporting and related tasks.

Why it matters#

• It avoids "double pricing" on the same emissions sources. Without this change, those facilities could have faced both federal and provincial industrial carbon rules at once.
• For affected facilities, the provincial program is expected to lower some compliance costs compared with the federal OBPS, while also expanding coverage to certain methane sources (venting and leakage) that the federal OBPS did not price — the government’s modelling suggests this could mean more GHG reductions in some areas and lower direct costs for some firms.
• The change is retroactive to January 1, 2023, so it affects how compliance and reporting are treated for 2023 and later within the federal-provincial framework for 2023–2030.
• The federal fuel charge continues, so fuel prices subject to that charge are unchanged by this Order.