NDP questions gov't-ordered study showing negative impacts of carbon tax

The provincial government says a study it funded shows a federal carbon tax could reduce Saskatchewan's gross domestic product (GDP) by almost $16 billion by 2030.

The government commissioned the 300-page study from the University of Regina's Institute for Energy, Environment and Sustainable Communities through a request for proposals process.

The study, which has yet to be independently peer-reviewed, cost $109,000.

Gov't 'certainly pleased' with results 

Saskatchewan Environment Minister Dustin Duncan said the government was "certainly pleased" the study backed up its belief that a federally-imposed carbon tax would harm the province's economy.

The "computable general equilibrium (CGE) model" used in the study incorporated publicly available statistics from sources like Statistics Canada.

The model also took into account money from carbon taxes being returned to the provincial government for potential investment to help offset any economic impacts of the tax.

"It still does show a significant decrease in the GDP over the course from now to 2030," said Duncan.

NDP calls study 'an outlier'

Saskatchewan NDP leader Ryan Meili had not seen the full study as of Wednesday morning — the province was set to publicly release it later that day — but Meili said he was immediately skeptical based on the summary of the study's results.

"When you look at a report like this, especially one that comes out with a number that's so drastic and so distinct from every other study, this is really outlier," said Meili.

"And when you look at an outlier, you have to ask, what are the assumptions going into it, what were the opinions that led the science."

Meili also criticized the materials released thus far for not including a comparison between the federal carbon tax and Saskatchewan's own reduction emissions plans, called "Prairie Resilience," which is still under development. 

That concern was echoed by the federal Ministry Environment and Climate Change. 

"Unfortunately, Saskatchewan has provided very little public information about their model or assumptions, which makes it difficult to understand why their analysis of GDP impacts are so different than our findings," said Caroline Thériault, a press secretary with the ministry. 

The federal government did its own study on the effects of carbon tax on the country's GDP. 

"It clearly outlined that GDP growth remains strong with a nation-wide price on carbon pollution," said Thériault. "Real-world experience backs that up: last year the four provinces with a price on pollution — British Columbia, Alberta, Quebec and Ontario — led the country in economic growth."

Study projects $1.8-billion annual hit

The study's most conservative scenario shows a carbon tax of $50 per tonne would reduce provincial GDP by 2.43 per cent or $1.8 billion annually, the release said. 

The study also looked at potential impacts on the environment and says a federal carbon tax would reduce greenhouse gas (GHG) emissions by less than one megatonne, which is approximately 1.25 per cent of the province's total emissions and would result in a cost to GDP of $1, 890 per tonne, according to the government.