Proposed changes to carbon pricing could save SaskPower $90M

A meeting between federal officials, electricity companies, experts and Environment and Climate Change Canada has brought about proposed changes to carbon pricing in Canada.

Ottawa previously proposed taxing all power plants the same way regardless of the type of fossil fuel they use to generate power.

The first 420 tonnes of CO2/GWh would be exempt while everything over the limit would be priced at $20 per tonne.

Environment and Climate Change Canada has proposed to adapt a new cap based on the fossil fuels used to generate electricity.

The proposed limits would be softer on coal and tighter on natural gas than the previous caps.

The new limit for coal would increase from 420 to 800 tonnes of CO2/GWh. Diesel would increase to 550 tonnes of CO2/GWh, with natural gas decreasing from 420 tonnes CO2/GWh to 370 tonnes.

According to Environment and Climate Change Canada the change would be more effective while the targets would be more attainable for provinces.

According to Environment and Climate Change Canada spokesperson Eric Campbell, there is a more effective measure.

"The most effective way to reduce pollution from coal-fired plants is to phase them out," Campbell said through email. "Our plan will phase out coal by 2030."

New plan could mean savings for SaskPower​

The change would significantly impact Saskatchewan, where 1,100 tonnes of CO2 is created by burning coal.

SaskPower had previously estimated the carbon tax on power production would cost $141 million. Should the new proposal be adopted, the Crown corporation would save roughly $90 million because it would only be taxed for 300 tonnes as opposed to 680 tonnes.

Saskatchewan environment minister Dustin Duncan said that although it's less of a cost, it's still a cost to the consumer. He said it's unnecessary and the province will continue to fight the soon-to-be imposed carbon tax.

"Rather than looking at somewhere in the neighbourhood of 900 to one billion dollars in just the next five years… it still could be in the range of $400 million that doesn't get absorbed by the company, it gets passed on to the consumer," Duncan said.

With files from Robert Jones and Adreanne Apablaza