CONTENTS
Standing Committee on Crown and Central Agencies
Bill No. 49 — The
Income Tax Amendment Act, 2026
Bill No. 50 — The
Financial Administration Amendment Act, 2026
Bill No. 51 — The
Corporation Capital Tax Amendment Act, 2026
Bill No. 53 — The
Saskatchewan Chemical Fertilizer Incentive Amendment Act, 2026
Lending and Investing
Activities
Saskatchewan Power
Corporation Vote 152
THIRTIETH
LEGISLATURE
of
the
Legislative Assembly of
Saskatchewan
STANDING
COMMITTEE ON
Hansard
Verbatim Report
No.
13 — Tuesday, April 21, 2026
Chair
C. Young: — Good afternoon, committee
members, and welcome to the Standing Committee on Crown and Central Agencies. I
understand it’s the discretion of the Chair whether or not folks are allowed to
take off their jackets. The temperatures are quite warm in here. We want to
make sure everybody is awake and alert, so is it the wish of the committee to
allow that?
Some
Hon. Members: — Agreed.
Chair
C. Young: — So if you feel the need
and you want to, you’re welcome to take your jackets off.
All right. Before we begin,
I’ll let you know who is here. I’m Colleen Young, and I will be chairing
meetings today for Crown and Central Agencies. And we have committee members Kevin Kasun
here, Don McBean,
Jordan McPhail.
In for Erika Ritchie
is Trent
Wotherspoon, and in for Doug Steele
is Alana Ross,
and member James
Thorsteinson is here.
Today we will be considering
the estimates and supplementary estimates no. 2 for Finance until 5:30
p.m. We will then be considering four bills. We will take a recess from 6:30 to
7, and afterwards we will consider the estimates for Saskatchewan Power
Corporation.
General Revenue Fund
Finance
Vote 18
Subvote (FI01)
Chair
C. Young: — We will begin with vote
18, Finance, central management and services, subvote (FI01). Mr. Reiter is
here with his officials. And I would ask officials, the first time you speak at
the mike, to say your names and your positions. Hansard, if you look up,
will turn on the mikes for you to speak. So, Minister, you can begin by
introducing your officials and provide us with your opening remarks.
Hon.
Jim Reiter: —
Thank you, Chair. I have with me my deputy minister, Max Hendricks; also ADM
[assistant deputy minister] Cullen Stewart and a number of other officials that
I’ll ask them to introduce themselves if they speak later tonight. And I will
now read some brief opening comments into the record before we go to questions.
I’d like to thank you and the
committee members for the opportunity to discuss the ’26‑27 budget for
the Ministry of Finance. The Ministry of Finance estimates, vote 18, begins on
page 55 of the Estimates book. Ministry of Finance’s budget expense for ’26‑27
is 494.55 million, an increase of $30.6 million, or 6.6 per cent,
from the ’25‑26 budget.
The ministry’s budget
includes the following increases: $11 million for the refundable portion
of the research and development tax credit program, 7 million increase for
the extension of the Saskatchewan secondary suite incentive program, $800,000
increase for the Saskatchewan class 1 truck driver training rebate program, and
$17.5 million increase for system-wide pension and benefit costs. There is
also 2.7 million for capital renovations on Cooper Place and to relocate
staff from the Public Service Commission.
I’d also like to take a
moment to elaborate on some of the highlights of the ’26‑27 budget. This
year’s budget focuses on the priority areas of health care and affordability.
It protects Saskatchewan families by lowering taxes to make life more
affordable and protects patients by investing in the patients-first health care
plan.
This budget also protects our
economy and jobs. It protects communities by hiring more police officers. It
protects vulnerable individuals, including our friends and family members
struggling with mental health and addictions challenges. It protects communities
from wildfires. It protects our education systems, students, and schools, and
it protects our agriculture sector — producers, farmers, and ranchers.
The ’26‑27 budget
provides approximately 2.5 billion in affordability measures for
Saskatchewan people. This includes building on commitments introduced last year
in The Saskatchewan Affordability Act by implementing the second year of
our four-year commitment to lowering income taxes for everyone. These personal
income tax cuts, combined with indexation, are providing about
$200 million in tax savings for Saskatchewan residents this year.
The personal, spousal,
equivalent to spouse, and child exemptions as well as the seniors’ supplement
will all increase by $500 each again this year, meaning a family of four making
$100,000 pays nearly $4,500 less in personal income tax than they did in 2007.
And the Saskatchewan low-income tax credit will be increased by another 5 per
cent, which is provided to about 300,000 households that have low incomes.
This year’s Ministry of
Finance budget also supports strong financial management and accountability,
helping ensure valued services, programs, and capital investments are
sustainable today and into the future. It builds on our commitment to help make
life more affordable, which includes incentives designed to make home ownership
more affordable, including the PST [provincial sales tax] rebate on new home
construction, the first-time homebuyers tax credit, the home renovation tax
credit, and extending the Saskatchewan secondary suite incentive grant program
for another year.
The secondary suite incentive
has seen over 1,000 new secondary suites being added since its inception in
2023. I was pleased to be able to extend this program by another year because
we know the most effective way to address the rising cost of rent is to
increase supply, and that’s exactly what the secondary suite incentive has been
doing.
The ’26‑27 budget
continues the Government of Saskatchewan’s focus on responsible fiscal
management with lower taxes and important investments in vital services while
managing our finances carefully and continuing to reduce costs where possible
so we can continue to deliver these services for years to come.
With that, we’d be pleased to
answer any questions.
Chair
C. Young: — Thank you, Minister. I’ll
open the floor to questions now, and I’ll recognize Mr. Wotherspoon.
Trent
Wotherspoon: —
Thank you. Thank you, Madam Chair, committee members, Minister, and certainly
to all the officials that have joined us here tonight and those that are
involved in the work under consideration here today. Certainly very thankful
for the great, strong team of public servants, those that serve in Finance.
Thank you for that.
I guess a question to the
minister off the hop. Did you provide direction or mandate to ministers on
targeted spending reduction? How much, and if so, how much was it per ministry?
Hon.
Jim Reiter: —
So normally sometime in June, a call for estimates goes out to individual
ministries. And they’re provided with the target they’re asked to meet, and
it’ll vary by ministries and by sector.
Trent
Wotherspoon: —
And did you provide direction or a mandate to ministries on that front?
Hon.
Jim Reiter: —
It’s an estimate goal that they’re asked to target.
Trent
Wotherspoon: —
What are the planned targets for FTE [full-time equivalent] reductions? Is that
3 per cent, I believe? And is that right across all ministries, and does that
also apply to the Crown corporations?
Hon.
Jim Reiter: —
Just for clarity, I think you’re talking about that target that I talked about
in the budget speech. Is that what you . . .
Trent
Wotherspoon: —
Right, yeah.
Hon.
Jim Reiter: —
But like based on attrition, that’s what you’re asking?
Trent
Wotherspoon: —
I believe so. Just wanting to know what specific mandate you’ve offered on this
front to ministries and to the Crowns, related to FTEs as well.
Hon.
Jim Reiter: —
Yeah. So the overall 3 per cent, which is salary dollars, the goal here is
there’s going to be no pink slips issued, right. This is going to be based on
attrition, having a more critical second look put when a position becomes
vacant, either through retirement or if somebody decides to go to a different
job.
And the targets vary by
ministry as well because this isn’t going to impact any front line. This won’t
do that. So some ministries will have a greater percentage of FTEs on the front
line. So those will be impacted less, whereas a ministry like Finance, there’s
less front line. They would be impacted to a larger degree.
Trent
Wotherspoon: —
Thank you. And just to clarify, does this apply to the Crowns as well? And
could you share what the current vacancy rate is within ministries and the
Crowns?
Hon. Jim Reiter: — So on
the Crowns, we don’t have the numbers for the Crowns. But to your question, the
intent is it will involve the Crowns as well, but that preliminary work is
still being done.
[16:15]
Trent
Wotherspoon: —
Do you have the vacancy rates on ministries and specifically your own Ministry
of Finance?
Hon.
Jim Reiter: —
I’ll just get our deputy minister to get into that for you.
Max Hendricks:
— So our vacancy rate for ’25‑26 compared to the budgeted FTE number. So
we had a budgeted FTE number of 439.4. At Q3 [third quarter] our forecasted FTE
usage was 417, which would mean that we were at about a 5 per cent vacancy
rate.
Trent
Wotherspoon: —
About 5 per cent in Finance specifically. And then what are the numbers for the
other ministries?
Hon.
Jim Reiter: —
Officials tell me we don’t have them for the other ministries. Public Service
Commission would have that.
Trent Wotherspoon: — I
understand at one point Finance had a specific program evaluation unit that was
rather robust and effective. What happened to it?
Max Hendricks:
— So several years ago there used to be basically a performance management
branch, office of performance planning and management, and they would review
. . . Each ministry would be required to prepare a performance
management plan and have it basically adjudicated by that Finance group.
The role of that area has
been changed significantly since I became deputy. Now we have an office called
the performance management and planning branch. And basically what they do is
they assist ministries in looking at their programs and evaluating their
programs to see if they’re delivering, oh things like value for money or
achieving the outcomes that are desired.
And we’re taking a voluntary
approach. We ask ministries if they would like our assistance, and so far the
experience has been quite positive. Ministries have been availing themselves of
their services. And so a bit different change in approach.
Trent
Wotherspoon: —
If you can speak to that, what’s the
cost and timelines on that new unit, that new process? And will the public also
be consulted?
Max Hendricks:
— So there are nine FTEs at various salaries. I can get the salary budget for
that specific area. At this point the public hasn’t been consulted, but that’s
not to say in the future that, you know, we won’t publish some reviews or
improvements that were made out of that unit. Already the Ministry of Finance
talks about, in our annual report, improvement projects and what we’re doing to
serve citizens better and that sort of thing. So that work is led through PMAP
[performance management and planning] as well. So you’d probably see it more in
the form of annual reports.
Trent
Wotherspoon: —
What are your anticipated savings from this initiative? And will the reviews
and evaluations be made public?
Max Hendricks:
— So as I said in my last response, I think that the primary place that you
would see the results of that work would be through improved service or avoided
costs. One of the things that the unit will do is working with ministries. They
agree to certain programs that we’ll be kind of taking a look at just to see if
they’re working as effectively and efficiently as possible and provide that
information through treasury board.
So it’s more of a budget
support tool at this point. It could evolve to where some of that information,
like I said, is specifically highlighted in an annual report or something, like
the number of reviews undertaken, the results, and such. But at this point it’s
still kind of evolving.
Trent Wotherspoon: — Thanks.
And that all applies . . . Well would that also be focused on
evaluating some of the economic growth-focused initiatives?
Max Hendricks:
— So in developing our budget, you know, I think we look at a few things
through the process, and we want to make sure that we’re utilizing our tax
dollars, our province’s tax dollars, as effectively and efficiently as
possible. So you know, one of the things . . . We obviously go
through the standard treasury board process where we evaluate expense, but we
also look significantly at the revenue side.
And so there are programs —
I’ll use an example — that are offered through Trade and Economic Development
or whatever, incentive programs. And I think that, you know, over time, we take
a look at those programs and see if they’re delivering the desired outcomes for
the, you know, tax or the revenue reduction that we see as the incentive is
paid out. And so things like that happen.
We also look at our programs
within the ministry to make sure that they’re delivering to the public as
effectively and efficiently as possible, and we assist other government
ministries in doing the same.
Trent
Wotherspoon: —
Moving along a little bit, now we know that some school projects, for example,
have had timelines extended in this budget, as a result of this budget, some
school construction, school capital projects. Can the minister explain exactly
how many capital projects will have their construction extended or delayed as a
result of this budget? And then just break out the various projects that have
been impacted.
Hon.
Jim Reiter: —
That question would be better put to SaskBuilds.
Trent
Wotherspoon: —
Do you have that information?
Hon.
Jim Reiter: —
I don’t.
Trent
Wotherspoon: —
Did you review that information? I guess there’s been some schools that were
delayed, for example, in places like Carlyle and here in Regina on the east
side, that were a consequence of the budget. Did you have that information
before you as Finance minister, as you were putting this budget to rest, just
to be aware of some of the delays that were going to be caused by the budget?
Hon.
Jim Reiter: —
Specific to the schools, the Minister of Education would be better asked that
question, and the capital projects overall come from SaskBuilds.
Trent
Wotherspoon: —
So they didn’t lay out, as part of the budget prep or treasury board, they
didn’t lay out the impacts that this budget was going to have on delaying
construction projects across the province, like schools?
Hon.
Jim Reiter: —
So Builds is given a recommended funding envelope by treasury board, and then
they do the detailed work on individual projects. So we see it at a high level.
Trent
Wotherspoon: —
And so at that high level . . . Yeah, that makes sense. It would be
surprising to me that Finance wouldn’t be sort of central to all these
decisions, that you wouldn’t have an assessment of the implications of the
budget on the capital side and what would capital projects would be impacted —
I guess in this case in a negative way, being delayed.
So at the high level, what
information did you receive on that front? Do you have any specific sectors you
could point to? Or any more detail on some of those projects?
Hon.
Jim Reiter: —
So every ministry has to make individual decisions in that ministry. Finance,
we absolutely can’t delve into every single project, every single issue. That’s
what the individual ministries are for. And on capital projects, that’s
SaskBuilds.
Trent
Wotherspoon: —
Were you aware that this budget that was brought forward would delay some of
these projects, like schools?
Hon.
Jim Reiter: —
Well that’s how you’re describing it. I’ve heard in question period the
Minister of Education describe it differently. So the question would be better
put to him.
Trent
Wotherspoon: —
Yeah, we can follow up. It’s not so much the debate in here that it
. . . I just hear it from the school boards who have communicated out
to some of the public that there’s been these extensions to these projects, and
delays. So that’s where the concern comes from.
Hon.
Jim Reiter: —
I’m sure each individual project is discussed with the school boards by
SaskBuilds, and I assume Ministry of Education as well. But we don’t have
details on the individual projects.
Trent
Wotherspoon: —
No. Thanks. Let’s look a little bit at debt-servicing costs. Like the debt,
it’s ballooned in the last number of years.
[16:30]
If we look even since 2018,
it’s more than doubled — $500‑and-some million for debt servicing. This budget
will in fact pay over $1.2 billion in debt-servicing costs. Again in a
very short period of time, more than doubled.
I mean straight off the top I
guess, is this a concern to the minister? This alarming growth of
debt-servicing costs? And again these are dollars that are going to service the
debt which in the end of the day aren’t able to be utilized for all the other priorities
of the people of the province.
Hon.
Jim Reiter: —
So there’s a number of things at play there, I would say. First of all as both
our population and our economy grows, more people need more services. It’s just
proportionate. And the GDP [gross domestic product] obviously alludes to the
opportunity and the ability to service that debt.
Trent
Wotherspoon: —
I guess just on that point I have a few more questions with respect to the debt
financing costs that have ballooned. And just sort of their trajectory, which
is of concern.
But with respect to the
actual credit rating agencies, of course we’ve got Moody’s, S&P Global, and
Morningstar DBRS that assess our credit. When are each of those assessing our
credit again and providing a statement?
Rod
Balkwill: —
Hi. Rod Balkwill, ADM of provincial treasury office. To your question regarding
rating agencies and have they completed any reviews or have any actions
pending. So they typically follow — unless things are in dire straits, and they
need to take immediate action — they typically do an annual review of every
province in person, and they’ll meet with officials.
So S&P Global, Moody’s,
and DBRS Morningstar are the three that meet with us in person. And those will
happen in May and June. And potentially there could be some assessments after
that, but we won’t know until we meet with them.
After the budget there is
commentary that’s presented by these rating agencies. And two of them — S&P
and Moody’s — did indicate that there was no imminent rating action. Both noted
rising leverage remains within an acceptable range, especially in comparison
with other provinces.
Trent
Wotherspoon: —
Thank you. And when would an assessment be made public out of that timeline
likely by the rating agency?
Rod Balkwill:
— So these are estimates but they all vary, and it depends on the timing of
their workloads. They have committees internal to each of those organizations
that meet and determine whether there’s going to be a rating action. But we
would expect that within four to six week that we would see either a
affirmation of the rating as it sits or a positive outlook, negative outlook of
a rating action.
Trent Wotherspoon: — So
we’ve got the 1.2 billion that’s going to just service the debt here this
year. Can you highlight if there’s additional debt servicing that’s not
captured in that number — P3 [public-private partnership] obligations, anything
within the Crowns, any other debt servicing that’s not captured in that number?
Max Hendricks:
— The 1.2 billion that you’re speaking to is made up of several
components. We have vote 12, which is Finance, and that’s our kind of general
GRF [General Revenue Fund] debt-servicing cost. That’s at $994 million.
The interest on P3s and other GRF financing activities is 52 million,
which brings the total GRF to 1.046 billion.
We have GRF interest paid to
other government entities of $50 million. And then pension liabilities,
there’s debt for that, which is 179 million.
In terms of other entities,
there are a number of entities that also pay interest and borrow through
Finance, but it’s not GRF funding. We just manage it for them in some cases.
And so things like the Saskatchewan Student Aid Fund that lends money to
students and then that’s repaid over time, and the Water Security Agency,
public employee benefits plan, that sort of thing.
So that’s how you get to the
total of 1.2 billion. And so the GRF debt is basically $1 billion.
Trent
Wotherspoon: —
You know, on the 1.219, is there additional debt that’s not captured there,
debt-servicing costs within the Crowns or other entities or other financing
structures?
Max Hendricks:
— Yeah, the Crowns handle it a bit differently. They offset debt against their
net income. And so, you know, I think you’ll recall from the technical
briefings we referred to it as taxpayer-supported debt and self-supported debt.
And so the Crowns have what we would call self-supporting debt, and they have
an additional amount. And their financing charges for this fiscal year:
559 million.
[16:45]
Trent
Wotherspoon: —
And what’s that number been over the last number of years? We’ve kind of seen
the trajectory here on the GRF on the Finance numbers that are reported out
here. Can you provide what that trajectory has been over the last five years,
and what you’ve got forecast for the next five?
Hon.
Jim Reiter: —
So the question on the Crowns would be better put to the CIC [Crown Investments
Corporation of Saskatchewan] minister, but our officials are endeavouring to
get those. We’ll try to have those for you tonight yet.
Trent
Wotherspoon: —
Thank you. But it’s fair to say that on the debt-servicing costs to include the
Crowns, you’d be adding that $559 million on top of the 1.219 if you’re
looking at adding . . . Those costs aren’t included.
Hon.
Jim Reiter: —
It’s always been considered self-supporting debt in government. So it’s been
accounted for the way Max described it.
Trent
Wotherspoon: —
Yeah. And you’ve committed you’ll be able to get the information though as far
as the past five?
Hon.
Jim Reiter: —
Folks are trying right now. So we’ll try and have that for you tonight if we
can.
Trent
Wotherspoon: —
Right. Just the point being that debt has to be manageable, sustainable. If
it’s growing in an unsustainable way, that has consequences for the public,
whether it be in a ratepayer or a taxpayer or the public.
I guess looking then just at
the debt-servicing costs that are recorded in the budget annually, we’ve talked
about that alarming concern when you’ve had 500‑and-some million to now
over 1.219 billion over since 2018. It’s a big increase.
Can you lay out what your
forecast is for debt-servicing costs over the next five years?
Hon.
Jim Reiter: —
Yeah, I’ll have that for you in a second. I would just say, though, those are
your words, “the alarming increase.” You know, you look at the bond rating
agencies. We had that discussion. We think it’s very manageable, and we’ll be
keeping an eye on it going forward.
So I think these numbers were
shared with you and your colleagues during the technical briefing on budget
day, but I’ll get Max to revisit those.
Trent
Wotherspoon: —
I appreciate that. Thanks.
And just a comment on that to
the tech briefing. We’re always told that any information we receive in there
we can’t reference it, that it’s confidential. So we always treat that as such.
So sometimes it’s important to follow up and have some of these matters as a
point of public record or something we can point to.
Max
Hendricks: —
So we talked about the 1.2 billion for ’26‑27. For ’27‑28
. . . And I’m just going to preface this by, this would include our
projections of new borrowing but also debt that’s coming due, so refinancing.
And that’s 1.34 billion in ’7‑8 and then 1.46 billion in ’28‑29
and then 1.545 billion in ’29‑30.
Trent
Wotherspoon: —
And do you have anything beyond that?
Max Hendricks:
— Pardon?
Trent
Wotherspoon: —
Do you have anything beyond that?
Max Hendricks:
— We don’t have anything beyond that with us. What’s interesting about that is,
because of our revenue growing, the actual percentage year over year is
actually declining as a percentage of our overall revenue.
Trent Wotherspoon: — With
respect to the actual debt itself, of course it’s grown in a really big way.
It’s over $43.5 billion by the end of this year. That’s what the forecast
has us at here right now. Now could the minister confirm what the net debt per
person is in the province right now? Am I correct that it’s the highest it’s
ever been in the history of our province?
Hon.
Jim Reiter: —
We’re trying to get some other information, but I didn’t have it available. But
the per capita is very simple. It would be the 43 billion you referred to
divided by the one and a quarter million and you get 34,400.
Trent
Wotherspoon: —
Am I correct to assess that that’s the highest it’s ever been in the province?
Hon. Jim Reiter: — I don’t
know offhand, but if you factor in inflation over the years I would assume that
that’s reasonable.
Trent
Wotherspoon: —
Yes, a significant growth in debt. Now if you’re just looking at the
. . . We had the numbers for the out years on debt-servicing costs. I
appreciate that you’ve shared those. Could you just detail what the total debt
forecast is for each of those years as well? So ’27‑28, ’28‑29, ’29‑30.
Hon.
Jim Reiter: —
Just so we don’t waste any time on you while they’re getting those numbers, Max
has the question you had asked earlier. So we’ll do that while they’re working
on this.
Max Hendricks:
— Yeah, so the Crown interest on their debt, the self-supported debt, is
385 million in ’21‑22; 389 million in ’22‑23;
426 million in ’23‑24; and 472 million in ’24‑25.
Trent Wotherspoon: — Thank
you for that information.
[17:00]
Rod Balkwill:
— Okay, in regards to the question regarding out-years debt levels, forecast
debt levels, we could give a total debt level but also mention that there’s
sinking funds, significant sinking funds, which are investments, high-grade
investments that are maintained to help repay debt when it comes due.
So for example in ’26‑27,
you’ve mentioned the 43.5 billion expected at the end of this fiscal year.
There’s a $4.2 billion sinking fund associated with that, available for
repayment. ’27‑28, 47.1 billion is the expected total gross debt
with an associated $4.8 billion sinking fund. Recall that sinking funds
are contributions made every year, so it grows by the contributions that the
government makes by formula plus the investment income in those funds.
’28‑29, expect total
debt, gross debt, to be 50.3 billion with a $5.1 billion sinking
fund. And ’29‑30, 53.2 billion total debt, gross debt, with a
$5.9 billion sinking fund. And that represents the total debt for Crowns,
GRF operating and GRF capital.
Trent
Wotherspoon: —
Okay. Thanks for that. I mean that’s a big increase again right, Mr. Minister,
53.5 billion that you’re planning to have debt at within just a few years.
My question though to those
forecasts, have those been affected at all by any . . . We hear about
big cost increases for some of the power generation projects at SaskPower. Are
there other capital projects that are beyond their budgets at this point that
will impact these forecasts, or are these forecasts still accurate numbers? Or
are some projects, are the costs coming in higher than expected, and will the
numbers be higher?
Hon.
Jim Reiter: —
So it includes the current year plus three years, including the full capital
plan for the Crowns.
Trent
Wotherspoon: —
There haven’t been any . . . Sorry, I just missed off the top. There
haven’t been any changes in the last number of weeks since this budget was put
to rest that have caused cost escalation or impacts on those forecast numbers?
Hon.
Jim Reiter: —
It’s all based on projections. So not to my knowledge.
Trent Wotherspoon: — You
haven’t had any . . . On the power gen side, costs haven’t been
higher on the capital side there reported back to you?
Hon.
Jim Reiter: —
Nothing that my officials or I are aware of. Those questions would be better
put to the CIC minister.
Trent
Wotherspoon: —
Well that guy’s tricky sometimes, but we’ll take the question over there.
Thanks for the response.
With
respect to the actual budget and borrowing program, I see here it’s noted that
there’ll be an additional 5.335 billion, which is certainly a significant
increase in borrowing from the ’25‑26 budget of just over 4 billion.
Now I understand that 1.7 billion is repayments or debt that’s rolling
over, and the remainder is 2.6 billion which is considered new debt. So a
couple questions here. But specifically, what markets do you expect to tap in
’26‑27 for that debt?
Rod Balkwill:
— You’re correct. The province started borrowing for this year actually pretty
quickly. We’ve got 5.3 billion to borrow in the markets and about 1.7 of
that, as you mentioned, is refinancing existing debt. The rest of it is new
debt for capital and some operating needs.
I’m probably talking more in
generalities in terms of where we’re going to access the funding. And I think
by that, you mean what currencies would we be borrowing in. And the province
has the ability to borrow, obviously in Canadian dollars and repay in Canadian
dollars, but also in all major currencies. Australian dollar, pound sterling,
euro, US [United States] dollar are all eligible for us to borrow in, and we
have in the past in US dollars, euros, and Swiss francs. So we expect that we
will be borrowing about 25 per cent of that 5.3 billion in those foreign
currencies.
And that was something we
started back in 2022 when we were borrowing purely in Canadian dollars. But we
found that expanding into foreign currencies just broadened the investor base
significantly, meaning more demand for the Saskatchewan bonds which lowers our
interest rates and also protects in times of turmoil. If markets were to close,
that you have many more access points to borrow.
And this year we’ve started
pretty early. We’ve done about 1.3 billion already with some of that
offshore in Swiss francs. But we do expect that 75 per cent will be in the
domestic Canadian market.
Yeah, and one final point.
It’s important to note that all of that foreign currency borrowing is hedged
through the derivative markets to ensure that the amount that’s owed back is in
Canadian dollars.
Trent Wotherspoon: — Okay,
thank you for that information. Could you break out a little bit of what the
anticipated structure of the debt is? How much of it will be short term, sort
of less than 5 years; medium term, 5 to 15; and long term, 15 plus, or however
you’d break out those different tranches?
Rod Balkwill:
— So in terms of the actual terms of the borrowing, it’s really market
dependent in terms of, you know, the actual end results. And so it’s hard to
say ahead of time, and we don’t disclose that ahead of time for market reasons.
But generally we do borrow
longer term, either 10 years and 30 years, the bulk of our borrowing. And
that’s because of the needs of the borrowing is to finance capital projects,
whether they’re in executive government or in the Crown corporations. So you
would expect to see probably most of it in 10 and 30 years, and a rough rule of
thumb could be 50 per cent in 30 years, 50 per cent in 10 years.
[17:15]
The other benefit of that is
it does give us cost certainty. It’s a risk management tool to lock in interest
rates for a long period of time so we have good visibility of what we’re
dealing with in terms of budgeting and also protect against any kind of refinancing
risk if the markets were to be disrupted and you couldn’t borrow. I think
that’s about it on that. Thanks.
Trent
Wotherspoon: —
Thanks. And are you able to share at this time what the average interest rate
that you’re planning to use as far as your assumption on new debt for both the
GRF and the Crowns?
Rod Balkwill:
— The rate we’re using for new borrowings, the interest rate on any new
borrowings — so the 5.3 billion — we expect that most of that would be
borrowed at about 4.5 per cent. So that would be the average rate of a 10‑year
and a 30‑year bond issuance. Currently those rates are pretty close to
that at the moment.
There is some short-term debt
that we do borrow for one year or less just for cash management purposes. It’s
under 5 per cent of the total debt outstanding, and we expect that to be at two
and a half per cent.
Trent
Wotherspoon: —
Okay, thanks for that information. And what’s the current effective interest
rate on outstanding debt right now? Am I correct that it was 3.5 per cent for
2025? Maybe just, yeah, whatever the numbers are.
Rod
Balkwill: —
A clarification, if I could. Do you mean the book value of the debt, the
interest rate that the existing debt, we’re paying on that?
Trent
Wotherspoon: —
That’s right.
Rod
Balkwill: —
It’s not a market rate of it but . . .
Trent
Wotherspoon: —
No, the rate right now that we’re paying on the debt that we hold.
Rod Balkwill: — Thank you.
Okay. So the average interest
rate on the debt on the books at the moment — including Crown corporations, so
on the 43.5 billion — is 3.463 per cent.
Trent
Wotherspoon: —
And that’s up about, what, 0.1 per cent from last year or the year prior. Is
that correct?
Rod
Balkwill: —
We’re showing that the average interest rate is down very small from last year.
So it was 3.474.
Trent
Wotherspoon: —
Okay. And most of the new debt we’re taking on is probably going to be around
that 4.5 per cent, that rate. Of course that will get worked in through time
with our . . . A one percentage change in the total debt is
. . . I believe you’ve got it reported in the budget even there.
Is
that a $40 million impact or something like that? Can you just clarify or
confirm that number?
Rod Balkwill: — We’ll get that for you.
You mentioned the
sensitivities for a 1 per cent increase in interest rate, so I’ll just clarify.
So if interest rates were to increase on April 1st of the fiscal year by one
full percentage point, the impact on the new debt that we’re borrowing would increase
interest costs by $40 million in the current year.
Trent
Wotherspoon: —
I see. On the new debt, right?
Rod Balkwill:
— Correct.
Trent
Wotherspoon: —
Okay. Thanks for that information as well. Maybe just shifting gears a little
bit. Obviously, I mean debt’s a concern. We’ve talked about it. I don’t need to
. . . I mean we’ve got up over 53 billion is where the debt’s
headed here from this forecast in just the next few years and the
debt-servicing costs growing in a significant way as well. But I want to move
on to some of the other areas here.
I guess, looking at some of
the revenue items, looking at . . . I mean obviously we’ve had this
awful conflict in the Middle East. It’s had a real quick and significant impact
fiscally on our province and provinces and countries around the world. But
certainly for us it’s in our oil prices, up right now, for this period of time
with the Strait of Hormuz and the lack of flow of oil. And then you see on the
household side and for farms, big increases obviously to fertilizer and gas on
those fronts.
But
focusing on the revenue side, of course WTI [West Texas Intermediate] was
forecast at $59 I believe in this budget, and we’ve debated these matters here
over the years. And I think it’s important to be prudent and cautious in a
number, because that’s your foundation in your budget. That being said, we’ve
had this extraordinary situation occur. I’m interested in what you’ve got
forecast for the first fiscal month here of additional revenues for the month
as a result of the price of oil.
Hon.
Jim Reiter: —
So to your point, as you laid out sort of the geopolitical situation, as you
know, WTI is so volatile. If memory serves correct, I think shortly after
question period today I checked, and I think it was about 95, $96 a barrel. And
then later this afternoon they announced an extension of the ceasefire, and I
just looked right now and it’s showing just over $90 — $90.36. So it’s very
volatile.
And to answer your question
about for the first month . . . And we’re not through the first month
yet, right? I mean we still got a week and a half to go. And our officials
generally sort of try to reconcile that on a quarterly basis. So the short
answer to your question, we recognize the volatility. It’s significantly higher
than we had budgeted, but we don’t have an estimate. We don’t try to reconcile
it every day or anything. It’s done by quarter, so we don’t have that number
for you for April.
Trent
Wotherspoon: —
So you have no modelling? I mean, we sort of see . . . What’s the
average of WTI been so far this month? It’s been up, kind of sustained over the
$90 mark anyway, so $30 or so over budget. I mean we can kind of break down the
math. We know what that would mean for the annual. So I suspect your officials
are tracking this. Not to suggest that the price is going to sustain at this
price all of this year.
[17:30]
I think the current
situation, the past number of years have caused us to know that there’s a whole
lot that we can’t predict, but we do know what the oil price has been each of
these days so far through April.
Hon.
Jim Reiter: —
So as you know, the dollar amount they have pegged for revenue is
$16 million for every dollar of WTI. But again you can see . . .
I mean you can do the rough math, but it’s been so volatile. It’s changing
frequently during the day, let alone by the week or the month. We’re three
weeks into the fiscal year; it would impossible to ask officials to have an
updated balance.
Trent
Wotherspoon: —
But I suspect they’re tracking sort of, you know, some of what this looks like.
And I know you’ve got an exceptional team on that front. Certainly it’s up
significantly this month, and then we know what the impact has been of course
for families and for farms and for businesses. I mean that gas price has been
real challenging.
And then on the farm front of
course, you couple in the fertilizer price on top of the gas price — both that
have gone sky-high as a result of this conflict. It’s certainly creating a lot
of pressure for households and farms and businesses.
We’ve
long been consistent in speaking out against the inequity, the unfairness of
equalization for this province. And you know, the case is a little different,
but for other Western provinces as well. But particularly this province. I’m
interested in what undertakings you’ve taken in the last year and what you’ve
planned to do in the current year ahead of us to make the case to fix
equalization in a way that represents fairness for the province of
Saskatchewan.
Hon.
Jim Reiter: —
So you know, obviously we have concerns about equalization and the way it’s
handled in this country. I think it’s simply . . . I mean you can
just look next door at Manitoba. You know, roughly the same size, lots of
comparabilities . We get no equalization; they get I think it’s like
$5 billion right now. So you can see, in my view, the inequity in that.
So there’s a couple things
that have been or will be happening. Later this year, it’s a regular review, I
understand, the federal Finance ministers do of federal transfers. And I’ll
obviously be raising the issue of equalization at that. But probably more
current and potentially more impactful is Newfoundland is challenging
equalization. I’m sure you’re aware of that. Saskatchewan has intervener status
at that and is supporting Newfoundland in their challenge.
Trent
Wotherspoon: —
Yeah, it’s a critically important file to the people of the province. And it’s
an inequity and an unfairness that we face, and it shorts the people of this
province who have a heavier burden than those in other jurisdictions. So it’s
one that we have to be really, you know, consistent with. And I think that the
province really needs to lead the way. And the relationship with other
provinces on this front in leading that discussion with the federal government
and at those federal-provincial tables.
I’m interested around the
Trans Mountain project and pipeline capacity. Obviously it’s always in our
interest to make sure we have strong markets, competitive markets for energy,
for oil. We know that Trans Mountain project opened up some market, the movement
of more product which is positive for this province.
Could you speak to what the
impact has been on the differential between WTI, WCS [Western Canadian Select],
and any other way that you’ve measured improvements that have been brought and
what sort of fiscal impacts that looks like for the province of Saskatchewan?
Hon.
Jim Reiter: —
You know, if I could before I get into that, I was just going to say, Mr.
Wotherspoon, we were talking about the volatility of WTI. I just looked again
and in the time we were talking it had jumped around about another $3. Like
it’s just incredibly volatile.
Trent
Wotherspoon: —
Faster than the Bruins in a third period.
Hon.
Jim Reiter: —
You should check the score. I think they’ve dropped the puck already.
So since Trans Mountain — so
it would be early ’24, correct? — the differential at that time between WTI and
Western Canadian Select was about 20 to 30 per cent. And right now it’s about
12 to 15. So you can see the impact that’s had. So that’s obviously good. The
smaller that differential, the better it is for us.
Trent
Wotherspoon: —
Yeah. No, it’s obviously important to reduce that discount, tighten that
spread, and get the best return we can for the people of the province on our
energy. Do you have an annual fiscal impact number you could share on that
front beyond the percentages? What does that mean in revenues?
Cullen Stewart:
— Thanks for the question. Cullen Stewart, assistant deputy minister, fiscal
policy division. So in the ’26‑27 budget, the tighter the differential by
each percentage point would be an additional about $10 million in oil
royalty revenue.
Trent
Wotherspoon: —
One per cent in the . . .
Cullen Stewart:
— One per cent tighter, yeah, gets an additional $10 million
approximately.
Trent
Wotherspoon: —
Gotcha. So if that differential was closed entirely . . . Right now
12 per cent, so you’re saying that’d be about $120 million?
Cullen Stewart:
— Approximately, yes.
Trent
Wotherspoon: —
Thanks for that information. The Sask revenue agency, of course we’ve expressed
a high level of frustration with kind of this focus of your government to build
a more redundant tax system that requires businesses and farms to file twice
and drive up the cost of tax filing if we went down that path.
Last
year I asked you this question. I’ve called on your government to scrap this
idea for a long time. Last year I asked you where this was at, and you couldn’t
rule out moving forward on this front. Where are you at on that project now?
Hon.
Jim Reiter: —
I was just checking with officials to make sure there wasn’t some work being
done I wasn’t aware of. But it hasn’t been a priority. Actually the last
discussion I had on this topic was last year with you in estimates.
Trent
Wotherspoon: —
All right. Well I think you should put that baby to rest. It was a bad idea
from the get-go, and it pulls resources away from what’s needed. Any time
that’s being spent on that idea is, you know, dollars and time that’s not being
spent on priorities for the people of the province. And you know, the business
community and the farm community has been so clear on it. They’re just not
into, you know, a more redundant tax system with a second set of filing and
additional costs.
Like, man, right now all the
pressures businesses and farms are facing, I just think you should make a very
clear commitment that that’s done and there’s not going to be another dollar
wasted in consideration and we’re not going to leave that lingering question
for the business and farming community. Would you care to make that commitment
today or could you make that commitment?
Hon.
Jim Reiter: —
I will note your opinion.
Trent
Wotherspoon: —
Okay. Moving along here. We’ve talked about the fact that revenues are up in
this quick way, right, because of this conflict. And of course there’s
volatility there; we don’t know what the future holds. At the same time of
course for households and farms and businesses it’s been, you know, gas prices
that have been sent soaring, fertilizer prices for farms. And so we’ve said
that while these revenues are coming in in an unplanned and significant way,
there needs to be some of those revenues used to suspend the fuel tax, give a
break on that front.
I guess my question to you,
is there some active consideration? I know we’ve pushed each day in this
legislature. We’ve put the public push, and we’ll continue to. But my question
to the minister is, is there some active consideration of providing gas tax
relief?
Hon.
Jim Reiter: —
Our focus has been — as we debate this every day in question period — our focus
has been not on temporary relief, it’s been on permanent, longer term. You’ve
heard me say it many times. It’s been on a number of suite of incentives, but
mostly on income tax, letting people keep more of their own tax dollars to
begin with.
[17:45]
On the tax front, you can see
we just spoke earlier about the volatility of it. It’s fluctuating wildly and
as you referred to it, the extra revenue — or as you’ve referred to it in
question period, the windfall — that $16 million per barrel is only there
if it stays at that level for an entire year. And I mean, just was going to say
over the last three weeks is that it fluctuated wildly. I mean, it fluctuated
wildly today. It’s impossible to get a read on that. So we focus more on
letting people keep more of their own money to begin with.
Trent
Wotherspoon: —
Yeah, I would just say that this is an extraordinary situation. And the
hardship, the pressures that households and farms, businesses are facing are
real and it’s a real big escalation in there in their costs. And then you’ll
certainly, what we would be . . . You know, we know that in this last
month here we’re not talking about something permanent, you know, that creates
a long-lasting budget consequence. We’re talking about passing along some of
those additional dollars to provide a break at a time where families could
really use it.
And if you look at like
. . . We’re the highest in the nation on mortgage delinquency, got
some really troubling numbers at the household level around bankruptcy within
the province. We have the highest level of financial anxiety reported at the
household level of anywhere in the country. So it’s just, you know, adding
these additional costs on to that situation that was already so strained ends
up having a real serious financial impact at the household level.
And actually if we go further
in that direction where households aren’t able to make ends meet, and you’ve
got mortgages that are not able to be obligated to, if you’ve got bankruptcy,
there’s significant cost impacts for the province as well and for us economically.
So we continue to urge action.
One thing I just want to make
sure. We’ve been clear, of course that we would like to see action around gas
and diesel and of course marked fuel to assist a bit on the farm front.
But something that I want to
just make clear as well, is the minister aware that it’s a fairly small revenue
component within the gas tax or the fuel tax of the province. It’s the propane
component, and that’s specifically the motor fuel tax. And it’s utilized — it’s
called propane motor fuel tax — but it’s actually utilized as backup power
generation in a lot of rural farms, homes, and also hospitals and some other
environments like that. It’s there as well in the power gen backup side for oil
batteries, as an example.
And what I’ve learned is that
we’re — I think the highest? — tied to be the highest tax rate on that propane
motor fuel tax. And we also are the only province to have a very convoluted
sort of rebate structure on that.
I guess could the minister
speak to how much revenue is collected on this front? I think the tax rate now
is 9 per cent, again pretty much the highest in the country. And is he looking
to make a change on this front? It seems to be out of line with the rest of the
country in causing cost impacts for rural community members and industry.
Hon.
Jim Reiter: —
So the revenue for that’s approximately $6 million a year. And you’re
right on the 9 per cent. Alberta’s is higher; it’s 9.4, I’m told. But the rest
are generally lower than that. But to get to the point of your question, we
review all those sorts of things every year in the budget cycle. And as cliché
as this sounds, the next budget cycle’s going to be starting right away. So
it’ll be reviewed.
Trent
Wotherspoon: —
I just identified, I know it’s a much
smaller revenue item, but the impact’s pretty significant for farms and
businesses and infrastructure that may not have other options, right. And so I
think, you know, certainly I want to make sure my call is inclusive. When we’re
talking about some corresponding suspension of the fuel tax, certainly we’d
need to make sure that it was also suspended to pass along some savings.
I’ll move along a little bit
here. There was changes to corporate capital tax related to Crown corporations
in this budget. Well I guess we’ll have legislation in a minute here. If those
changes weren’t made, what would have been the impact? How much larger would
have the deficit been?
Hon.
Jim Reiter: —
It would have been a wash because of the summaries. So it saves the Crown. But
again, it’s neutral to the deficit. And you’ll be seeing the bill to do that is
on deck for tonight yet as well.
Trent
Wotherspoon: —
Right. You bet. With respect to the PST that’s collected, it’s of course been
added by your government to a whole bunch of goods and services that it wasn’t
on in the past, that were previously exempt. You see the increase in the PST
revenues on that front in a significant way.
But just looking at one
component of that. What’s the PST amount that’s applied to municipal
construction and labour? What’s collected last year? What’s forecast this year?
Again, this has been a real
point of frustration because it’s taxing another level of government, passing
that back to property taxpayers by way of higher property taxes in allowing
that tax dollar to go less far in building out some of the infrastructure that
our municipalities critically need, both urban and rural.
Hon.
Jim Reiter: —
Well we’ll get those numbers for you in just a second here, but I just have to
address your preface to that question. I get this is politics, and you’re going
to make your point. But I don’t agree with the way you portrayed that as
expanding it to a whole . . . whatever verbiage you used.
But any changes to the PST in
that regard happened a long time ago. And we’ll get to the answer in a second
on the dollar amount on PST on municipal construction. But you’re also going to
hear my point of view on municipal revenue sharing at that point.
Trent
Wotherspoon: —
Well no, let’s stay . . . We only have a little bit of time here, so
let’s just answer the questions. And as far the actual PST, I mean the changes
were made in 2017, Minister. You were here as a minister, not Finance at the
time. And the impact. I mean you ended up having it stuck as a government on
construction labour, on restaurants, kids clothes . . .
Hon.
Jim Reiter: —
And I stand . . .
Trent
Wotherspoon: —
On you know, some basic grocery items,
on insurance, on used cars the year after. And collecting now over
$3 billion. And that’s each and every year out of the pockets of the
people of the province. So we can get into a debate, but I’d prefer an answer
to the question on how much is collected off the municipal sector in this very
inappropriate way.
Hon.
Jim Reiter: —
And you’d get an answer quicker if your questions didn’t take so long. So to
your point, my point I was making to you is you made it sound like there was
recently a huge amount of changes to PST. That’s not the case, as you know. I
stand by those decisions we made at the time.
We need revenue to do all
those other things that you address. You talk about health care and social
services and highways and education. Revenue has to come from somewhere for
those, so government has to get tax revenue somewhere. And I will get back in
just a minute on the numbers for the PST on municipal construction.
So officials are telling me
that they don’t have that breakdown because what happens on a
company-by-company sector is they do that and they remit it. They don’t report
that this was for private, this was for a municipality, this was for
provincial. They don’t do it that way. But again to the point, and you know
this full well, that on the PST municipalities get three-quarters of one point
PST back in revenue sharing.
There is no other province
that has that kind of a deal for municipalities. I come from that municipal
sector. And I was Government Relations minister, I don’t know, shortly after
that was implemented, and I literally had ministers from other provinces saying,
what are you guys doing? Now we’re getting pressure to do that same kind of
deal. People I know in the municipal sector are very happy with that.
Trent
Wotherspoon: —
Yeah, I remember. I mean I was a part of that as well, and it was an important
measure to have that there for operations. It was never supposed to be intended
for kind of the capital projects, but certainly municipal revenue sharing is
something that’s important. I would note that it used to be 1 per cent; it’s
now been walked back a number of years ago and it’s less than that now.
And I would identify as well
that in that period — and we don’t have to go debate the last number of years —
but just to point to the financial pressures that municipalities are facing,
and then the tax increases that people and businesses are facing . . .
There was the grants-in-lieu that were ripped up, right, shorted municipalities
of those dollars. And then the PST was then imposed, 6 per cent on top of
needed construction project and work across municipalities. So I certainly, you
know, recognize that our municipalities are in a tight fiscal situation and
it’s households and businesses that are seeing some pretty big tax increases as
a result.
I’d like to move along just a
bit. Do you have PST numbers for the other areas that we identified where the
expansion of the PST occurred? Onto kids’ clothes; restaurant; some of the
groceries; insurance; the construction, the broad global number on construction
labour, then, if you don’t have it broken out for municipalities; used cars. If
we can get an update on what’s budgeted in each of those areas for the current
fiscal year.
Hon.
Jim Reiter: —
While that’s being looked on, I would just again agree to disagree on the way
you described that situation. I just, I couldn’t agree more. Like you talking
about walking it back. The reason that was done was because the base of the PST
was expanded. It wasn’t a financial walk-back by any stretch. So obviously you
can portray those things the way you want, but I just want it on record that I
disagree with the way you describe that.
So the very minute detail
you’re talking about, officials tell me we don’t have that. The revenue
estimates by sector on PST, it’s broader than that. The sectors they use, for
example, are agriculture; cannabis; communications; construction; food and restaurants;
health; insurance; machinery and equipment; manufacturing; mining; motor
recreation vehicle; oil and gas; retail, which much of what you’re asking about
would fall under, I assume; services; transportation; utility.
[18:00]
Trent
Wotherspoon: —
And there’s no ability to get us that information, to break it out and provide
it outside of this committee?
Hon.
Jim Reiter: —
Sorry, which specifically?
Trent
Wotherspoon: —
Like specifically like the insurance and children’s clothes and restaurants,
used cars.
Hon.
Jim Reiter: —
Yeah, so I can’t commit to that. I don’t know if they’re going to be able to do
that. When retail remits, they don’t remit based on that minute sort of detail
on what type of product it was.
Trent
Wotherspoon: —
Okay. Well if there’s a way that your team can look at those numbers and to
break that out and supply that, that’s good. It’d certainly be . . .
Hon.
Jim Reiter: —
I’ll ask them to look at that.
Trent Wotherspoon: — Thanks.
Thanks very much. Moving along a little bit, just with respect to the state of
the industrial carbon tax structure your government had organized. And you
know, there’s still in this budget, I believe on page 74 . . .
records a $384.5 million contribution to the SMR [small modular reactor]
fund for ’25‑26. No ’26‑27 contribution. I guess my question is,
was there real cash in that, or is that some sort of another accounting entry
or some sort of contingent liability? Help me understand what’s happening
there.
Cullen
Stewart: —
So to address your question with regard to ’25‑26, the Small Modular
Reactor Investment Fund had an opening balance at the beginning of the ’25‑26
fiscal year of 580.9 million, and it closed the year at 909 million.
So that’s the opening balance obviously for ’26‑27 as well. And the
forecast for ’26‑27 is for that to go to 932 million by the end of
the ’26‑27 fiscal year.
So that would be investment
income retained in the small modular reactor fund, but no new contributions
from OBPS [output-based performance standards] payments from the electricity
sector in ’26‑27.
Trent
Wotherspoon: —
Thanks for that. With that, the 384.5 million and then the contribution
from last year that was recorded and also the total then the $909 million,
that represents real cash?
Cullen
Stewart: —
That’s the closing balance in ’25‑26 is, yeah, the size of the fund,
yeah.
Trent
Wotherspoon: —
And is there any contingent liabilities associated with that? That’s been fully
funded? Those dollars are there?
Cullen Stewart: — With respect to your question, there
is a small accounts receivable still outstanding that we anticipate to collect
in the first quarter, and that will be then all reflected in Public Accounts
when it’s released for ’25‑26 near the end of June or early July.
Trent Wotherspoon: — I just have about 10 more questions
here.
Chair
C. Young: — Not happening. Having
reached our agreed-upon time for consideration of these estimates we will now
adjourn consideration of the estimates and supplementary estimates no. 2
for Finance. Minister, do you have any closing remarks you want to make at this
point in time?
Hon.
Jim Reiter: —
I would just thank you, Chair, and I would thank all the staff and the
committee members. I thank Mr. Wotherspoon for the respectful questioning
tonight. And I would like to thank all the Finance officials for their good
work not just tonight, but through the entire budget process.
Chair
C. Young: — Mr. Wotherspoon, do you
have any closing remarks on this portion?
Trent
Wotherspoon: —
Thanks, Madam Chair, committee members. Certainly thanks to the minister for
time here tonight and undertaking to maybe get us some other information as
well on a couple of those fronts. But thanks to the officials that have joined
you here today and all those officials that are involved in this work. I think
the Finance team of public servants is second to none, and to all of you I say
thank you.
Chair
C. Young: — We are to take a short
recess. Are we switching out ministry folks for the bills?
Hon.
Jim Reiter: —
Can we just take five?
Chair
C. Young: — Yes. So we’ll shorten
that to five minutes just to switch out a few and then we can proceed with the
bills.
[The
committee recessed for a period of time.]
Bill No. 49 — The
Income Tax Amendment Act, 2026
Clause 1
Chair
C. Young: — All right. Welcome back,
everyone. We will now move to consideration of Bill 49, The Income Tax
Amendment Act, 2026 beginning with consideration of clause 1, short title.
Minister Reiter is here with his officials. And you can introduce them if you
choose to and make opening remarks.
Hon.
Jim Reiter: —
Thank you, Chair. I have the same officials with me, so I’ll just proceed. Some
brief opening comments and I’ll go to questions.
[18:15]
These amendments to The
Income Tax Amendment Act will support the new initiatives that were
announced in our ’26‑27 provincial budget. Changes reflect our
government’s continued focus on making life more affordable and supporting
economic growth. They also ensure that our tax system remains efficient, clear,
and aligned with the Canada Revenue Agency administrative requirements.
Amendments also include that
the volunteer first responders tax credit will be doubled from 3,000 to $6,000
effective January 1st, 2026. As a result, the maximum annual income tax benefit
will increase from 315 to $630. These personal income tax credits are available
to volunteer firefighters, volunteer search and rescue personnel, and volunteer
emergency medical first responders. Over 4,000 volunteers in Saskatchewan claim
these tax credits every year.
Also included is a five-year
extension to companies eligible for the Saskatchewan chemical fertilizer
incentive that receive conditional approval by December 31st, ’26 to meet the
minimum $10 million capital investment threshold by December 31st, 2031.
The Saskatchewan chemical fertilizer incentive provides a non-refundable,
non-transferable, 15 per cent corporation income tax credit on capital
expenditures valued at $10 million or more for newly constructed or
expanded eligible chemical fertilizer production facilities in Saskatchewan.
In addition, this legislation
includes some minor technical amendments at the request of the Canada Revenue
Agency. For example, we are adding the finalized indexed tax credit amounts for
the 2026 taxation year, and we are making updates to tax credit formulas to
ensure indexation adjustments are applied smoothly in the coming years.
Whether it’s helping
individuals and families with affordability, supporting our volunteer first
responders who protect Saskatchewan, or ensuring our tax system remains fair
and effective, these changes provide a brighter future for our province. These
legislative amendments reflect our government’s commitment to deliver for
Saskatchewan. Happy to take questions.
Chair
C. Young: — Thank you, Minister. I’ll
open the floor to questions from committee members, and I’ll recognize Mr.
Wotherspoon.
Trent Wotherspoon: — Thanks.
If you’re able to just break out each of the changes and the fiscal impact of
each of them.
Hon.
Jim Reiter: —
So I’m going to answer the first two of that, and then the third one I’m going
to get Cullen to speak to. That’s the alignment with the CRA [Canada Revenue
Agency], some of the details there.
So on the other two, Mr.
Wotherspoon, the chemical fertilizer one, that’s going to depend totally on the
number of eligible projects going forward, so we don’t have a set dollar amount
on that. On the volunteer first responders one, that had been a $1.3 million
cost, so now with it being doubled it’ll go to 2.6 million. And that’s a
reduction in income tax because they’re getting that tax credit. So that’ll
show as a reduction of revenue as opposed to an expense.
I’ll get Cullen to talk about
the alignment with the CRA.
Cullen Stewart:
— Thank you, Minister. With respect to the personal income tax credits — the
basic personal exemption, spousal exemption, etc. — the Canada Revenue Agency
had requested while we had The Income Tax Act open to hardwire in, if
you will, the newest numbers for those tax credit enhancements. So they get
enhanced every year by $500 over and above indexation.
We obviously don’t know the
indexation amount until later in the year. So they said for ease of
administration for themselves and companies like TurboTax, while we had the Act
open, if we just hardwire the new numbers in then that would help them with the
administrative clarity. So no net new fiscal impact from that.
Trent
Wotherspoon: —
Thanks. And with respect to the . . . Yeah, I guess just the
volunteer firefighter tax credit, certainly this is a recognition for the
incredible service of so many across this province who are there to respond and
save lives and save land and protect communities. And we certainly have seen in
the last number of years, you know, how important that is, whether you’re
dealing with wildfire in the North or whether you’re dealing with that in the
South in the prairies or in an individual community.
And of course they’re
responding to far more than just fires as well. They’re responding to all the
emergencies often, you know, saving a life in a situation along . . .
you know, whether that’s a highway traffic accident or anything else that’s out
there. So I just want to say thank you so much to all these volunteer
firefighters and fire chiefs for their leadership across the province. I think
this is, you know, a good measure.
And I know this isn’t part of
this bill’s consideration here right now, but I just put on the record, we’ve
met with them as well though. And there’s been all sorts of changes around
equipment that’s required, and much of the equipment that they utilize and
depend on and that they fundraise for has been rendered obsolete. Real
challenges right now for them to make sure they have equipment that meets the
standards by way of safety equipment even and certainly pumper trucks and all
of the equipment that they require. And so we just hear a huge challenge right
now for the volunteer fire services across this province.
And you know, again they
operate through the goodwill of community and through charity and bake sales.
And they really are going to require some additional, some actual dedicated
funding to make sure that they can meet the standards that have been imposed on
them and to make sure that they’re safe and are able to do the job, the tasks
that they rise to.
I just flag that because I’ve
just met with them coming out of SARM [Saskatchewan Association of Rural
Municipalities] and SUMA [Saskatchewan Urban Municipalities Association] and in
some of the communities, and they’re really facing a difficult spot. And I’d
urge the minister to look at some of the models that are being used in the
other provinces. I understand that the volunteer services are funded with
. . . have sort of grant mechanisms or funding structures in place to
allow them to make sure they have the equipment that they need to be safe and
to allow them to do the job.
With respect to the chemical
fertilizer incentive, this is separate from the other bill that we’re going to
be considering tonight. Is that correct?
Hon.
Jim Reiter: —
Yes. There’s a legislation amendment to this legislation. Basically there’s
amendments required to two separate statutes. So this one’s under Finance’s
purview and the other one is under Trade and Economic Development.
Trent
Wotherspoon: —
Just on the chemical fertilizer incentive, I understand that uptake’s going to
dictate what sort of fiscal impact there is. Could you give us a bit of a
forecast on what you’ve modelled, the different scenarios that you’ve modelled
for fiscal impacts?
Hon.
Jim Reiter: —
I think in this case, if I could, Mr. Wotherspoon, I think that question would
be better put to Minister Kaeding. They’re more into the minutiae on this
program.
Trent
Wotherspoon: —
I have no further questions at this time.
Chair
C. Young: — Okay, seeing no more
questions, we will proceed to vote on the clauses. Clause 1, short title, is
that agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried.
[Clause 1 agreed to.]
[Clauses 2 to 16 inclusive
agreed to.]
Chair
C. Young: — His Majesty, by and with
the advice and consent of the Legislative Assembly of Saskatchewan, enacts as
follows: The Income Tax Amendment Act, 2026.
I would ask a member to move
that we report Bill No. 49, The Income Tax Amendment Act, 2026
without amendment.
James
Thorsteinson: —
I’ll so move.
Chair
C. Young: — MLA [Member of the
Legislative Assembly] Thorsteinson moves. Is that agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried. I’m going to
reserve any closing remarks. We’ll just move on to consideration of the next
bill and then we’ll do all of them at the very end, if you don’t mind.
Bill No. 50 — The
Financial Administration Amendment Act, 2026
Clause 1
Chair
C. Young: — Okay, we will move on to
consideration of Bill No. 50, The Financial Administration Amendment
Act, 2026 beginning with the consideration of clause 1, short title.
Minister Reiter, if you would like to make any opening remarks on this bill.
Hon.
Jim Reiter: —
Thank you, Chair. Just briefly, the amendments to The Financial
Administration Amendment Act will implement the on-reserve cannabis refund
program that was announced in the ’26‑27 budget. Amendments include First
Nations and strengthens ability to support Indigenous-led economic development
and ensures that First Nations can fully participate in and benefit from
provincial initiatives. This helps foster diversification and positions
Saskatchewan to take advantage of new economic opportunities.
With clear authority to
structure financial assistance, government can pursue strategic partnerships
with high economic potential. Ultimately this enables more focused investments
that deliver strong measurable outcomes. Happy to take any questions.
Chair
C. Young: — Thank you, Minister. I’ll
open the floor to questions from committee members. I recognize Mr.
Wotherspoon.
Trent
Wotherspoon: —
Thanks very much. Who’s been consulted on this legislation? And have any
concerns been expressed to the minister with respect to it?
Hon.
Jim Reiter: —
The officials are telling me, so this was actually initially . . .
this program’s been under way for a number of years. And it was SLGA
[Saskatchewan Liquor and Gaming Authority] that initiated it originally. I
would think, I’m assuming, that any consultation would have been done at that
time.
Cullen, I’m just going to get
you to speak to the technical amendment. This is purely a technical amendment
that was requested, correct? I’ll get you to . . .
Cullen Stewart:
— Correct. So this program was initially announced a couple of years ago. SLGA
had approached First Nations on-reserve cannabis store owners, and discussing
bringing the stores into the legal regulatory framework that they have for
cannabis retailers. Some of those First Nations requested, you know, some sort
of cannabis excise duty-sharing as a sign of goodwill and to incent them to do
that. So SLGA approached Finance, and we ultimately brought a cabinet decision
. . . [inaudible] . . . approved.
In looking to stand up the
program this past year, the Ministry of Justice had identified that there
probably should be a technical amendment in this Act just to give, you know,
the clear powers to stand up this program.
[18:30]
So we’ve done that now
through this budget bill. And that will allow us to enter agreements with First
Nations and begin having these grants provided to them for the half of the
cannabis excise duty at their stores as long as they’re in, you know, agreement
with SLGA that they’re within the regulatory framework.
Trent
Wotherspoon: —
So this will be a bit of an incentive or to respect that enterprise, create a
bit of equity in this program for First Nations enterprise as well. Is that
correct?
Cullen Stewart:
— That’s correct. There’s a few different First Nations that have expressed
interest in this program. And so that’s why we’re making this budget bill
amendment, to be able to stand it up and begin entering those agreements and
operating the grant program.
Trent
Wotherspoon: —
Would the technical amendment allow . . . So you’ve spoken about the
one program with the intent of what you’re going to do and the change that was
required. Does the change then empower the ministry to do things or build out
different programs that it hasn’t been able to in the past beyond that?
Hon.
Jim Reiter: —
Sorry. For clarity, beyond the cannabis on-reserve one?
Trent
Wotherspoon: —
Correct.
Cullen Stewart:
— Thank you for the question. So it’s intended just to be at this time utilized
for this program, but possibly in the future it would give, you know, authority
to stand up other programs. None that are being contemplated presently. But you
know, it was just the Ministry of Justice felt this was a good opportunity to,
you know, clarify the Act and the powers that it provides the Minister of
Finance.
Trent
Wotherspoon: —
What do we have for cannabis revenues right now to the province?
Cullen Stewart:
— Cannabis excise duty revenues are approximately 30 million overall.
Trent Wotherspoon: — And
what’s that look like in the last five years as the industry’s developed a bit?
Cullen
Stewart: —
So over the last number of years it’s been growing by about 3 million
annually, so the last year actuals we have is about $35 million. So it’s
on a slow upward trajectory.
Trent
Wotherspoon: —
I have no further questions with this legislation.
Chair
C. Young: — Thank you. Seeing no
further questions we will proceed to vote on the clauses. Clause 1, short
title, is that approved?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried.
[Clause 1 agreed to.]
[Clauses 2 to 7 inclusive
agreed to.]
Chair
C. Young: — His Majesty, by and with
the advice and consent of the Legislative Assembly of Saskatchewan, enacts as
follows: The Financial Administration Amendment Act, 2026.
I would ask a member to move
that we report Bill No. 50, The Financial Administration Amendment Act,
2026 without amendment. MLA Kasun moves. Is that agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried.
Bill No. 51 — The
Corporation Capital Tax Amendment Act, 2026
Clause 1
Chair
C. Young: — Minister, we will now
take due consideration of Bill No. 51, The Corporation Capital Tax
Amendment Act, 2026 beginning with consideration of clause 1. Minister, if
you would like to begin with opening remarks on the bill.
Hon.
Jim Reiter: —
These amendments to The Corporation Capital Tax Amendment Act will align
Saskatchewan’s corporation capital tax framework with other provinces and help
to support growth and competitiveness for Crown corporations and small
financial institutions. Saskatchewan is currently the only jurisdiction that
applies corporation capital tax to Crown corporations and small financial
institutions and has the lowest corporation capital tax rate on large financial
institutions.
The tax rate increase to
large financial institutions is expected to generate approximately
$40 million of revenue annually. The elimination of corporation capital
tax on small financial institutions accounts for less than $1 million in
corporation capital tax annual revenues. The elimination of corporation capital
tax for Crowns has no overall financial impact as the Crown corporations are
included in the summary budget.
In addition the bill proposes
to remove old and obsolete tax provisions, removing red tape. With that, I’ll
be happy to take questions.
Chair
C. Young: — Thank you, Minister. I’ll
open the floor to questions from committee members now. I recognize Mr.
Wotherspoon.
Trent
Wotherspoon: —
Thanks. I remember going through this a bit with some of your officials a
little while back to get a sense of it. I understand that it’s fiscally neutral
on the budget here this year. Share with me again how much of an increase has
been imposed on the large financial institutions and how much more revenue that
hauls in.
Hon.
Jim Reiter: —
It went from 4 per cent. This will move it from 4 per cent to 6 per cent. And
when that’s annualized it’s expected to be about $40 million.
Trent
Wotherspoon: —
And who’s paying this? This is the big banks basically, is that right? The
credit unions are excluded, correct?
Hon.
Jim Reiter: —
That’s right, yes. They’re excluded, yes.
Trent
Wotherspoon: —
Yeah, you’ve probably heard some concern from those . . . You know,
I’m not that sympathetic with the big banks. They play an important role, but
I’m not that sympathetic with them. That being said, have they expressed
concern to you with respect to these changes that have been made?
Hon.
Jim Reiter: —
We haven’t heard anything yet. That’s not to say it won’t be coming though.
Trent
Wotherspoon: —
Yeah, and what motivated this decision? This improves sort of the cash
position, the income position for the Crowns, correct?
Hon.
Jim Reiter: —
It was just described to me this way, and I think this is a good way of
describing, is it’s kind of a legacy from before we had the summary financial
statements and we did strictly the GRF. And right now, so to your point, it
saves the cash for the Crowns but in the summaries it’s a wash.
Trent
Wotherspoon: —
And so I mean it takes additional money from the big banks and it saves this
amount for the Crown . . .
Hon. Jim Reiter: — Sorry,
yeah. I was speaking just purely of the Crowns when I made that comment. And
then the rest of the bill, to your point, the tax on the big banks will be
higher, and then it eliminates the tax on the small financial institutions.
Trent
Wotherspoon: —
So is this a revenue-neutral bill or are the . . .
Hon.
Jim Reiter: —
No, it would definitely . . . So it would be, on the Crowns, there’s
no impact. With the large banks it would be $40 million extra revenue for
the province, and then you could reduce that by under a million dollars because
we’re excluding the tax on the small financial institutions. So between 39 and
40 million.
Trent
Wotherspoon: —
And the motivation on the big banks, you would’ve been looking for a place to
raise some additional revenue and saw this as a reasonable measure to do that?
Hon.
Jim Reiter: —
I would just add to that, I would say also our folks did a jurisdictional scan
of all the other provinces, what they’re doing, and it’s kind of all over the
place. But after we looked at that, we felt this was a reasonable place to
land.
Trent
Wotherspoon: —
And what are the other provinces doing? So we’ll be 6 per cent. What’s the tax
on the big banks, the corporate capital tax on the big banks in the other
provinces?
Cullen Stewart:
— So with respect to looking at other jurisdictions, the smaller province all
have CCT [corporation capital tax] on large financial institutions. So Nova
Scotia has raised theirs to 6 per cent this year, Newfoundland is at 6 per
cent, New Brunswick and PEI [Prince Edward Island] are at 5 per cent, and
Manitoba’s at 6 per cent. With respect though to some of the larger provinces
like BC [British Columbia], Quebec, and Ontario, all have payroll taxes that
the large financial institutions would pay. Saskatchewan doesn’t impose a
payroll tax.
So we would also look at CIT
[corporate income tax] rates. Saskatchewan has one of the lowest general rates
for corporate income tax in Canada. So looking at the collection of different
taxes that these large financial institutions would pay at the provincial
level, I think we’re still very competitive at the 6 per cent CCT.
Trent
Wotherspoon: —
And sorry, can you just highlight again, Manitoba and Alberta, what are they?
Cullen Stewart:
— Manitoba is 6 per cent, and the four largest provinces don’t have CCT on
large financial institutions. They’re typically seen as competing for those
headquarters, so they don’t typically have them. Canada has one and then the
six smallest provinces have one.
Trent Wotherspoon: — Are you
giving up on securing the headquarters to RBC [Royal Bank of Canada] here in
Regina?
Hon.
Jim Reiter: —
We’re always willing to talk to corporations about moving head offices here to
Saskatchewan.
Trent
Wotherspoon: —
You know, I don’t really have any further questions. I mean, to provoke just
that final comment there, the whole head office situation, not . . .
Outside of this legislation, just since it was raised, you know. Certainly
that’s a worthy initiative always, because we’ve really had an eroded head
office presence in this province over the last number of years, and something
to work towards. But with respect to the actual bill here and the change that’s
been made, I have no further questions.
Chair
C. Young: — Seeing no more questions,
we will proceed to vote on the clauses.
Clause
1, short title, is that agreed?
Some
Hon. Members: — Agreed.
Chair C. Young:
— Carried.
[Clause
1 agreed to.]
[Clauses 2 to 15 inclusive
agreed to.]
Chair
C. Young: — His Majesty, by and with
the advice and consent of the Legislative Assembly of Saskatchewan, enacts as
follows: The Corporation Capital Tax Amendment Act, 2026.
I
would now ask a member to move that we report Bill No. 51, The
Corporation Capital Tax Amendment Act, 2026 without amendment. MLA
Thorsteinson moves. Is that agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried. We will move on
to consideration of Bill No. 53, the Saskatchewan . . . This is
where we need a break. Do you guys want any closing comments on these bills? I
guess not. Okay. They’re shaking hands, so it’s all good. Sorry. Let’s take a
couple of minutes here to switch out.
[18:45]
[The
committee recessed for a period of time.]
Bill No. 53 — The
Saskatchewan Chemical Fertilizer Incentive Amendment Act, 2026
Clause 1
Chair
C. Young: — All right, we will move
on to consideration of Bill No. 53, The Saskatchewan Chemical
Fertilizer Incentive Amendment Act, 2026, beginning with considerations on
clause 1, short title.
Mr. Kaeding is here with his
officials. And I would ask that officials introduce themselves the first time
they talk at the mike and don’t touch the mikes. But, Minister, if you want to
introduce the officials that have joined you and make your opening remarks.
Hon.
Warren Kaeding: —
Good. Thank you, Madam Chair. I’m pleased to be here today to discuss The
Saskatchewan Chemical Fertilizer Incentive Amendment Act, 2026. Joining me
today is Jodi Banks, our deputy minister; Aaron Wirth, our ADM of strategic
policy and competitiveness; Kareen Holtby — oh, up there — executive director
of strategic policy and analysis; and Krystal Medwid, our executive director of
corporate services; and Michelle Lang, our chief of staff.
The Saskatchewan chemical
fertilizer incentive or SCFI is a non-refundable tax credit on capital
expenditures for newly constructed or expanded chemical fertilizer production
facilities in Saskatchewan that are non-potash related. So this legislation supports
continued investment in one of Saskatchewan’s most strategic sectors, that
being fertilizer production.
The program encourages
investment and stimulates chemical fertilizer manufacturing in the very
capital-intensive, highly competitive sector. And the program’s going to
continue to accept applications through the end of 2026. Proponents with
conditional approval prior to that date will have up to five years now to make
the necessary capital investments to access credit.
Madam Chair, since the launch
of the SCFI in July of 2020, the SCFI program has incentivized an estimated
$1.7 billion in capital expenditures, and this has supported thousands of
jobs and significant tax revenues.
Under the amendments, the Act
will continue to help our economy grow by extending the eligibility date for
capital expenditures by five years. They establish a clear and predictable
application window. This incentive supports our commitment to delivering a
strong, competitive Saskatchewan economy, an economy that delivers and protects
people who call Saskatchewan home.
Statistics Canada’s latest
GDP numbers indicate that Saskatchewan’s 2024 real GDP reached an all-time high
of $83.6 billion. That’s an increase of 2.5 billion or 3.1 per cent,
and this ranks Saskatchewan second in the nation for real GDP growth and above
the national average of 1.7 per cent. And it’s because of incentives like the
SCFI that our province is seeing these results.
Madam Chair, we are aware of
additional interest in using the SCFI to make significant capital investments
in our province. New investments generated by the program will bring in new
corporate income and property tax revenues, new jobs and associated personal
income tax revenues, and more opportunities for local suppliers and services.
Programs like the SCFI help deliver these results by supporting investment,
growth, and opportunity. With that, we welcome any questions the committee may
have for us. Thank you.
Chair
C. Young: — Thank you, Minister. And
now I’ll open the floor to questions from committee members, and I’ll recognize
Mr. Wotherspoon.
Trent
Wotherspoon: —
Well thanks very much, Madam Chair. Thanks, Mr. Minister, and officials that
have joined us here tonight and that are involved in this work. I don’t have a
bunch of questions. You’ve already answered a few of them.
I guess with respect,
certainly this is a very important industry, these are valued projects,
important investments. You highlighted that to date the subscription to this
program has allowed for $1.7 billion in investments to be made in this
space. What was the value of the incentive? What was the fiscal impact to
secure that $1.7 billion in investment?
Hon.
Warren Kaeding: —
So the $1.7 billion referring to conditional approvals, projects that are
just, you know, on the go now, being constructed. So what we’re estimating is
about a net fiscal benefit around $120 million. So with that is going to
come significant construction jobs, certainly a number of operational jobs when
they come to completion.
Ultimately government doesn’t
have any significant expense to them until these become profitable, when
they’re fully operational, become profitable. And then when they’re in that net
income position, then the tax credits will start taking effect. So we’ve given
them a pretty wide window to be able to realize those.
Trent
Wotherspoon: —
And this will extend the period . . . This will also then welcome new
applicants into this program, correct? So this will allow those that have
already been accepted into the program to fulfill their projects and realize
the credit that they’ve been approved for, but it will allow new applicants as
well. Is there a limit that’s placed on that annually on a going-forward basis,
or any thresholds that are in place?
Hon.
Warren Kaeding: —
No, there’s no limit at all. But certainly with the world dynamics changing as
they are with, you know, with the Strait of Hormuz and how fertilizer movement
has shifted, I would say we are going to likely see some pretty significant
interest now in what we’ve got to offer here for development in the fertilizer
industry.
Trent
Wotherspoon: —
So certainly the investment climate’s such a challenged situation in some of
these markets that have conflict and that are significantly disrupted. Of
course right now producers are seeing the other side of that as well, right. I
mean big increases to fertilizer costs as they’re heading into seeding here
right now.
It’s without doubt that it’s
valued for us to build these industries and these investments here in the
province. Do you also see a benefit that could be realized for producers by way
of buffering them or providing some relief? I mean we see the volatility right
now. And certainly producers, it’s been sharp for producers.
Hon.
Warren Kaeding: —
I think you’re right. As we see fertilizer moving from almost opposite sides of
the globe, freight is certainly an equation. And then risk is also part of that
equation. And that’s ultimately what we’re seeing now starting to drive
fertilizer prices up.
And pretty safe to predict
that when you’ve got local sourced, local supply, local inputs that are going
into that — you’ve taken freight out of the equation; you’ve taken some risk
out of the equation — so prices would certainly be probably more attractive
locally. The closer it is to source, the cheaper it would be to the buyer.
Trent
Wotherspoon: —
Yeah, certainly I see the value in the industry. And it’s a matter of sort of
some security on some of these fronts as well, much like energy security. I’m
not sure; I hope that with the growth on some of these fronts that we’re able
to better position our producers to be able to benefit from some of that
manufacturing and some of the resources that we’re blessed with here in this
province as well.
So
1.7 billion is what’s on the books so far that’s been approved through the
program. How much of that has actually been spent at this point?
Hon.
Warren Kaeding: —
So the process that we go through is certainly the initial application then
kind of a final application. Then you’ll get a conditional approval, and then
ultimately get issued a certificate of eligibility where they get to start
claiming the tax credit.
So we’ve got one that’s fully
completed and now going through the certificate of eligibility. Northern
Nutrients is one that, I believe, based around Saskatoon, producing fertilizer
there. And then we’ve got one that we drive by. As you’re driving to Moose Jaw,
you see the big wooden structure there, Hawk’s Agro, a big significant
fertilizer storage facility that has conditional approval for it. And not
handling fertilizer yet, but certainly as they do then will get full
eligibility.
Then we’ve got other
companies. A couple of companies in particular that, you know, very much have
that conditional approval and now just going through the various stages of
development. And then hopefully get off the ground and start contributing.
Trent
Wotherspoon: —
Thanks again. And just to clarify then, how much has actually been invested at
this point? How much has been spent on the projects that have been advanced or
that are advancing?
Hon.
Warren Kaeding: —
So the total capital expenditure to date would be 60 million between those
two projects.
[19:00]
Trent
Wotherspoon: —
And you’ve got 1.7 billion on the books. What’s your timeline that you
anticipate that investment occurring?
Hon.
Warren Kaeding: —
It’s variable, as they’re in different stages of development and evolution
through their planning process, so they’ve got, oh boy, is it now up to 10
years to . . . Aaron, maybe do you want to just talk about kind of
the window you’ve got to make that in.
Aaron Wirth:
— It’s Aaron Wirth, the assistant deputy minister of strategic policy and
competitiveness. So yeah, they would have a 5‑year window to make those
capital investments, and the capital investment requirement is
$10 million.
Trent
Wotherspoon: —
I don’t have any further questions at this time, Madam Chair.
Chair
C. Young: — All right. Seeing no
further questions, we will proceed to vote on the clauses. Clause 1, short
title, is that agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried.
[Clause 1 agreed to.]
[Clauses 2 to 8 inclusive
agreed to.]
Chair
C. Young: — His Majesty, by and with
the advice and consent of the Legislative Assembly of Saskatchewan, enacts as
follows: The Saskatchewan Chemical Fertilizer Incentive Amendment Act, 2026.
I would ask a member to move
that we report Bill No. 53, The Saskatchewan Chemical Fertilizer
Incentive Amendment Act, 2026 without amendment. MLA Kasun moves. Is that
agreed?
Some
Hon. Members: — Agreed.
Chair
C. Young: — Carried. Minister, if you
would like to make any closing remarks before we finish.
Hon.
Warren Kaeding: —
Certainly. Would like to thank the officials that spend an awful lot of time
working on the market development side of this and exploring all the
opportunities that we currently have in the province and that we know we’re
going to have in the future. Certainly I’d like to thank committee members and Hansard
and their officials for the work they’ve put into tonight.
Chair
C. Young: — Mr. Wotherspoon, do you
have any closing comments including from the previous bills?
Trent
Wotherspoon: —
Yeah, just real quickly. Of course we’ve had the Finance estimates and then we
had some budget bills there, Finance bills, and now we have this bill here.
So thanks to the Chair.
Thanks to the committee members. Thanks to the minister here tonight on this
front. Thanks to all the officials that have joined you here tonight and that
are involved in this work, and you know, that includes Arlie too.
Chair
C. Young: — All right. Thank you. We
will do a short recess now just to change out.
[The
committee recessed for a period of time.]
Chair
C. Young: — All right. Welcome back,
committee members. And before we begin this evening, I will be allowing
permission — it has been quite warm in here; we have left the doors open to try
to let it cool down — but you’re welcome to take your jackets off if you need
to.
General Revenue Fund
Lending and Investing
Activities
Saskatchewan Power
Corporation
Vote 152
Chair
C. Young: — So welcome back,
committee members. We will now move on to consideration of the estimates and
supplementary estimates no. 2 for Saskatchewan Power Corporation. We will
begin with vote 152, Saskatchewan Power Corporation.
Minister Harrison is here
with his officials. I’ll ask you to say your names and titles the first time
you speak at the mikes, and Hansard will turn them on for you. So,
Minister, you can introduce your officials if you choose or wait till they
speak at the mike, and begin with your opening remarks.
Hon.
Jeremy Harrison: —
Sure. Well thanks very much, Madam Chair. Thanks to committee members for being
here. Thanks, Madam Chair, as well for the accommodation, given the warm
temperature here in the Chamber which seems to have actually warmed up over the
course of the day and into the early evening here.
But introducing my officials,
to my right, needing no introduction, Rupen Pandya, our CEO [chief executive
officer] of SaskPower, president and CEO of SaskPower. Around the room — and
I’ll just read the list and folks can maybe put their hand up if they so wish —
Troy King, executive vice-president, chief strategy, technology, and financial
officer; Rachelle Verret Morphy, executive vice-president, legal and corporate
services and general counsel; Rhea Brown, executive vice-president, customer
experience and procurement; Kory Hayko, executive vice-president and chief
operating officer; Gregg Milbrandt, vice-president, asset strategy and
planning; Ryan Neufeld, vice-president, engineering and construction; Scott
Chomos, director, business planning and rate design; my chief of staff, Emma
Keogan. And as well from CIC, Kent Campbell, president and CEO, and Richard
Davis, senior advisor to the president.
As I alluded to I think
yesterday and today in the Assembly, at the end of my remarks I’ll be making an
announcement, and I want to acknowledge and thank the SaskPower employees who
are going to be tuning in. And I know that there are probably hundreds who are
actually watching right now, and I appreciate them doing that. And I’ll be
speaking a lot through estimates to our employees and our great team at
SaskPower.
So, Madam Chair, we are
pleased to be here today to discuss consideration of estimates for SaskPower
for the 2026‑27 fiscal year. SaskPower is responsible for serving more
than 550,000 customer accounts within Saskatchewan. SaskPower, a Crown
corporation that quite literally powers our province, our economy, and our
future, is the backbone of modern life in Saskatchewan. It heats homes in
February. It enables farmers to produce, miners to operate, and businesses to
grow.
And because of that, the
responsibility we carry to ensure SaskPower is reliable, affordable, and
dependable is one we take very, very seriously. To serve these customers, the
company maintains more than 160 000 circuit kilometres of power lines and
6191 megawatts of generating capacity, including 2549 megawatts of natural gas,
1528 megawatts of coal, 863 megawatts of hydro, 818 megawatts of wind, and 110
megawatts of solar, including 80 megawatts of customer-generated and 30
megawatts of utility-scale solar.
This past fiscal year was a
defining one for SaskPower and for Saskatchewan’s electricity system more
broadly. It was a year shaped by generationally significant long-term decisions
and the need to act decisively, often on more than one front at the same time.
Operational challenges, including severe wildfires in northern Saskatchewan,
unfolded alongside major strategic investments in generation, transmission, and
workforce readiness.
At the same time,
expectations around reliability, affordability, and energy security remained
front and centre for SaskPower and government alike. Our government’s approach
to SaskPower is grounded in two core principles: reliability and affordability.
SaskPower continued to focus on a clear objective: delivering reliable,
affordable power today while building the system Saskatchewan will depend on
decades from now.
Let me begin with
reliability, because everything else is secondary if you can’t keep the system
running. Saskatchewan is not like other jurisdictions. We live in a winter
province where minus 40 is not a hypothetical; it’s a reality. At those
temperatures, the consequences of failure are not inconvenience; they are
serious. So our approach has been straightforward. We build a system that works
in Saskatchewan and for Saskatchewan. That’s why our government continues to
invest in firm, dispatchable generation. That also means not gambling on
technologies that cannot carry the load. Renewables do have a role, but they
cannot replace baseload power.
[19:15]
We’re taking an approach that
is practical, pragmatic, and realistic. Our approach is not about ideology.
It’s about ensuring we can meet growing demand, because demand is growing. From
mining expansion to value-added agriculture to data centres and AI [artificial
intelligence] infrastructure, Saskatchewan is seeing major economic opportunity
and investment, and none of it happens without power.
In June 2025 I wrote directly
to SaskPower employees, setting out the province’s decision to extend
coal-fired generation beyond the unconstitutionally federally imposed 2030
phase-out date. That direction was reinforced in October of 2025 with the release
of the Saskatchewan First Energy Security Strategy and Supply Plan. The
strategy establishes energy security as the government’s top priority. It
confirms a diversified supply mix, recognizes coal generation as a necessary
bridge while nuclear capacity is developed, and emphasizes the importance of
expanding the province’s transmission system.
It also underscores that
delivering this agenda requires partnerships, particularly to grow a skilled
workforce, advance major capital projects, and strengthen Indigenous
participation across procurement, training, and employment. SaskPower has
aligned its planning and execution directly with this framework.
Acting on this direction from
government, SaskPower has launched the coal life extension project in 2025. The
objective is clear: keep existing coal assets operating safely and reliably
through to 2050 as Saskatchewan transitions to nuclear baseload power. Work is
now under way to do the necessary assessment work on our coal facilities to
determine and finalize refurbishment plans and the scope of work required for
each of our coal-fired generating stations.
Reliable generation must be
supported by a resilient grid. In February the government released Strengthening
Saskatchewan’s Grid: Transmission to Power Communities and Growth, which
complements the energy security strategy and outlines SaskPower’s long-term
transmission priorities. We’re making these significant investments in
transmission and distribution because as our economy grows, so too does the
need to move power across the province efficiently and reliably. From rural
communities to northern development to major industrial projects, SaskPower is
upgrading infrastructure to meet the demands of today and tomorrow.
SaskPower is reinforcing
existing infrastructure, enabling load growth across the province, expanding
the grid into the North, and increasing interconnections with neighbouring
jurisdictions to enhance resilience and market access.
SaskPower has already begun
executing the largest transmission expansion program in decades. A central
project is the north-south transmission interconnection which will link the
province’s southern system with the northern grid for the first time.
Preliminary planning, design,
and engagement with Indigenous rights holders and the public has begun.
Procurement planning and initial industry engagement is well under way as well,
with formal procurement expected in 2026.
This work is complemented by
several other critical northern transmission projects, including the Island
Falls capacitor installations to support wheel power through Manitoba, the
Taylor Bay project to serve mining development in the far North, and the McIlvenna
Bay customer connection for the Foran copper project which was just energized
very recently this year and will ensure future industrial activity in the
North.
Nuclear energy remains the
foundation of Saskatchewan’s long-term electricity strategy in the pathway to
achieving carbon neutrality by 2050. I want to spend some time on nuclear
because this is one of the most important decisions we are making for the long-term
future of our grid.
In January the province
announced that SaskPower will also begin evaluating large nuclear technologies.
We’ll build on the experience gained from the SMR process and work closely with
well-established electrical utility Bruce Power which we just announced last
week, which has decades of experience in nuclear generation.
Recently SaskPower signed
that memorandum of understanding with Bruce Power to inform Saskatchewan’s
assessment of large-scale reactor technology. This is a significant step
forward. Bruce Power operates one of the largest nuclear generating sites in
the world. They bring decades of experience in safe, reliable, emissions-free
baseload power.
And what this agreement does
is simple. It gives Saskatchewan access to that expertise as we evaluate what
large-scale nuclear could mean for our province. Nuclear offers something no
other non-emitting technology can — reliable, around-the-clock power regardless
of weather. It’s not intermittent. It’s not dependent on other jurisdictions.
It’s proven, and for a province like Saskatchewan, that matters.
During 2025‑26
SaskPower made tangible progress in preparing for that future. In the shorter
term, site selection for Saskatchewan’s first SMR facility is expected in 2026‑27.
To prepare Saskatchewan for nuclear investments, we’re directed toward
workforce development, education, and institutional capacity. This includes
funding the establishment of Canada’s first small modular reactor safety,
licensing, and testing centre at the University of Regina, featuring two
reactor test loops designed to simulate operating conditions.
SaskPower also hosted Western
Canada’s first Nuclear Energy Management School in partnership with the
International Atomic Energy Agency and the University of Saskatchewan,
strengthening leadership and regulatory expertise within the sector.
Meaningful Indigenous
engagement has been integral throughout the company’s work on nuclear.
SaskPower conducted and continues to undertake significant consultation with
Indigenous Nations on the SMR siting process. Internationally Saskatchewan’s
nuclear leadership continues to gain recognition with participation in global
forums and the hosting of the Canadian Nuclear Association’s first-ever CNA
West conference in Saskatoon.
Throughout 2025‑26
SaskPower continued to deliver major infrastructure projects to support growth
and reliability. Capital spending for the year is forecast at $1.7 billion,
reflecting a strong pipeline of sustainment, growth, and strategic investments.
Completed projects include the Descharme Lake microgrid, the province’s first
independent solar battery diesel system, expansions at the Ermine and Yellowhead
power stations, and the reconstruction of critical transmission infrastructure
serving Uranium City.
In the south of the province,
progress continued at the new natural gas-fired Aspen power station near
Lanigan. It’s now more than two-thirds complete and on track for commercial
operation in December of 2027. Construction activity has generated significant
local employment and procurement benefits with the workforce expected to peak
this year. In parallel, during the last year SaskPower advanced new power
purchase agreements with industrial, renewable, and independent power producers
across the province; continued to explore a replacement facility for the Meadow
Lake power station; and continued development work on additional solar and gas
generation options.
SaskPower’s procurement
activities continue to deliver significant economic benefits for Saskatchewan.
By the third quarter more than $730 million in commitments had been
awarded to Saskatchewan-based suppliers, with Indigenous procurement exceeding
$150 million year to date. The Aspen power station illustrates this
progress particularly well, with local Indigenous- and women-owned businesses
participation significantly exceeding targets.
Across government, Crown
collaboration efforts also delivered meaningful results. SaskPower played a
leading role in achieving cost savings that surpassed provincial targets
supported by joint initiatives with fellow Crown corporations and ministries.
Despite declining trends
across North America, SaskPower again ranked first nationally in customer
satisfaction amongst major utilities, performing strongly across every measured
category. Independent benchmarking also placed SaskPower at the top of Canadian
utilities for overall customer experience.
I want to take some time to
talk about something that’s too often overlooked in discussions like this and
that’s the people — skilled, dedicated, Saskatchewan people who show up every
single day in all conditions to keep this province running.
It’s not something that
people always think about. They flip a switch and expect the power to be there,
and that doesn’t happen by accident. That happens because of the people at
SaskPower, people working in conditions that most of us would avoid. They’re
out there in the middle of winter. They’re out there during storms. And in
Saskatchewan, that matters.
So when a line goes down,
somebody is going out to fix it, usually right away, usually in the dark, and
often in conditions that are far from ideal. Take line work. That’s skilled,
technical, high-risk work, working at heights, working around high voltage, and
working in conditions where there is no room for mistakes. And they do it well.
They do it consistently. They do it professionally every single day.
It’s the same story in our
generating stations. There are people who have spent years, decades learning
those systems. They know how to operate them. They know how to respond under
pressure. They know what it takes to keep them running safely and reliably.
That kind of experience matters. You don’t replace that overnight. You don’t
replicate it with theory. It comes from doing the work. And those facilities
have been delivering reliable power day in and day out for this province
because of the people inside them.
There’s a level of
professionalism in this workforce that’s worth acknowledging in a very real
way. And thanks so much to all of them, and through Rupen, thank you so much to
our team and to all of the folks who work for SaskPower. These folks understand
what’s at stake. They understand that people rely on this system, and they take
that work extremely seriously.
As we look ahead, that
workforce becomes even more important. 1,400 folks in Coronach and Estevan,
that workforce is as important as they continue to work on our existing assets.
As the system evolves and we add new generation and progress towards a nuclear
future, that work requires people — skilled people, trained people, those who
can understand the system and operate it safely. That’s why we continue to
invest in our workforce through training, apprenticeships, and skills
development. We’re fortunate to have that workforce and we’re fortunate to have
industry partners who believe in this work.
We have industry partners who
are excited and preparing for their role in the nuclear supply chain. Partners
like SIMSA [Saskatchewan Industrial and Mining Suppliers Association] play that
critical role. Saskatchewan Industrial and Mining Suppliers Association
represents hundreds of Saskatchewan companies that provide goods and services
across industrial sectors. They’ve been very clear: they want Saskatchewan
companies to be part of the nuclear opportunity. And that is a shared goal.
In March 2025 the Government
of Saskatchewan committed $286,000 over two years to SIMSA under a new contract
to enable Saskatchewan-based industrial suppliers to become qualified in
nuclear supply chains. With funding support from the Government of Saskatchewan,
SIMSA has also been delivering supply chain workshops, training, and education
to help Saskatchewan businesses build knowledge and capacity in nuclear
technology.
Nuclear power is not just
about electricity. It’s an economic development opportunity. It’s about
building a new long-term industrial supply chain that creates opportunities for
local and Indigenous companies and workers.
For the majority of my time,
I’ve focused on reliability and energy security. And for my remaining time, I’d
like to turn to the focus of affordability. Across Canada electrical utilities
are facing significant rate pressures. SaskPower must make investments in the
reliability and security of the electricity grid while balancing fuel and
operating costs.
SaskPower’s committed to
balancing the need for significant infrastructure investments as well, while
also ensuring long-term reliability and affordability for power customers. To
that end, efficiency programming at SaskPower is in place to mitigate the impact
of rising cost pressures on customer rates. SaskPower’s ongoing focus on
efficiency has seen $888 million in savings in the previous eight years.
The corporation is targeting an additional $30 million in savings over the
next two years.
[19:30]
The energy assistance
program, which is a free program for income-qualified customers and includes a
home walk-through, energy coaching, and the installation of several
energy-saving products, which is a smart thermostat upgrade, low-flow water
measures, a drying rack, and LED [light-emitting diode] lighting. Customers can
save up to an estimated $230 per year on their electricity, gas, and water
bills via this program.
The northern First Nations
home retrofit program. First Nations that use electric heat as their primary
heating source are eligible to receive no-cost home retrofits such as upgraded
insulation, window and door replacements, and LED lights. Participating First
Nations receive education around energy efficiency to increase knowledge and
awareness of their energy use. Participants living in an electrically heated
home can save an average of $500 per year on their power bills.
The Indigenous new homes
rebate program, where financial support is offered to eligible Indigenous
communities to help make new home builds more energy efficient during the
construction phase. Homes constructed with the Indigenous new homes rebate
could save between 1,000 to $3,000 annually on their power bills based on the
energy performance standards of the home build. The rebate is open to eligible
Indigenous communities in northern Saskatchewan who rely on electric heat as
their primary heating source.
Energy efficiency discounts
program — that’s SaskPower in collaboration with SaskEnergy — partners annually
with local retailers across Saskatchewan to offer point-of-purchase discounts
on a variety of energy-efficient products.
Home efficiency retrofit
rebate, also in partnership with SaskEnergy, is a program that offers rebates
to eligible Saskatchewan homeowners to enhance their home’s efficiency with
high-performance windows, doors, insulation, and air sealing retrofits.
The commercial energy
optimization program, which is a program that provides commercial customers
with support for managing their power costs by offering expertise, education,
and financial incentives for identifying energy efficiency opportunities and implementing
energy efficiency improvement projects. This program leverages funding from
NRCan’s [Natural Resources Canada] deep retrofit accelerator initiative, which
is part of SaskEnergy’s commercial space and water heating rebate program.
SaskPower
provides rebates on a prescriptive list of high-efficiency HVAC [heating,
ventilating, and air conditioning] equipment to encourage business customers to
select the most efficient equipment for their needs and to reduce cost.
In addition to customer
programs, SaskPower offers special care and flexibility to customers who are
struggling to keep up with bill payments. We offer online energy assessments
for homes. This free tool on saskpower.com provides customers with energy savings
tips based on an online evaluation of power and natural gas consumption.
Payment deferral. SaskPower
may permit customers to defer a lump sum owing and make payments toward that
balance at any time during the deferral period. Customers must continue to pay
their current monthly bills during this time.
Instalment payment plan.
SaskPower works with customers with outstanding balances to establish
structured monthly payment arrangements, enabling them to resolve their areas
over a specified period. To make it easier, eligible customers can create their
own instalment plan online via chat or through a phone call to SaskPower.
Equalization payment plan or
budget billing. This plan makes it easier for customers to budget their power
bills by allowing the customer to pay the same amount each month and avoid
unexpected high bills.
Indigenous organization
support. SaskPower established the Indigenous customer support care group that
continues to support all 70 Nations with things like billing questions, setting
up payment arrangements, sharing information about SaskPower programs, and
working directly with Indigenous communities to address their concerns.
SaskPower expects its
affordability programs in 2025‑26 to have saved up to $1 million for
customers in continued savings year over year. But perhaps the most impactful
affordability initiative related to SaskPower is this government’s decision to
remove the carbon tax from SaskPower bills entirely. In April 2025, the
province directed SaskPower to stop collecting the federal carbon tax from
SaskPower customers. Removing the federal carbon tax rate resulted in the
equivalent of an 11.7 per cent rate decrease on each customer’s bill on a
system-wide basis.
In the 2026‑27
provincial budget, government announced that SaskPower will invest
approximately $1.7 million to support Saskatchewan’s electricity system to
meet increasing demand and ensure long-term reliability and energy security.
This includes significant investment in the following areas: sustainment, which
includes the maintenance and repairs to existing generation, transmission, and
distribution assets; growth compliance and resiliency, which includes
transmission and distribution growth to increase grid capacity and connect new
customers to the system as well as new generation; and strategic investments,
which includes upgrades and improvements to supply chain, technology, and other
projects.
For the upcoming year,
generation investment will include the comprehensive coal modernization
program, ongoing investment in SaskPower’s existing hydro and natural gas
generation fleet, including routine maintenance and work toward life extensions
to ensure reliable operation until their planned retirement dates.
With respect to transmission,
SaskPower will invest significantly to support growing provincial electricity
demand, the integration of new generation, improved energy security, and
ongoing economic development across Saskatchewan. Planning efforts remain
focused on accommodating a diversified mix of future generation supply options,
while responding to evolving regulatory requirements and shifting customer
expectations.
Work has also been previously
announced to connect natural gas generation facilities in the Lanigan and
Meadow Lake areas. SaskPower is also continuing to invest in the development of
new substations and the upgrading of existing facilities across the southern
portion of the transmission system. These investments are crucial to support
significant residential and commercial growth occurring in the province’s major
load centres.
Substation projects,
including new builds, transformer additions, and targeted capacity expansions
ensure adequate infrastructure is in place to meet rising demand in rapidly
growing communities and to maintain system reliability as load growth accelerates.
As SaskPower’s transmission
facilities approach end of life, ongoing asset sustainment investment will be
required to ensure the continued reliable operation of the transmission system.
These investments include critical asset management programs and initiatives
designed to effectively mitigate risk to SaskPower’s operations and maintain
system performance over the long term.
Saskatchewan’s distribution
lines provide a vital link between our transmission facilities and our lower
voltage customers. SaskPower installs 28,000 to 30,000 wood distribution poles
per year through various programs, including through the construction of new
customer services, system growth, rural rebuilds, and individual pole
replacement programs. On average, our distribution lines are approximately 37
years old, and there’s a need for ongoing investment to maintain and replace
this infrastructure.
Several programs have been
planned to address growth and sustainment of system capabilities throughout the
province. Some examples of this work include the distribution customer connect
program to provide new service for residential, commercial, and oil field sites
in the province. Sustainment programs to replace aging rural infrastructure,
including line rebuilds, wood pole replacement, testing, and replacement of
rural underground infrastructure; the replacement and life extension of aging
infrastructure such as wood poles, underground cables in urban centres, and
other apparatus on the network.
All of this work will
continue in 2026‑27 while SaskPower is also focusing on grid
modernization to utilize automated metering technology, integrate steadily
growing distributed energy resources, and increasing automation and support.
And with that, the
announcement that we were very much looking forward to. And we’ll take
questions obviously after this, but we really are pleased to announce that, for
the first time, announcing for the first time, that Boundary dam 4, unit
Boundary dam 4 is going to be officially returning to service by May of 2026.
April 17th we flipped the burner, lit the boiler for the very first time in
nearly two years. And I would say as well, just an amazing amount of work that
has gone into this project from our SaskPower team.
I think we passed the
pressure testing, and TSASK [Technical Safety Authority of Saskatchewan]
recertification process has been concluded. The fuel interlock testing was
concluded as well, right prior to the test firing last week. I think we were
flushing the boiler over the weekend, is what was occurring next. And we’re
going to be moving into the spinning of the turbine this week.
So I really want to thank —
and he can’t be here tonight — Howard Matthews, and through him, his team. Jody
Waloshin, who led the project on the ground at Boundary dam, did a remarkable
job. Literally hundreds of people who worked on this. I want to thank a number
of them personally and specifically name some of the participants. Boilermakers
555 were very involved in this. Obviously IBEW [International Brotherhood of
Electrical Workers] 2067, Millwrights 1021, pipefitters UA [United Association
of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry] 179,
insulators 119, scaffolder Local 1985, Ironworkers 771 played a role in this as
well, and our team.
And I’m going to just list
off about 10 or 15, and then we’ll move to questions. But Jody Waloshin, who is
the project lead on BD4 [Boundary dam 4], Jeremy Ruddick. I want to thank Brett
Goudy, Kevin Curtis, Charles Adeola, Mitchell Grimes, Eric Jorgenson, Lane
Wallace, Kent Packet, Jeff Adamcewicz, Tyrel Mattei, Jesse Gervais, Mark
Loverton, Jeff Dupuis, Ryan Lang, William Keturakis, and Tim McLean. And there
were many, many more. I have the list, and I’m going to get around to thanking
all of them as well.
But with that, Madam Chair, I
will turn it back to you.
Chair
C. Young: — Thank you, Minister. And
I will make note for the records that Aleana Young is chitting in for Erika
Ritchie this evening. So I will open the floor to questions from committee
members, and I’ll recognize Ms. Young.
Aleana
Young: —
Why thank you so much, Madam Chair. Through you, Madam Chair, what’s the total
estimated capital cost of the government’s electricity plan?
Chair
C. Young: — It was through me?
Hon.
Jeremy Harrison: —
Well we’ll have a consultation here and provide a response. Thanks.
Chair
C. Young: — Yes.
[19:45]
Hon.
Jeremy Harrison: —
So thanks, Madam Chair. So what we’re going to ask the committee’s indulgence
to do . . . So I’ll provide you some overall introductory remarks,
Rupen’s going to provide some thoughts, and then Troy is going to have some of
the detailed figures here for the next year going ahead here.
So
what I would say by way of introduction, Madam Chair, is really we’ve taken, as
I said in my introductory comments, generationally significant decisions with
regard to the energy security strategy and what that path is going to be as we
go forward with SaskPower. And thank the team for all of the work that went
into that as well.
Really the prioritization was
energy security, making sure that we are able in this province to have our own
power produced here, that we’re going to be self-sufficient in that space using
resources now and into the future that are available right here in Saskatchewan
and owned by the Saskatchewan public. That really was the cornerstone of the
energy security plan.
Along with that work,
obviously going to be making, you know, significant and real investments into
transmission. The north and south grid connection is really very, very
significant and a very large investment that will be made starting this year on
some of the procurement, longer lead items on the procurement front. So that
really is what has underpinned that approach.
And we’ve, you know, used the
number publicly — the company and I have — in the costs avoided by taking this
path compared to the alternative paths, which is $21 billion in savings by
going down this path. So that really is in addition though to the underlying
policy rationale as to why we went in this direction.
So with that I’ll maybe turn
it to Rupen and then ask Troy to maybe get into some more detail.
Rupen Pandya:
— Thank you, Minister. Rupen Pandya, president and chief executive officer of
SaskPower. Maybe I’ll just make some brief comments about comments I’d made in
2023 alongside the Premier about the financial, logistical, and technological
challenges with respect to achieving the clean electricity regulations
requirements around net zero. At the time I’d noted that those compliance costs
in Saskatchewan were inequitable insofar as the geography in this province
doesn’t afford us significant opportunity for additional hydro unlike British
Columbia, Manitoba, Quebec, Newfoundland.
And so in terms of compliance
costs with respect to decarbonizing energy going forward, that pathway is
significant and severe in Saskatchewan. And so one of the areas that I’ve been
advocating in Ottawa, along with federal ministers, is that there needs to be a
more practical pathway for Saskatchewan to achieve the goal of net zero moving
forward. And you know, I think that there is a plan that we have in place that
looks at real issues with respect to supply chain constraints.
So right now, for example,
gas turbine and gensets for gas facilities are 52 months to delivery and then
another two years for install. So we’re talking about a seven-year build just
to get 300 megawatts of combined cycle gas back into our system. And so our
plan as it has evolved is to ensure that we have every available megawatt of
electricity that is available to the grid as we continue to make the planned
investments to allow us to move forward.
So maybe on that note I’ll
turn it over to Mr. King, and he can walk through some of those investments.
Troy King:
— Hi. I’m Troy King, executive vice-president, strategy, technology, and
finance. So I’ll just talk about the . . . When we talk about our
total cost, we usually break it down into three categories. There’s our
operating costs, there’s our fuel costs, and then there’s our capital costs. So
then capital costs are made up of depreciation, finance charges, taxes, and
other costs.
So starting with the capital
plan for ’25‑26, we got a total budget of $1.787 billion. 688 is in
sustainment spend, broken down by generation, transmission, and distribution.
On the compliance side we have $1.137 billion of spend, again broken down
by generation, transmission, distribution, as well as customer connects. And
then total strategic and other investments of $114 million. Netted off
that is grant funding that we’ve received of about $152 million for a
total of 1.787 billion.
In ’26‑27 our
sustainment spend is going to be $710 million. Growth and compliance will
be 1 billion and 57. Strategic and other will be 73. And for grant
funding, we anticipate receiving $148 million. On the fuel side, our fuel
budget for ’25‑26 is just over a billion dollars, and netted off that
will be the clean electricity transition grant that we get from the provincial
government. And on the OM & A [operating, maintenance, and
administration] side, we’re spending $947 million this year. We go to ’26‑27,
fuel purchase power is going to be $1.124 billion, and our
OM & A spend is going to be 987 million.
Aleana
Young: —
Thank you, Madam Chair. Respectfully that wasn’t an answer to the question that
was asked. And I would note for the record that the minister and officials are
unable or unwilling to provide a figure to the committee, unable to provide a
total cost estimate for the government’s electricity plan, which I think will
be disappointing to the 557,000 customers relying on SaskPower and relying on
some basic transparency and accountability when it comes to important questions
like this.
Is the total cost, total
capital cost of the government’s electricity strategy, is it greater than
$30 billion?
Hon.
Jeremy Harrison: —
So maybe, Madam Chair, if I could, we’re going to do some additional
conversation here. But I would just say, I mean, I find it pretty disrespectful
to officials, what we just heard there. I mean, feel free to attack me. Like,
go ahead. Fine. But don’t go after the officials here. I mean, these folks are
professional, hard-working people who are utterly committed to this province.
So let’s just leave it at that, and we’ll do a bit of a consultation.
Chair
C. Young: — I would agree, Minister.
The officials did provide figures. They may not be exactly what you were
looking for, but you are welcome to re-ask your question if you choose, if you
didn’t feel you got the right answer, rather than attack them for what they
provided to you.
Aleana
Young: —
Madam Chair, I don’t think that’s remotely accurate or fair. It’s not an
attack, Madam Chair. This estimates committee, as well as all members on this
committee, have an important function to fulfill for the Chamber, for the
legislature. I’m able to ask questions. The minister is able to not provide
answers. These are important. I suspect these should be figures that the
minister and his team here would have at their fingers. It shouldn’t take us 50‑odd
minutes to not get an answer to a single question, Madam Chair.
Chair
C. Young: — Ms. Young, if you would
like to repeat your question, to be a little more clear, you are more than
welcome to. But they did converse and they did come up with figures. They may
not be what you were looking for, and that’s what I’m saying. You’re welcome to
re-ask the question in another way, rather than ramble on.
Aleana Young: — Thanks,
Madam Chair. I would take your advice as to how to make this question clearer
in terms of what the total estimated capital cost of the government’s
electricity plan is.
Hon.
Jeremy Harrison: —
So thanks, Madam Chair. So the question is a hard one to answer with a direct
number. The reason being is one of the, you know, most significant components
of our plan going forward is going to be that transition to nuclear. And you
know, we’ve talked about this a bit. I’ve talked about this even last night.
I’ve talked about it publicly on different occasions.
But we are working through
what ownership arrangements are going to look like with nuclear. We haven’t,
you know, made a final determination as to technology as far as large-scale. We
haven’t made decisions with regard to mix of nuclear generation. Small and
large, small or large, large and small — there are a number of different
options that we’re going to be working through.
And you know, I’ve been
criticized for this. But we’ve been very forthright in saying, when it comes to
nuclear, we are going to be looking at options for equity ownership that will
include things like Indigenous equity ownership, which is something I have been
very, very clear that we are committed to as government. We’re going to work
through what that looks like though, and we don’t have the answer.
You know, we’ve been working
with the First Nations Natural Resource Centre of Excellence on this very, very
closely, which is the organization tasked by the FSIN [Federation of Sovereign
Indigenous Nations] with being the lead on behalf of the province’s First
Nations. So that was our partner in this.
You know, how will that look
as far as the equity ownership component? How is that financed? There are a
number of different options. We look around the world. In fact I was talking to
the president of the Canadian Nuclear Association just today, had a great
meeting talking about the work that CNA is doing with regard to nuclear, the
structure of nuclear power production and power plants that are being
constructed around the world right now.
[20:00]
Sizewell C project in the UK
[United Kingdom] is a great example, which was a project that was, at one
point, 100 per cent privately financed. The UK government has since moved into
a minority ownership position in that project. But there is a, I would say,
rapidly evolving landscape with regard to how nuclear power projects are going
to be financed and how the ownership structure is going to work.
I’ve been clear in saying
that I envision SaskPower being the operator, which is why we are putting the
work and resources that we are into SaskNuclear, preparing for that
eventuality. But how that ownership structure is going to look is very much a
question that’s open.
And we’ve been working with
the Government of Canada as well who have been, I would say, very open to the
discussion about what the path on nuclear is going to look like as well.
They’ve been partners with the Ontario government through OPG [Ontario Power
Generation] on the Darlington SMR project, which is continuing apace right now.
And which obviously we are a partner also with OPG on the technology, along
with a couple of other jurisdictions as well. So we’re keeping a very close eye
on that.
A second SMR project is under
way right now. The Tennessee Valley Authority is undertaking that project at
Clinch River. I actually think our vice-president is down there right now. I
spoke to him this morning. He was touring Clinch River today.
So all of that means that
there is a very high degree of variability in what any sort of financial
projections would look like, given that we have some very real and significant
discussions about what that’s going to be into the future, including with the
Government of Canada.
The other thing I would say
though, I don’t think this is a negative thing at all. I actually really do
look at this — and Minister Hodgson and I have talked about this at length — I
really look at this as a space that is nationally unifying, where we have
different parts of the country that can align and agree on an objective, which
is producing nuclear baseload power generation for our citizens, zero-emissions
power using uranium from Canada, and very specifically from Saskatchewan, to
generate that zero-emissions power over not just the next couple of decades but
over literally a century.
And we’re going to see
nuclear power units with the life extensions at Darlington, at Pickering. You
know these units are going to be in service for 80 years. It’s a remarkable
thing. You know, obviously very high upfront though capital costs to get from
construction and degeneration, but you know, very manageable over time and fuel
costs. So that really has kind of been the historic challenge with nuclear
though.
So I would say, very
productive discussions with the Government of Canada. Very productive
discussions with partners, you know, keeping an open mind as to what these
relationships and partnerships are going to look like as we move to nuclear
power generation.
But that really makes it
impossible to provide any sort of highly specific number, given the fact that
we have not made these decisions yet, and we have not reached agreement on what
the structures are going to look like. So I think that would be just kind of on
the nuclear part. I’m not sure if Rupen or Troy want to add.
Aleana
Young: —
Thank you, Madam Chair. I asked for a cost estimate. This is a simple question.
There should be a pretty straightforward answer to this. Respectfully, like
what’s the working cost estimate for SaskPower? We’re talking about tens of
billions of dollars. Surely there’s a rough estimate that can be provided to
the people of Saskatchewan.
Hon.
Jeremy Harrison: —
Madam Chair, I kind of went through what I think are some very, you know, real
reasons why, between the work with the Government of Canada, work with our
partners — particularly given the fact that in the long term, nuclear is going
to be the primary baseload power generation source in this province — there are
a tremendous number of variables in all of that. I think, you know, I explained
some of them in detail during my last response.
But even with regard to
particular designs, I mean, we actually do not know what the actual price tag
is going to be, even on the BWRX‑300. I mean these are in progress,
first-of-a-kind projects. You know, what we know with nuclear as well is the
first of a kind, you know, it’s going to be significantly more expensive than
the nth of a kind, whether that be 9 or 12 or 15.
And those are only answers
that were going to become apparent as we partner with OPG on the BWRX project,
for example. We’ll have a clearer picture of what those costs are going to be
as these projects get closer to completion. And then we’ll have a better cost
estimate as well once we have an established supply chain. That’s what really
drives down cost in these nuclear projects, and they do in other parts of the
economy as well. You need to have an established supply chain, which is a big
part of what we have worked on as well. I’ll have a chance to probably talk
about a bit of that. I referenced some of it in my opening comments with regard
to our partnership with the industrial mining association, supply chain
association, who’ve done great work in this. But it’s how we capture that
supply chain as well.
But the other example of this
would be . . . Yeah, we’re going through a technology selection
process, and we’re not making any announcements until SaskPower concludes that
process and makes a recommendation.
But you know, there are two
competing designs in that space. AtkinsRéalis Monark design, really, you know,
hasn’t been completed as a design yet. We had some additional information
provided by the company, and I think they announced it publicly there, their
power rating assessment which just yesterday was released by AtkinsRéalis, 925
per reactor, which was, I think, a bit of a surprise to the industry.
And then you have obviously
the Westinghouse AP1000 design, which is a 1000- to 1100‑megawatt reactor
design, which is going to be deployed across the United States. There are
operating units in Vogtle right now. But there are going to be, you know, 10
more units at least which are being significantly funded and supported by the
national government of the United States, which is going to mean that there is
a well-established supply chain in that AP1000 space.
So what does that actually
mean for the cost per unit? Yeah, we don’t know. And that again is why it
really is very, very challenging for the company to make long-term assessments,
certainty with regard to cost, because they simply are not knowable costs.
Which is why we are paying very, very close attention to what’s going on at
Darlington, why we’re paying very, very close attention to what TVA [Tennessee
Valley Authority] is doing at Clinch River to the point where we literally have
our vice-president of nuclear on the ground right now in that jurisdiction,
having toured that facility today. Why we’re paying not just very close
attention, but working very closely with the companies who are proponents of
large-scale nuclear designs about what those costs are going to be as we go
forward, particularly on nth-of-a-kind units with an established supply chain.
So all of those things, you
know, reasonable people understand that because you have these unknowable parts
of the equation, we can’t give a specific answer. We’re working as hard as we
can to provide that certainty, and that certainty will be there when we are in
a position to make those decisions. But we haven’t made those decisions yet,
which means that we really can’t provide that.
Aleana
Young: —
Thank you, Madam Chair. I think the minister was clear. He doesn’t have a cost
estimate. He can’t provide one because he doesn’t know the cost. Saskatchewan
people are being asked . . .
Chair
C. Young: — Ms. Young, that’s not
what he said. He said they didn’t have cost estimates at this time because
everything . . . The question you asked is pretty futuristic,
actually based on projects that aren’t even in play or the supply chain.
So if you have questions that
are pertaining to the estimates and supplementary estimates that are before us
tonight, I suggest then you proceed.
Aleana
Young: —
Madam Chair, it’s too beautiful a day to be crabby. But I think the average
person would expect that the Government of Saskatchewan, that SaskPower would
have business plans. They would be presented to cabinet. They would be
approved.
The minister has said he is
unable to provide a cost estimate, and meanwhile people of Saskatchewan will
continue to pay, and he’s asking them for a blank cheque. That’s fine. I can
move on with some specific questions.
Chair
C. Young: — Minister, if you would
like to respond.
Hon.
Jeremy Harrison: —
Yeah. You know, politics is politics. And you know, obviously the member wants
to be political. Look, we’re here with a team of great officials here. And what
I’m really interested tonight in doing is talking of the hundreds of SaskPower
employees who are doing great work, who are not interested in political games,
who are interested in what their future is going to look like.
And we’re talking about real
people and real lives and real families whose decisions that are being made
here by these folks who have their best interests at heart and who think about
that every day. That is what we are here to talk about, and talk about the
future for those folks for our company and ultimately for the people of the
province.
Aleana
Young: —
Thank you. Yeah, the SaskPower employees who I do appreciate are also concerned
about the company-wide call telling them to tighten their belt, and that there
need to be cost savings found across the organization due to some of the
consequences of what we’re talking about here tonight.
Madam Chair, as it pertains
to the government’s full refurbishment project, what is the cost for that work
that the minister can provide? How much is the coal refurbishment project going
to cost?
Hon.
Jeremy Harrison: —
Sure. Well you know, we’ll have some of these folks maybe speak to some of the
details of that. But firstly what I want to say is just thank you to our folks
who have, you know, really had a high degree of uncertainty about what their
future was going to look like, particularly our employees who were working in
Estevan, who were working at Coronach, the UMWA [United Mineworks of America]
employees who were engaged on the mining side.
And predicated on the
unconstitutionality of those federal initiatives, we made the decision that was
in the best interests of the province, predicated on energy security first and
foremost but also on long-term affordability and reliability of our power grid.
Meaning that we were going to have one-third of our baseload power, which is
what comprises our coal firing, one-third of our baseload power generation;
that we were going to keep that power generation in service; that we were going
to have certainty on the fuel source, which is literally located within miles
of the plants themselves; that we know we have a multi‑100‑year
supply of that fuel source that we own, that the people of the province own.
I know what the cost is of
coal because we own it, and it’s zero. I know what the cost is going to be in
10 years because we own it, and it’s zero. I know what the cost is going to be
in 2050 because we own it, and it’s zero. And you know, we pay partners to do
the mining of that resource, but we have a very, very clear understanding of
what the cost of that resource, of that fuel source, is going to be for the
company out over the next 25 years.
And you know, we have taken
an all-of-the-above approach, but we were not going to shut down one-third of
our baseload and put that into a combination of intermittent renewals and
imported natural gas. That’s the option. Meaning we would be . . .
Right now I think we’re importing about 90 to 92 per cent of our natural gas. I
wish that wasn’t the case, but that is the case. We are very blessed in a lot
of ways with natural resources, but you know, low-cost gas is not one of the
areas. So we’re importing gas.
We would be making ourselves
entirely dependent on exports from outside of the province. We’re not going to
be doing that, so that was the policy rationale that we made with regard to the
coal life extensions.
[20:15]
And I can tell you this,
Madam Chair: 22 years in elected office now, I have never been so sure that a
decision is the right one than making the decision to extend the life of our
coal-fired power plants. I’ve never been so sure a decision’s the right one.
It’s the right decision for this province. It’s the right decision for the
company.
It’s the right decision for
our employees. Fourteen hundred of them were dependent on continuing in
operation with these facilities, many of whom are multi . . . I can
tell you this, too, having spent time at Boundary dam in Coronach, for generational
employees whose fathers worked there, whose grandfathers, whose mothers worked
at these plants, they committed their lives to producing power for this
province. And I have an enormous respect for them.
And, you know, I’ve said
before too, like, there are a lot of days in public life where . . .
There are a handful of days that really make up for a lot of the other days.
And when I’ve had the opportunity to go down to Coronach and Estevan and spend
time with our staff who do this work every day, those are the days that make up
for a whole lot of other days, and really inspirational.
So I am very proud of the
decision that we have taken. I’m very proud of the government. I’m very proud
of SaskPower. And I’m very proud of the work that’s being done right now on the
refurbishment project, including what I just announced earlier on with regard
to the returning to life of Boundary dam 4 which is a remarkable, really a
remarkable achievement.
And I might ask Gregg,
actually if you maybe want to come down and speak to some of the, some of the
details around that and speaking to the costs as well. Gregg can speak to the
cost of the Boundary dam return to service which I think will provide some indication
about what that path going forward is. And then we’ll maybe speak in a bit more
detail about the more macro elements around them. But I’ll turn it over to
Gregg.
Aleana
Young: —
Thank you. And pardon me, Mr. Milbrandt. It was a very specific question again,
Madam Chair. I appreciate the reminder of how we got here. I’m looking for a
figure, just a single number.
Hon.
Jeremy Harrison: —
You know, Madam Chair, that’s where we’re going to get to. But I want to make
sure that the employees who are watching here have a really good understanding
of the work that’s going in and also recognizing the work that the employees
have done. And also around that, we’ll be speaking to cost.
Gregg Milbrandt: — Thank you, Minister. Yeah, I’d like
to take some time today to obviously highlight some of the key work that’s
happened here at Boundary dam over the last six to seven, almost eight months
now restoring the operation of Boundary dam unit 4. So really from the fall of
2025 and the spring of 2026, SaskPower executed a targeted project intended to
return Boundary dam unit 4 to a safe, compliant, and operable condition
following extended lay-up and expiry of pressure equipment certification in
November 2024. The work was inspection driven and progressed on two parallel,
independent tracks: mechanical restoration and regulatory recertification.
The project is a culmination of Boundary
dam maintenance staff, other specialty groups within SaskPower, 28 external
vendors and service providers coming together for a combined nearly 62,000
labour hours to date. These groups have coordinated their efforts across
approximately 360 different work scopes under 40 operating permits, working in
close quarters to one another, and delivering the project with zero lost time
injuries.
Of the contracted services and material
spend, approximately 82 per cent of that was Saskatchewan-based, 15 per cent
within Canada, and 3 per cent outside of Canada. This relatively modest
investment focused on effort restoring up to 150 megawatts of dispatchable
baseload capacity to the Saskatchewan system. Compared to the time and capital
required to procure and install new generation, BD4’s
return provides strong near-term capacity value by leveraging existing
infrastructure and while meeting current safety and regulatory requirements.
So a little bit of background on BD4. So it was added to the system alongside BD3 in 1970. The two units comprise of what was known today
as B plant in Boundary dam, sharing a common control room and operating staff.
The unit operated reliably for SaskPower, undergoing routine maintenance and
planned capital injections over the course of 50 years. BD4’s
last major overhaul to the turbine/generator occurred in 2014, and the last
minor overhaul was completed in 2017.
Based on typical maintenance cycles, the
next minor overhaul window would have been completed in the fall of 2019.
However as the unit approached planned retirement decision, no further
investment was injected into the unit. The unit was operated from ’17 to ’19 in
its normal operating capacity, and was operated in the same manner for two more
years, despite not completing the regular two-year overhaul activities.
After a four-year run cycle, the unit
was transitioned to a low-use operating strategy. By end of ’21 BD4 was placed into lay-up mode and was operated only when
system conditions required it for emergency and backup needs, the limited runs
at reduced output. In October of 2022 one of the two boiler feed pumps failed,
and attempts to repair were not successful. Decision was made to de-rate the
unit from 150 megawatts to 65 instead of rebuilding both boiler feed pumps.
The unit remained in lay-up mode with a
65 megawatt capacity until the pressure equipment certification ultimately
expired in November of 2024. This necessitated a full inspection, repair, and
recertification prior to any sustained return to service.
Upon release of the Saskatchewan energy
security strategy, BD4 was identified as an obvious
candidate, a return-to-service investment that could be completed in a short
time frame with existing resources without long-lead components.
Planning and execution of the project
has been a collaborative effort across many internal SaskPower teams and
supplier community across Saskatchewan. The coordination of all this effort at
site has been managed by Jody Waloshin, as mentioned
by the minister, a senior Boundary dam management employee and a past co-worker
of mine and a key member of the Boundary dam facility through the course of his
career.
As the minister mentioned, you can’t
forget about the people. And Boundary dam is made up of many folks. And of
course, all folks across the facility participated in its restoration,
including mechanical maintenance departments, electrical maintenance, instrumentation
maintenance, the labs, B plant operation teams. Of course the admin staff,
utility folks, and many folks within the storage functions. Specialized groups
across generation also supported the repair and restoration, including the
combustion boiler turbine generator equipment, and they all had a steady site
presence throughout the project.
The project has received support from
many others across centrally based groups within the company including coal
modernization team, generation asset management, engineering south, quality
assurance, procurement, finance, project delivery, system tests, apparatus
maintenance, and various others.
As with any SaskPower project, our
unionized workforce plays a very key role in the success of the project. Our
various maintenance contractors, such as Balzer’s Canada, Aluma Systems, pull
from the union halls around the province such as the boilermakers, millwrights,
pipefitters, scaffolders, insulators, and others as well. And of course, lastly
and definitely but not least are IBEW Local 2067. Our IBEW staff are at the
centre of most of our internal workgroups and are a key part of our successful
execution from the first phase of the project to the last.
The return-to-service scope was driven
by inspection findings typical of an aging thermal asset returning from
extended lay-up. Work was prioritized to restore pressure boundary integrity,
rotating equipment reliability, protection-and-control system readiness
required for restart and regulatory approval.
Internal boiler inspections identified
several code-related deficiencies required to meet our quality management
program under TSASK’s authority. Corrective work
included more than 433 code shield repairs, approximately 40 tube cutouts, and
77 pad welds to restore the boiler pressure integrity. Verification activities
included non-destructive examination followed by a leak integrity test and
completion of mandatory fuel/interlocks in preparation for controlled firing
and return of the boiler to service.
The feedwater train was restored to
support reliable unit operation. Work included the condensate extraction pump
rebuilds and major work on the de-aerator after inspections revealed extensive
cracking at shell-to-head welds.
To reduce risk and satisfying regulatory
inspections, a remedy was revised from repair assumptions to replacement of the
affected de-aerator components. This included fabrication, engineering review
approval, controlled insulation, and post-work inspection and testing. Boiler
feed pumps and their 4160‑volt motors were fully rebuilt as well. Due to
obsolescence this included some reverse engineering and custom fabricated
components, followed by functional checks to confirm readiness for operation as
well. The work on the feed pumps was also a significant part of this project as
the health of these assets were one of the major contributing factors to
preventing BD4 from recertification and continuing to
run beyond November 2024.
The high-pressure piping and safety
system programs include the inspection of our main steam lines, high-pressure
piping to confirm continued fitness for service, and to satisfy the TSASK certification requirements. And of course additional
testing will follow once the unit reaches full load.
Steam turbine mechanical systems. Work
included rebuilds of turbine stop valves, control valves, bearing inspections,
oil system cleaning and restoration. As commissioning approached, the turbine
was placed on barring gear to address shaft bowing risk, which follows extended
lay-up periods. Mandatory verification included routine trip tests to confirm
mechanical protection functions prior to synchronization. Additional testing is
required after synchronization so the unit can return or can be operated safely.
Generator protection readiness was also
confirmed through a series of inspections, and functional tests. Work included
attention to generator hydrogen coolers, completion of our generator air leak
tests, verification of excitation and stability functions as well. Protection
and interlock readiness was also validated through mandatory protection system
trip tests and fuel/interlock verifications. And some additional testing
mandated by the North American reliability corporation will be done once the
unit has synced to the grid.
Work was also completed as on key
combustion support equipment to enable stable firing and safe operation. Scope
included repairs on pulverizers, combustion
components, pulverizer motors, coal piping, and
burner components. Pulverizer inspections, routine
inspections, and rebuilds will continue as part of ongoing maintenance on the
unit once it’s back in service. Routine maintenance was performed on all
combustion air fans and their corresponding 4160 motors, including extensive
work on the primary air fans.
BD4 control system was equipped with an
older generator control, which is no longer in use in the rest of our fleet.
Significant effort went into inspecting and testing the control system
components, verifying spares, and in some cases sourcing replacement components.
The control system is in working order right now, and there are sufficient
spares to ensure reliable operation in the near term.
In parallel the mechanical components
operations staff completed their own readiness activities including start-up
and emergency procedure reviews, requalifications
where required, and commissioning support to ensure the unit could be returned
to service in a controlled manner.
As for next steps, the team successfully
established fire in the boiler, as mentioned, this April 17th and is currently
flushing and refilling. And we are firing the boiler here today. Once that unit
has reached temperature, we will begin to emit steam through the valves and
begin to stretch out the turbine. Once the unit then rolls off and we reach
3,600 rpm [revolutions per minute], equipment will be operating within expected
parameters. We will officially connect BD4 back to
the system. At that point online tests will commence which will complete the
recertification of the unit.
In conclusion BD4’s
return-to-service project is a significant milestone. Over 62,000 labour hours
were invested to complete inspection-driven boiler and pressure part repairs,
address critical feed water and turbine risks, and to re-establish electrical
protection readiness while maintaining zero lost-time injuries. The major
repair, inspection, and certification activities and commissioning is under
way. BD4 is targeted to return in May,
returning 150 megawatts of baseload power to the system and delivering
meaningful near-term capacity value using existing infrastructure.
Aleana
Young: —
Excuse me, Madam Chair.
Chair
C. Young: — Can you find an answer to
the member’s question in all that.
Hon.
Jeremy Harrison: —
Yeah, so that’s precisely what we’re doing. So I just want to say thanks,
Gregg, for providing the update. In all of that, Madam Chair, we’re
$7.6 million to return 150 megawatts of coal-fired power to the grid — 150
megawatts for $7.6 million. And I would say compare that, Madam Chair, as
well . . .
Aleana
Young: —
Madam Chair, that wasn’t my question. I’m sorry, Minister. My question was
about the coal refurbishment project as a whole. In its submission to the
Saskatchewan rate review panel SaskPower said that external consultants had
estimated the cost at $2.6 billion.
And now I understand
SaskPower has hired a number of external consultants — Hatch engineering, Klohn
Crippen Berger, Rockford Engineering. I also appreciate that board approvals
are going forward at the moment for all the coal units, with BD6 going forward
in March 2026, Poplar River 2 in June, Poplar River 1 in September, and Shand
in December of this year.
So my question was what is
the total cost of the coal refurbishment project undertaken by SaskPower? Is it
the $2.6 billion that SaskPower put in its submission to the rate review
panel? Yes or no?
[20:30]
Hon.
Jeremy Harrison: —
Thanks very much, Madam Chair. Appreciate it. So in the interrogatories we
obviously provided detail on that answer which the member is quoting. So
SaskPower provided that information very proactively, Madam Chair. And that’s
over the course of the entire project.
So that includes the
refurbishment of Boundary dam 4. It includes the life extensions for 5, for 6,
for Boundary dam 0, which is what we call the overall building and
infrastructure that is common to all of the units for Poplar River 1, for
Poplar River 2, for Poplar River 0, which also is the overall facility-shared
spaces, and for Shand and for Boundary dam 3 as well. So that includes the
entire project. And I would say by way of comparison, $2.6 billion for
over 1500 megawatts of power.
We are estimating right now
if we were to build another Aspen power station, which we’re going to hit
budget, I think it’ll be about $1.7 billion just on the capex [capital
expense] at Aspen. We need four more of those. We need four more Aspens to replace
the 1528 megawatts of coal-fired generation. We’re estimating for one of those
four plants, $2.5 billion — for one. We need four. Our coal refurbishment,
$2.6 billion. I think everybody gets the math.
Aleana
Young: —
Thank you, Madam Chair. So to be crystal clear, that $2.6 billion, that is
the total cost that the minister is standing behind for the entirety of the
coal refurbishment work?
Hon.
Jeremy Harrison: —
That is the estimate that we have been provided. That’s the planning number
that we’re using. So we’re, you know, going to be working through that
obviously over the course of the rebuild. We’re going to do everything we can
to keep that number at that $2.6 billion range.
But like I said, when you are
doing the comparative analysis, $2.5 billion for a gas plant that you
would need four of to replace our entire coal fleet that we’re refurbishing for
2.6. And in addition to that I would say, Madam Chair, we know where the coal
is coming from, we know what it costs, and we know who owns it because it’s
owned by the people of the province.
Any new gas generation that
we’re bringing onto the grid — and we are going to be bringing more gas
generation onto the grid — we’re not producing that gas here. We’re having to
import that gas. And I would say as well as far as the commodity price risk going
forward — which is why we have taken an all-of-the-above approach on power
generation — but the commodity price risk is a real thing. You know, we’ve had
the advantage of having basically landlocked natural gas. I mean that’s been
the advantage in keeping the price down.
What we are seeing now though
— and I would say that this is a really a very positive thing for the country —
but the ability to move natural gas to the coast, where it’s liquefied, and
then export it from Canada into other jurisdictions, meaning you’re getting the
global commodity price at that point rather than the landlocked western North
American price, which at this point right now is about . . . it’s
over 10 times higher. Depends. I didn’t look at the LNG [liquefied natural gas]
price today, but it’s been around $18 an MMBtu [million British thermal units]
for the last number of weeks.
So $18. If we were paying the
world price for natural gas, if we were importing at $18, which is the plan
that the members . . . I’m not going to get into their plan because
it’s not really relevant, but if we were paying the $18 multiplied . . .
Aleana
Young: —
Sorry, Madam Chair, I just want to go back to something the minister said.
Pardon me. You said that the $2.6 billion was the estimate that you were
provided. Is this the figure that was provided to you by those three consulting
firms that I listed?
Hon.
Jeremy Harrison: —
That’s what we submitted to the rate review panel. That’s the estimate that we
have been provided, and that’s the planning assumption that we’re working off
of.
Aleana
Young: —
And forgive me, who were you provided that estimate by?
Hon. Jeremy Harrison: — I’m not
sure if that was a . . . And sorry. We can have a discussion here.
All right. Thanks. Thanks
very much, Madam Chair. So what I can tell the committee with regard to the
planning estimate, the $2.6 billion referenced and submitted as a part of
the rate review process, that was a number that SaskPower and CIC worked on
collaboratively together and provided.
I can talk about some of the
assessment work that’s being done as well, Madam Chair. So I’m going it turn it
to Gregg maybe to speak to that.
Aleana
Young: —
Okay, that’s sufficient, Madam Chair.
Hon.
Jeremy Harrison: —
Well this is the question.
Aleana
Young: —
I’m curious what level of estimate is
the $2.6 billion? And how many steps of estimates are left in that
process?
Hon.
Jeremy Harrison: —
Thanks, Madam Chair. We’re just going to talk to the companies who are doing
some of the assessment work as well, which I think is important for the
committee to understand also.
Aleana
Young: —
Madam Chair, I’d be happy just to accept their names, the company names. I
don’t need their bios. I can google it at a later time.
Hon.
Jeremy Harrison: —
What’s that? I didn’t hear that. Sorry.
Chair
C. Young: — She just wants to you to
provide the company names.
Gregg
Milbrandt: —
Sure. So the folks that are working, or
the companies that are working currently on the assessments, this includes the
assessments beginning with BD6 and BD0 system, as mentioned, are currently in
flight. Our Poplar 1, Poplar 2, have also started at Shand and will be
continuing back to BD3 — sorry, 3, 4, and 5. Those are Hatch, so they are
supporting the assessment work; KCB, which is Klohn Crippen Berger, which is
supporting the work; and then Rockford Engineering out of Regina is also supporting
the work.
Aleana
Young: —
Thank you. So those same three firms that I’d listed?
Gregg
Milbrandt: —
Yeah, they’re supplying the assessment work.
Aleana Young: — Yeah, great. And for the level of
estimate, what level of estimate is being used for that $2.6 billion? Are
we using phase 3 estimates? Phase 4? If not, when will phase 4 estimates be in?
What impact do you see them having on that figure? And if there is an impact,
will an updated figure be provided and when?
Hon.
Jeremy Harrison: —
So I’m going to ask Rupen and Gregg to maybe speak to that.
A
Member: — Your mike is to your
left.
Rupen
Pandya: —
Oh, I am sorry. Oh my goodness, my apologies. My apologies. Rupen Pandya,
president and CEO of SaskPower. So the estimate that’s provided to the
Saskatchewan rate review panel, the 2.629 that the minister has referenced
that’s included in the interrogatives is a class 5 estimate — that’s plus 100,
minus 50.
And I think, Member, not to
take any more time of yours, but just because you had already referenced the
process for each of the assessments, that’s also laid out in the interrogative
as well.
[20:45]
Aleana Young:
— Thank you. And in regards to Hatch, KCB, and Rockford, recognizing you had
three firms and you have a figure of $2.6 billion, is that the figure that
each of those firms provided to SaskPower? Or did they provide a different cost
estimate? And if so, what cost estimate was provided by each firm?
Rupen Pandya:
— Thank you. So Hatch, KCB, and Rockford are doing current estimates. And so I
think the interrogative lays out that each of the generators will be going
through detailed assessment. And as that detailed assessment occurs, the class
of estimate will move from a class 5 to class 4, ultimately a class 3 estimate.
And typically a class 3 estimate is the estimate that we’ll use for
construction, a major construction operation.
Aleana
Young: —
Thank you. So when are class 4 estimates expected for each of those units?
Rupen Pandya:
— Thank you for the question, Member. So the class 5 estimates would move to
class 4 estimates on BD6 and BD common. That work is currently in governance.
So there’s a coal modernization work team that would then escalate it to an
operations team inside of SaskPower that would escalate it to an executive team
that would escalate to CIC and ultimately up to cabinet. And so that’s
currently in governance. This, by the way, is all included in the Saskatchewan
rate review panel interrogative.
The movement from a class 5
to a class 4 estimate for PR0 [Poplar River 0], which is a common plant, and
PR2 will be completed in April of 2026. It’s currently 60 per cent complete.
PR1, that assessment is to be completed in September of 2026. It’s 15 per cent
complete. Shand common and Shand 1 assessment to be completed in December of
2026. It’s 5 per cent complete.
And then ultimately we’ll
return back to BD3, which is our carbon capture facility; BD4, which has just
had first firing; BD5 for condition assessments to be completed in April of
2027.
Aleana Young: — And as
those later estimates come in, updated costs will be provided publicly?
Hon.
Jeremy Harrison: —
So thanks, Madam Chair. Thanks to the officials. You know, obviously there is a
governance process, Madam Chair, which you are well aware of, where the
SaskPower board would provide their consideration, contemplation, and approval.
There would be a process with the CIC board as well, Madam Chair.
And then the public
reporting. There’s a number of different mechanisms for public reporting but I
would say that, you know, one of the most obvious is through the annual report
process, which last year we did in Saskatoon. Really looking forward to this
year. We’re going to be doing that in Meadow Lake. The annual reports are going
to be released, which I had announced as a part of the annual reports last
year.
And I can tell you the
community is very, very excited and looking forward to having Crown CEOs
meeting with the city and with our First Nations leadership as well, and being
able to actually see first-hand — and I know Rupen and others have already — but
see first-hand some of the great projects under way, including, which I have
not had a chance to mention yet, the biomass power facility in Meadow Lake,
which has been led by the Meadow Lake Tribal Council. Done a really remarkable
job. First of a kind in Saskatchewan. Putting baseload power, biomass
generation onto the SaskPower grid for the first time.
So annual reports, that will
be done this year in Meadow Lake.
Aleana
Young: —
Thank you. In terms of the public reporting of potential capital cost increases
as that estimates process moves forward, am I hearing the minister say that
will be provided during annual reports this year? Or is he updating us on the
fact that annual reports will happen this year? I’m unclear. I’m looking to
find out when, if costs change as we move through the phases of estimates for
the work, when that information will be made available to the public and the
rate review panel.
Hon.
Jeremy Harrison: —
Yeah. Thanks, Madam Chair. Just to address the member’s question with regard to
annual reporting, obviously there are annual reports that we do every year.
Last year we did the annual reports in the city of Saskatoon which, you know, I
think was a really useful endeavour and event. This year the annual reports are
going to be in the city of Meadow Lake. That is where we’re going to be
releasing the annual reports. It will be the opportunity at that point for, you
know, questions with regard to the annual report there.
Aleana
Young: —
Thanks, Madam Chair. I’d note for the record that I didn’t get an answer to my
question, which was quite specific.
Hon.
Jeremy Harrison: —
Sorry, what was . . . Sorry, I just heard the question about the
annual reports. What was the other question?
Aleana
Young: —
The question, Minister, was as estimates move through their phases from phase 5
to phase 4 to phase 3 and there’s updated, more specific figures for capital
costs associated with this project, when will those figures be made available
to the public? That was the question. I’ve asked it now three times.
Hon.
Jeremy Harrison: —
Yeah, and I think I’ve responded to that, Madam Chair, as far as the annual
report process, how that works, how the governance process works as well with
regard to deliberation on the decisions. And you know, we haven’t obviously
made any of those decisions yet beyond the estimates that have been done and
the assessments that are under way right now.
Aleana
Young: —
Thanks, Madam Chair. I think I’d just note before moving on, because it’s clear
the minister isn’t prepared to answer this question, that I think that’s
important information to be provided to the public as well as to the
Saskatchewan rate review panel as they’re evaluating not one but two rate
applications.
And they have a duty to
fulfill to the Saskatchewan people as well as to the minister, to CIC, to
cabinet in terms of how to maintain the financial health of SaskPower. And if
they don’t have information in regards to essential capital costs, it’s challenging
to do that. I would hope that the Government of Saskatchewan isn’t making, you
know, 25‑year capital decisions without intending to make that
information public.
Hon.
Jeremy Harrison: —
Well what I would respond, Madam Chair, we have an incredibly professional
management team at SaskPower who do a great job. And I think that our team at
SaskPower who are watching right now know that we have a great team who really
do give incredible effort and give the best advice that I think a minister or
CIC board or the SaskPower board, who are responsible for the governance
decisions, can possibly get. And I have a great deal of faith in our team to
make those right decisions, to make those evaluations.
And then we obviously will be
very accountable through, you know, forums like estimates here tonight or
annual reports, questions in the House. There are many, many ways that we are
very happy to talk about the great work that SaskPower is doing.
Aleana
Young: —
Thank you. Going back to those external consultant reports, was the capital
estimate provided by each of those three consultants $2.6 billion dollars,
or was it something higher?
Hon.
Jeremy Harrison: —
Yeah, well we’ll take a second. I think the member has misunderstood some of
the testimony.
Aleana Young: — Sorry,
Madam Chair, can the minister clarify what I misunderstood? It was a specific
question about the three consultants that his officials said provided that
capital estimate. I’m just looking to see if that number matches what SaskPower
has put out publicly, and if the figures provided by each of those three
consulting firms can be verified, if it was $2.6 billion or if it was
higher or if it was lower.
Chair
C. Young: — You can wait for the
minister’s answer on that one.
[21:00]
Hon.
Jeremy Harrison: —
So thanks, Madam Chair. And thanks to the team for providing advice as well. I
think the member is basically referencing question 36 from the interrogatories
of the SRRP [Saskatchewan rate review panel]. So what I can say — Rupen had
kind of addressed some of this earlier — with regard to the companies cited
that are doing the assessments, that is entirely different than the estimate
that we had talked about. And that was included as a part of the SRRP
responses.
So Gregg had talked about
those specific companies. With regard to the CIC and SaskPower estimate at the
$2.6 billion number, that was confirmed by Hatch engineering, who did the
confirmation. The work was done by CIC and by SaskPower. But there’s also, in
that question 36, a number of different elements of the question which, you
know, we can get into as well including some of the elements around
transmission. And I know that that’s . . .
Aleana
Young: —
Thanks, Madam Chair. I don’t have questions about transmission at this point.
Thank you. I do appreciate it. We only have about an hour left and I do have
some questions I’d like to get through, respectfully, Madam Chair.
Hon.
Jeremy Harrison: —
I would just say this, Madam Chair. I know I’d been getting, you know, a number
of text messages in, and I thank the staff at the company for what have been
very kind words. Overly kind words I would say, Madam Chair.
But you know, one of the
areas where I know there’s a lot of interest is around what the long-term plan
is given the investment that we are making — $2.6 billion into the coal
life extension — and how that positions us with regard to baseload dispatchable
power and, by implication in the longer term, with regard to our transmission
putting Saskatchewan at that centre of the North American power grid, Madam
Chair.
So you know, we are going to
be making that significant investment. I think it’s important. We’ve talked
about the northern and southern Saskatchewan . . .
Aleana
Young: —
Madam Chair, that’s great. At this point I appreciate it. I don’t have
questions about transmission at this point. I do have a question about the
2.6 billion. I’m wondering if that accounts for all capital or if there’s
ongoing capital investments that will be part of . . . Forgive me.
I’m not sure if SaskPower calls it sustaining capital or sustainment capital. I
can’t remember which term you use. But I’m curious if that $2.6 billion is
all capital or if there’s other capital spending for this project being
contained within that category.
Hon.
Jeremy Harrison: —
So just to clarify, is the member asking about transmission?
Aleana
Young: —
No, I’m not.
Hon.
Jeremy Harrison: —
Oh.
Aleana Young: — I have
not asked about transmission, sadly.
Hon.
Jeremy Harrison: —
Thanks, Madam Chair. So I’m going to ask Troy to maybe speak to sustainment and
life extension capital just so there’s some clarity with regard to the
question. Because I think there probably would be folks who would, you know,
have some questions around that. So I will turn it over to Troy just to maybe
set the context.
Troy
King: —
Thank you, Minister. So SaskPower, on all of our generation units, will have
both sustainment work and potentially life extension work. So that sustainment
work is happening right now on our coal units, it’s happening on our hydro
units, it’s happening on our gas units. So we regularly do that. For example,
overhauls on our coal units — every 24 months we need to do a major overhaul on
them. And we call those capital sustainment. So all throughout the life cycle
of the asset you’re doing sustainment.
Life extension is different.
That is when you’re taking the life from what you anticipate and moving it to a
different date. So that’s a much larger investment.
So back to the question. Yes,
they’re different. The 2.6 billion is referring to the life extension one.
There will also be sustainment capital spend on coal and on gas and on our
hydro units.
Aleana
Young: —
Thank you. Are you able to provide figures for the sustainment capital for the
next five years out, specifically for coal?
Hon.
Jeremy Harrison: —
We’ll take a look. I mean what I would just . . . I’ll maybe ask the
officials if they want to see if we can compile some data. But you know, just
kind of underline, I mean I think Troy explained
well.
So you know, sustainment
capital is things like maintenance, which you’re doing on all of your existing
units anyway. I think what the member is trying to get at is that there’s, you
know, an additional cost with sustainment. Of course there is, of course there
is. There is with any power generation source. And we want to make sure that we
are providing the appropriate degree of resource for sustainment to make sure
that we’re taking care of the assets that we have. And really that is, you
know, a lot of the work that the folks who are watching here tonight do, and
which we’re deeply grateful for because they do a great job of it.
So you know, I think that is
probably something. I can turn to Troy then with regard to the sustainment
costs. You know, I’m not sure how detailed we have it broken down over the next
couple of years, but that’s something we can maybe speak to. Or Rupen, if you
wish. Okay.
Troy King:
— Yes. No, we don’t have a breakdown from that. Right now our capital spend
dollars that we have is really a blend of both. So we haven’t broken them down
between sustainment and life extension.
Aleana
Young: —
And forgive me, Mr. King. Is that typical?
Troy King:
— Actually yeah. So capital is capital. So generally speaking, from a finance
perspective, we look at it from a . . . it’s either capital or it’s
going to be operating. The engineers will often take a different view of it.
They have different splits that they look at. But when we put together our
business plans, we generally don’t differentiate between them. We just have
capital and operating costs.
Aleana Young: — Thank
you. So for a casual observer, how would someone on a go-forward basis be able
to identify or tease out which costs are capital and which are sustainment? Is
this something that SaskPower breaks out in its public-facing reporting?
Troy King:
— So right now I think if you look in SaskPower’s annual report we’ll generally
break down our capital by what we’ll call sustainment and then we’ll have
growth. And growth is generally new assets. The sustainment spend includes both
that regular maintenance and it’ll include life extension. So whether that’s,
again, for gas, coal, or hydro units, so we don’t generally break those out.
Aleana
Young: —
Thank you. So as we look out to the future, with that $2.6 billion number,
should it change — go up or down — would that figure then be inclusive of that
sustainment number as well, or just the straight capital? That’s just new?
Troy King:
— Our annual reporting is generally historical, is what you’ll see. And so, as
I said, it’s blended. Right now we have not split those costs out in the past.
Aleana
Young: —
Thank you very much. Moving on, I’d like to talk briefly about some of the
fundamentals of the application before the rate review panel right now.
SaskPower, as recently as the presentation to the panel a couple weeks back,
confirmed that their application includes the assumption that there will not be
industrial carbon pricing on the electrical sector in Saskatchewan.
Now the Minister of the
Environment, Minister Rowden, confirmed for the . . . gosh, I can’t
remember which committee, but confirmed for the Assembly that her ministry is
negotiating to bring back control of the OBPS for industrial carbon pricing for
the Government of Saskatchewan and intends to apply it on the electrical
sector.
So I’m curious both what
impact that will have on SaskPower’s financials and rates going forward, as
well as how SaskPower is indicating publicly that their planning is based on
the assumption that there is not industrial carbon pricing going forward. But
the Government of Saskatchewan is negotiating with the federal government to
reapply industrial carbon pricing to the electrical sector. Can you provide
some clarity?
The minister is laughing, but
it’s a question with significant cost impacts.
[21:15]
Hon. Jeremy
Harrison: —
I can assure you, Madam Chair, there are few topics that I am more excited to
talk about in the Chamber and in committee than the carbon tax. There are few
topics I am more excited to talk about, and getting rid of the carbon tax,
Madam Chair.
So you know, I think that the
record of this government in fighting the carbon tax is unmatched by any other
government or political party in the entire country, going back to the day that
the carbon tax was announced by the former prime minister in the House of
Commons, during which there was a meeting of ministers of the Environment
occurring at the exact same time, Madam Chair. And our representative, minister
of the Environment at that time, was a gentleman who is now the Premier. And
what he did immediately was clearly express the opposition to a carbon tax to
the entire country, sitting at that table, and he left. And we have been
fighting the carbon tax since that very day.
In fact the Premier really
predicated a lot and put a lot of effort into fighting the industrial carbon
tax, the consumer carbon tax as well, for which we were vociferously criticized
by them, by the opposition, at every step of the way, Madam Chair.
Aleana
Young: —
No. Madam Chair. Madam Chair. Madam Chair, can we save that for question
period?
Hon.
Jeremy Harrison: —
And, you know, look, I mean the member wants to . . .
Aleana
Young: —
Madam Chair, it was a question about a specific answer given by a minister of
the Crown. So, Minister Harrison, was Minister Rowden mistaken or did she
mislead the committee?
Hon.
Jeremy Harrison: —
Oh my goodness, really?
Aleana
Young: —
No, I’m looking for clarity. I was in committee, and Minister Rowden told me
that her ministry is actively negotiating with the federal government to bring
back industrial carbon pricing on . . . You can check . . .
The minister is laughing.
Hon.
Jeremy Harrison: —
I am laughing.
Aleana
Young: —
You can check Hansard. What we
say in committee matters. It has legal implications. Madam Chair
. . . No, it’s a serious question, Madam Chair.
Hon.
Jeremy Harrison: —
You know what, I actually do find this really quite
remarkable to have the New Democratic
Party of Canada, Saskatchewan section, criticizing this . . .
Aleana
Young: —
Madam Chair. Madam Chair, this isn’t . . . Madam Chair.
Chair
C. Young: — Let’s take the politics
out of these estimates, and let’s ask one question at a time. There were three
questions in your response, and I know that because I’ve written them down. But
if you want to start with one, that would be better.
Aleana
Young: —
Madam Chair, what impact will be . . . Let me back up; the minister
is looking too happy with that start. The Minister of Environment indicated
that the Government of Saskatchewan is negotiating to bring back industrial
carbon pricing for Saskatchewan, including on the electrical sector. She said
this in committee, Madam Chair. It’s in Hansard. It’s a matter of
record.
Hon.
Jeremy Harrison: —
Well, Madam Chair . . .
Aleana
Young: —
SaskPower has indicated that their application to the rate review panel and
their business planning is predicated on the belief that there will not be
industrial carbon pricing going forward.
How can both of these things
be true?
Hon.
Jeremy Harrison: —
Well I think there were about three questions in there as well, Madam Chair.
Aleana
Young: —
No, there was one question. Madam Chair, there was one question. There were two
sentences and a question.
Chair
C. Young: — There was rambling, then
a question. So let’s . . . a simple, straightforward question, and if
the minister chooses to answer.
Hon.
Jeremy Harrison: —
Well I would like to respond without being interrupted, Madam Chair. So you
know, look, again I get politics. I’m trying to talk to our employees from the
company, like I said, many hundreds of whom have spent their evening watching
because they wanted to garner information about what the path of the company
is. And you know, I don’t think that they’ve been informed by the questions
opposite, who have been entirely predicated on politics.
What we are talking about is
our public, our people, and what we are going to do and are doing as a company
to build our future for this company, and by extension, create the conditions
for economic growth and for opportunity for people in this province.
And a key part of that, Madam
Chair, has been fighting the carbon tax for the last decade. Since Justin
Trudeau brought the carbon tax forward, we have been fighting the carbon tax,
including taking it to the Supreme Court on the consumer carbon tax side,
removing the consumer carbon tax from people’s bills a couple of years ago, far
before any other jurisdiction did that and before Prime Minister Carney agreed
with us upon becoming Prime Minister and then removing the consumer carbon tax
from the entire country, which was the right call. We had been fighting it from
day one, including removing it prior to Prime Minister Carney becoming Prime
Minister.
Which is exactly what we have
done as well with the industrial carbon tax. We took that tax off of SaskPower
bills last April, and it is not coming back. And we have been very, very clear
about that. Who has not been clear have been the opposition because their
entire plan . . .
Aleana Young: — Madam
Chair, come on. Come on, Madam Chair.
Hon. Jeremy Harrison: — Is
predicated on bringing the industrial carbon tax back. So, Madam Chair, to that
point, you know, we’re . . .
Aleana Young: — Madam
Chair, that’s ridiculous. This is not . . . Madam Chair, come on.
Hon.
Jeremy Harrison: —
I mean, getting . . . I gave the opportunity for the member to answer
and ask a question, and I would like the opportunity to conclude my response as
well on this.
The industrial carbon tax is
not coming back in Saskatchewan. That is the answer.
Aleana Young: — Thank
you, Madam Chair. So then why is the Government of Saskatchewan pursuing carbon
pricing on electricity?
Hon.
Jeremy Harrison: —
I literally don’t know where this is being made up from.
Aleana
Young: —
I’m not sure if that’s a question for me. It’s your cabinet colleague, the
Minister of Environment.
Hon.
Jeremy Harrison: —
Well look, I mean the member again can play politics all that she wants. I mean
this is silly. I mean everybody in the province knows that we have
fought . . .
Chair
C. Young: — We are in SaskPower
estimates. If you want to save that for another time when you’re with the
Environment minister’s estimates, be my guest. But right now we’re on SaskPower
estimates.
Aleana
Young: —
Right. And, Madam Chair, SaskPower . . .
Chair
C. Young: — And you’re referring to
the Minister of Environment, which is not part of these estimates.
Aleana
Young: —
Right. And, Madam Chair, SaskPower has indicated that their business planning
going out, their application to the rate review panel, which will have an
impact on the constituents of every member present, on the 557,000 customers
that SaskPower serves . . . And if the Government of Saskatchewan is
— which they are; the Government of Saskatchewan is pursuing higher-emitting
assets for baseload generation and applying industrial carbon pricing on them —
that will have significant cost implications for the people of Saskatchewan.
It’s very material to SaskPower, Madam Chair.
If the minister doesn’t want
to answer questions about why there’s a contradiction between what his
colleague said and what SaskPower has said publicly in their application to the
rate review panel, that’s fine. We can move on. But this is very pertinent to
the rate implications for customers of all classes in Saskatchewan.
Chair
C. Young: — Minister.
Hon.
Jeremy Harrison: —
Well thanks. Thanks, Madam Chair. I think, like I said, this is silly. I mean
everybody in this province knows that this government has fought the carbon tax
from day one and were the subject of vociferous criticism from the NDP [New
Democratic Party] for fighting the carbon tax.
Aleana
Young: —
Madam Chair, it’s not criticism. I’m looking for clarification.
Hon.
Jeremy Harrison: —
That is a matter of public record. You know, the member can constantly
interrupt and be political and kind of make silly political arguments. We are
here to provide information for the public. We are here to provide information
for our hard-working SaskPower staff and officials who go to work every day and
aren’t playing silly political games, who are there to make sure that the power
works for the province.
And the public deserve to
know the industrial carbon tax isn’t coming back. Because we have fought that
industrial carbon tax. We’ve taken it off their SaskPower bills. And there’s
only one party in this province that will put it back on, and it’s them.
Aleana
Young: —
Okay, Madam Chair, that’s ridiculous.
Chair
C. Young: — The minister just
answered the question. Let’s ask the next one.
Aleana
Young: —
Madam Chair, there’s only . . .
Chair
C. Young: — That it’s not coming
back.
Aleana
Young: —
Pardon me?
Chair
C. Young: — The minister just
answered the question.
Aleana
Young: —
Okay. I
would like to in my remaining time ask a few questions about nuclear. How is
the Government of Saskatchewan and how is SaskPower anticipating financing the
first SMR?
Hon.
Jeremy Harrison: —
So, you know, happy to answer this question. You know, I think we had some
opportunity to talk a bit about this earlier in estimates. But I think it’s
really a very, very important discussion. And it’s one where there’s an
evolving discussion as well. And I alluded to elements of that.
You know, just earlier today
I think I said we had a great meeting with the Canadian Nuclear Association.
They have been working on a policy paper that they’re going to be releasing in
the relatively near future around models for nuclear power plant financing and
what’s happening around the world, what are the trends, what are the
opportunities.
I would say as well this has
been a very live discussion between provinces, territories, and the Government
of Canada as well. The Government of Canada will be releasing a nuclear
strategy in the relatively near future. I think we kind of have a date, but I’m
not going to announce that. That’s their news to announce.
But, you know, I would say
that we’ve had significant input. I think we feel that we’ve been heard as a
part of that process, not having seen yet the finally completed document. But,
you know, there has been a lot of work going on across the country in that
nuclear space. And I think there are going to be a number of options and
opportunities that are going to exist for proponents of nuclear power projects
across the country to really examine in detail.
You know, we have a great
team at SaskPower, and we really are building out the capacity at the company
as well in this space, in the nuclear space, being a new nuclear operator. So
we are working hard at building that capacity, building out our team. You know,
I would say that we have some great advice on that frontier. Rumina Velshi,
former CNSC [Canadian Nuclear Safety Commission] Chair, is a member of the
SaskPower board. You know, appreciate her being prepared to serve in that
capacity. We are working really hard at building the capacity within the
company.
You know, I referenced in my
opening remarks that we are working through the siting process on the SMR
project. We’ve narrowed that down to a couple of sites in the Estevan area
which we are assessing. We’re going through the large-scale nuclear technology
selection process right now as well, and we’ve been meeting with proponent
companies, SaskPower officials have been meeting with proponent companies in
that regard.
But, you know, I’ve been very
clear as well, and like I said, criticized for it. Fair enough. But we are
keeping a very open mind on what financing would look like for either it be an
SMR project, whether it be a large-scale nuclear project. There are different
models that are being used around the world right now. I referenced Sizewell C
in the UK, which was one of them.
We have Canadian pension
funds. This is actually an interesting dynamic that’s happening. Canadian
pension funds are actually investing into nuclear power projects around the
world but not in Canada. And, you know, I view that as being something that we need
to rectify. You know, Canadian pension investments I think would be well put in
long-term investments into nuclear power generation in the country. So we’re
going to be working through all of that.
I really have been very, very
clear — I was earlier; I will be again right now — that we need to have
Indigenous equity ownership as a part of nuclear power generation going
forward. We’ve put a lot of work into that, and I give the First Nations
Natural Resource Centre of Excellence a lot of credit.
Sheldon Wuttunee is the
leader of the organization. A lot of credit for the degree of engagement. You
know, we’ve been working together very, very closely on what that path is going
to look like and, I would say, have had tremendous support from First Nation
communities through the Centre but also through individual nations, through
tribal councils. I think we’re well advanced on the discussions with the
proximate nations in the Estevan area. Those have been ongoing for some time
now as well.
So all of these
. . . And I think as well we actually have an opportunity to create
what could be very well a model for that financing, particularly the Indigenous
equity component. And that would likely . . . there’d be an element
of partnership with the federal government on that as well.
You know, we’re going to
continue to be diligently working on that. We are committed to moving to
nuclear power generation as the baseload option here in this province as we
move to a net zero grid by 2050. Nuclear is going to be a huge part of that.
And the company is deeply engaged in that process.
[21:30]
Rupen
Pandya: —
Thanks, Minister. So maybe I’ll just pick up on that. So there’s significant
work under way. On the financing question specifically there’s work that the
Government of Canada, as part of their strategy . . . I won’t
announce their strategy. Minister, I’ll take your lead. But certainly financing
will be one of the top pillars in their approach.
And the question is, you
know, how does a balance sheet risk of new nuclear, how will that be shared
across the country? And the minister’s already referenced Sizewell C, where the
Government of the UK has taken on balance sheet risk with respect to new nuclear.
I think I won’t speak on
behalf of the minister. I know I’ve heard the minister and the government say
that they will. There’s an expectation, given the compliance costs with respect
to decarbonization in Saskatchewan, that there’s an expectation that the
federal government will come to the table with taxpayer support with respect to
new nuclear projects. And I think that that would be part of the mix of going
forward. I understand that those discussions are ongoing at a political level.
Aleana
Young: —
Right, thank you. And this is a real softball question from me. The federal
government has committed, I believe, in the neighbourhood of about
$4 billion to Ontario for their pursuit of SMR work. And I am quite
curious how those conversations have gone in regard to federal money for our
first SMR here in Saskatchewan. And what commitments, if any, have been made?
Because I completely agree.
It’s incredibly important that there is equity across the country as well as
recognition of the work that we have to do here in Saskatchewan. And with
$4 billion having gone to Ontario, who has a significant supply chain head
start over us, as we look to build this out how we finance it here in
Saskatchewan, looking at different models but also with a population of
1.2 million people, is a fundamental question.
I
would very much appreciate more detail, if you can provide it, on the state of
those conversations, what if any commitments have been made and what we are
expecting.
Hon.
Jeremy Harrison: —
Yeah, I mean I would just kind of say as a general statement with regard to
federal government discussions, you know, obviously we’re not negotiating in
public on that.
And I would say to that point
as well, I have appreciated the openness. I’ve appreciated the engagement from
the new federal government. And I say that as somebody I think everybody in
this room knows probably would be the last guy ever to have a red T-shirt on.
But you know, there has been without question a different attitude and a
different approach, particularly from senior cabinet ministers in the Carney
government than there were in the Trudeau years.
Yeah, I’d speak specifically.
I know, Madam Chair, you’ve had significant engagement with Minister Hodgson as
well. You know, somebody who’s prepared to have discussions, who you can
actually talk to at a high level, you know, in a detailed level about detailed
questions and who can engage in those discussions at that level.
Appreciated Minister
Champagne, who I think members know has been a friend for a long time. But he
is, you know, a serious man who is doing a serious job as Minister of Finance,
but has also been highly engaged in the bilateral discussion with Saskatchewan.
The clerk has been, you know, very engaged as well with the deputy minister to
the Premier, who has deep experience in a lot of this.
And you know, at the
obviously most senior level, the Prime Minister and Premier have been very,
very engaged directly since he became Prime Minister, including two
international missions which the Prime Minister asked the Premier to accompany
him on to both China and India, where we’ve been, you know, very, very engaged
in both of those markets.
We’ve been criticized for
being engaged in both of those markets, but it’s paid off. It paid off on the
fact that we have tariff relief from China on canola, but also the direct
engagement over a decade has made a tremendous difference. And we heard from
Tim Gitzel I think even today about the impact that that has had for Cameco and
their long-term nuclear supply agreement in and with India.
So all that to say that we’re
not going to be negotiating in public. I’ve appreciated the engagement from the
federal government. We have a nuclear strategy that’s going to be released by
the Government of Canada that I think will, you know, provide additional
clarity publicly as to their approach on nuclear, which I think is going to be
really quite positive as far as engagement.
You know, we’re going to work
bilaterally on what makes sense. And I would say even beyond that bilateral
discussion, there has been some very substantive engagement at the PT
[provincial-territorial] level.
And then interfacing with the
federal government as well on electricity and transmission strategy, which
really is very, very integral to how nuclear investment from the federal
government will make sense in a regional context within the country. And that’s
why, you know, I’ve talked about how I really see this as being a space that’s
nationally unifying. And there are not a ton of them unfortunately in Canada
that can bring the country together, but nuclear really is one of them.
And that’s why I’ve, like I
said, been encouraged by discussions, by what we’ve heard, what we’ve seen.
We’re going to, you know, “trust, but verify,” as President Reagan said. We
will trust, but verify. There’s a bit of a history with the Liberal Party in
Western Canada. But you know, I would say that we’ve had some important
interaction on that front. That’s going to continue.
You know, Indigenous leaders,
governments, companies are going to be a part of that as well, interfacing
through the national Indigenous loan guarantee program. I think that’s going to
potentially play an important role. I think they’re going to have to do some
more policy work on that program at the federal level, and I’ve told them that.
But I think that there’s something there that could, in the long term, be
really quite valuable.
You know, we have the CIB,
the Canada Infrastructure Bank, which has been I think one of the funding
sources for the Darlington BWX project. You know, that’s going to be a
potential option as well. But I do think that there are going to be some
options that exist that, you know, are going to be explored, and we are going
to explore them. And we probably will be criticized for exploring them,
including that Indigenous equity component but also Canadian pension
investment.
We’re going to be looking at
these mechanisms with an open mind as to what could make sense within the
Canadian context. Working as well with the federal government and working
across provincial lines as well. Because for large-scale nuclear power generation
— particularly large-scale — to really improve the economics of that we’re
going to need to have close collaboration with our western and our eastern
neighbour.
And that’s really why, you
know, I wanted to talk about transmission. Because that will really be a
central component about making the path for nuclear a smoother one, given that
we are really uniquely positioned here — geographically being part of it, but
also given the context of our existing transmission infrastructure, our
existing potential baseload, and our natural resource here. All of it really
adds up to it making sense for nuclear power generation to be located here in
Saskatchewan, with export opportunities both to the west and east and
potentially to the south as well.
You know, we’re doing that
right now. There were a number of days in the last couple of months where we
were literally keeping the lights on in Alberta. We were exporting south and
east. But even today as an example — actually I follow the grid pretty close —
we were exporting into Alberta today because their wind flatlined. I suspect
right now, maybe a couple of hours ago, we would have and probably had the
intertie wide open. I wasn’t able to look obviously, being here at the table at
that point. But I suspect, you know, the intertie was wide open exporting into
Alberta once their solar went off, because they were flatlined on the wind.
So all that to say that it
adds up and makes sense for us to be the location, being a regulated market as
well. I think it’s very, very challenging for unregulated markets, for nuclear
to work in those. And I think that’s been a part of the national discussion
about how this can all work together between provinces — coordinating
transmission strategies, coordinating grid design — and also with the federal
government as a true partner.
Aleana
Young: —
Thank you. Thank you, Minister, for that answer. I’m curious about the
. . . I’d like to maybe move on to a brief discussion on large
nuclear, maybe starting with the most recent announcement, the MOU [memorandum
of understanding] being signed with Bruce Power. Obviously very, very exciting
for the province, for SaskPower, for Bruce as well.
I’m curious if SaskPower
. . . I understand they’re basically acquiring Bruce’s technical
evaluation to help inform their large technology selection. Did we buy that
from Bruce? If we did, how much was it? And how are we going to ensure that there
is a Saskatchewan lens applied to that? Is Bruce going to be evaluating
technologies for Saskatchewan or is that work that’s being done here? And I’d
like to also know the timelines for that work.
Hon.
Jeremy Harrison: —
I wish David was here because . . . David Brock, who is heading our
nuclear division obviously, and who had been heading our energy security
division at CIC as the subject matter and division head in this space. But
we’ll have a bit of a chat.
[21:45]
Rupen Pandya:
— Well thank you for the question. So our relationship with Bruce, as per the
MOU that was executed on April 15th, is to learn as much as we can from one of
the largest nuclear operators in Canada. And I think the minister referenced
the fact that Canada is tier 1 and that Bruce, as one of the largest nuclear
operators, has considerable experience in terms of our nuclear operations.
They’ve just recently gone
through a technology down-select process in that jurisdiction with respect to
additional generation on the Bruce site itself. And so we thought it was
. . . And this follows suit with respect to our approach with SMR as
well. So we partnered with Ontario Power Generation and Tennessee Valley
Authority on the question of small modular reactors so we could learn from
nuclear operators in the deployment of those technologies.
So certainly when we looked
at the question of large nuclear, you know, Bruce, because they run an active
procurement, because they’re an active operator, and because they’re Canadian —
all of those criteria were important to us in terms of selecting them as a MOU
partner. Our MOU really has us co-operating with Bruce in terms of all of their
technical evaluation with respect to reactor technology.
And so what that means,
Member, is that we’ll look at the power economics of large reactors. We’ll look
at the feasibility of deployment, the readiness of deployment relative to each
of the technologies that they evaluated. And certainly, you know, the question
is, are there operating reactors of that magnitude anywhere in the world?
Because that will be part of our criteria.
I think the second part of
your question was around, you know, will Bruce be involved in criteria for
selection? And the answer is no. This will be a SaskPower, Government of
Saskatchewan decision with respect to what the criteria for selection will be. And
certainly a localization of benefits will be a key component of the selection
decision, but certainly the power economics, the technical fit in the
Saskatchewan context would be important.
The large technology
down-select process is important, and certainly we’re going to rely on all of
the work that all of the engineers inside of Bruce have done. But we would need
to do due diligence with respect to that work before we can sign off on it.
But beyond the large
technology down-select work, what we’ve also been able to obtain from Bruce
Power is all of their work with respect to siting large nuclear reactors in
Saskatchewan. So Bruce — and this is maybe for my colleagues at SaskPower who
are listening or others at home — Bruce Power came into Saskatchewan in 2007‑08
and did significant work on potential sites for large nuclear location,
including geotechnical work and assessment. And so we’ve been able to obtain
all of that work from Bruce Power as well.
And I think there was a
second part to your question or a third part to your question around was there
any cost? And there is a cost. We’ve negotiated to obtain all of that work: the
technology down-select work plus the process with respect to RFI [request for
information]; the information that would be provided as part of that process as
well as all of the previous work that Bruce had done with respect to technology
locations for $3 million.
And just for your
information, Member, but for anybody else’s information, that is a significant
value for us inside the company in terms of the amount of work that this
partnership and this MOU has allowed us to obtain.
Aleana
Young: —
Thank you very much. Just to clarify retrospectively, my question wasn’t about
whether Bruce would be selecting the technology, but whether or how a
Saskatchewan-specific lens and criteria, risks — all of that would be applied
to that process. And I think I understood from your answer that that work will
be done by SaskPower. Thank you.
Just looking at the clock, I
do have so many questions on this. So having heard the Premier speak today at
the Sask chamber summit and having obviously paid close attention to the
announcements around large nuclear coming out of SaskPower, which is certainly
exciting, it does seem like things are moving quickly towards potentially
making a technology selection.
Now obviously there’s a
couple major front-runners in Canada that the provinces that are either
actively operating nuclear or are planning for it are considering. Of course
the AP1000, great technology, amazing capacity factor. And of course then
there’s the CANDU reactors, great Canadian supply chain as well, with provinces
obviously valuing different parts of that as they proceed to make their
decision.
I guess I’m — for the record,
so lest it be misconstrued — very, very enthusiastic about large nuclear for
Saskatchewan. I am curious though about the timelines because it sounds like
Saskatchewan is looking to select a large technology before Ontario does. I
understand they’re not looking to make that decision until next year, and it
sounds like SaskPower will be moving a bit quicker than that. You didn’t have
to read too closely between the Premier’s lines this morning to pick out that
there is a clear front-runner in mind.
I guess I’m just curious
about those timelines for SaskPower in selecting a large technology before
Ontario does, while the federal government is out, Minister Hodgson has
recently been out internationally advocating for other markets to look at CANDU
technology, and other jurisdictions like Alberta talking about the AP1000.
But for Saskatchewan, why are
we looking to make a decision before these other jurisdictions? I’m just
curious. If you can help me understand kind of the hurry-up timeline there.
Hon.
Jeremy Harrison: —
Well I’m happy to speak to this actually. I would say, number one, we are
evaluating large nuclear technology independent of the timeline of the
Government of Ontario. You know, my view is very strongly that we’re going to
make a decision that’s the right one for Saskatchewan. We’re not going to be
influenced into a decision that’s not right for us predicated on, you know, a
decision made by another power utility. So I would say that, number one.
Number two with regard to the
Government of Canada, I would say wait for their nuclear strategy. You know,
our representations have been very clear to the federal government that being
technology-agnostic is the appropriate approach for the Government of Canada,
with utilities who are actually in the space making the decision that’s the
right one for their jurisdiction or for their company, depending on the
circumstance. So that has been our clear representation consistently over time
to the federal government.
As well, you know, we’re
going through the process right now. SaskPower are managing that technology
selection process. I’ve not put a public timeline on it beyond saying that we
are working quickly, and I’ve encouraged our team at SaskPower do a thorough
job. But we want to move that process and get a recommendation from the company
to the board and to CIC and to cabinet in an expeditious way.
You know, we went through
some of the criteria that are going to be a part of that evaluation process.
Rupen and I were, you know, very transparent about what those criteria were
when we launched the large-scale and announced the technology selection process
back in January. So SaskPower are doing that work.
That recommendation, you
know, I’m hopeful we’re going to see in this calendar year from the company.
And you know, if earlier the better, but we want to make sure we’re doing a
thorough job on all of that as well. So you know, David knows that well when
Rupen obviously as a CEO is going to be managing that process.
So you know, wait for the
federal nuclear strategy. That will be an indication. And you know, I would say
this too. There’s a lot happening in the industry right now. You know, our
interest is going to be, beyond kind of the technology selection, is how do we
leverage whatever technology selection that we make to build our supply chain
out here in the province so that Saskatchewan companies who are — we talked
about it last night — more and more going through the nuclear certification
process. Different stages, but about 150 companies in this province right now
are going through that process, which is not an easy process. You know, 500,000
to a million to $2 million to go through that. They’re doing that because
of the long-term opportunity in supply chain development for a product. So I
think we publicly announced it’s going to be a part of the consideration as
well.
But I have full faith in the
company to work through that to make the right recommendation for Saskatchewan.
But we’re doing that independently of determinations being made by other
utilities.
Aleana
Young: —
Thank you very much, Minister, for that answer. I agree. I think the supply
chains will be a critical part of that, obviously, with Ontario with their
CANDU supply chains and the Trump administration committing, I believe it was
around $80 billion for the long-lead items specific to the AP1000, looking
to build up that supply chain in the States.
Have there been discussions
at this point with the federal government? I hear what you said about the
federal electricity strategy. Have there been discussions held with the federal
government about the financing for this? Because my understanding is that
typically the financing is the first piece that’s established prior to a
technology selection. The minister is shaking his head, but I believe that’s
the work that the CNA is publishing in terms of a large-scale nuclear.
I’m just curious for an
investment of that size what the implications for financing will be for a
province like Saskatchewan, especially if Ontario or, say, the federal
government is actively promoting CANDU technology, if that will complicate any
decisions that SaskPower or Saskatchewan makes. I appreciate you folks are very
well versed in this and are thinking about this every day, but I’m looking for
some more information on that given the expedited timelines that we are seeing
here.
Hon. Jeremy Harrison: — Just,
Madam Chair, how long would I have to respond?
Chair
C. Young: — 10:09.
Aleana
Young: —
But we do have three more questions, Madam Chair. One more from myself, and two
from the member from Cumberland.
Hon.
Jeremy Harrison: —
So thanks, Madam Chair. There were, I think, a number of questions, including
that, but I’ll try to respond to them all.
But I would just say with
regard to the discussion with the Government of Canada, Madam Chair, you were
there along with Rupen and I when we had the discussion with Minister Hodgson
and with the CNA that resulted in the work that the member referenced. That was
actually the catalyst for the CNA work which, as I said, I followed up on as
late as just a few hours ago with George. So you know, they’re going through
that process.
You know, I would say this
though: I would fundamentally disagree. You know, we’re going to go through the
technology process first, and you know, we’re going to make the right decision
for the technology that makes sense for Saskatchewan, predicated on the
criteria that Rupen and I and David Brock had laid out when we announced the
technology selection process. And we’re going to do that independently of other
power utilities. We are doing that independently of the federal government as
well.
And I would say this: I’m
very hopeful that you’re going to have an approach from the federal government
that is technology-agnostic when it comes to nuclear deployment. You know, we
have a shared interest in this space. You know, the federal government know as
well that if we are to get to an entirely decarbonized power grid in the next
25 years — which is an objective that we have been clear that we share with the
federal government — the only way that that is going to be realistically
achievable is through the significant and large-scale deployment of nuclear
power generation, particularly in areas that are not able to deploy hydro on
the scale that some jurisdictions are in the country.
And you know, I’ve said as
well, it’s part of our all-of-the-above approach that I wish we could put
another 2 gigawatts of hydro on the grid, but that’s just simply not an option
given our geography. You know, we’re continuing to make investments into hydro.
I wish we had the chance to actually get into some of those investments because
they are significant and important and, I think, show the commitment to the
all-of-the-above approach that we are taking in addition to the investments
we’re making into intermittence.
[22:00]
So you know, we’re going to
work through the technology selection process. We’re doing that independently
of decisions taken by other jurisdictions. We are appreciative to Bruce, who is
our partner in some of the technical evaluation components, given their long
history and history here in this province as well.
And you know, I think that
there’s going to be a role for the federal government as a partner in this. I
think it’s in their interest and I think it’s going to be in the national
interest. So we’re looking forward to that partnership too.
Chair
C. Young: — I recognize the member
from Athabasca. Sorry.
Jordan
McPhail: —
From Cumberland.
Chair
C. Young: — From Cumberland. Sorry.
Jordan
McPhail: —
Thank you so much, Madam Chair. I have a quick question in regards to the North
specifically. I had the honour and opportunity to join many northern leaders in
Prince Albert at, I want to call it, the regathering of New North. And there we
spoke to the New North Chair, Rick Laliberte, who spoke about many of the
challenges in northern Saskatchewan, not only in acquiring investment but
getting, you know, recruitment of health care workers, of many different
people.
And a lot of the challenges
that people are facing is access to housing, and secondarily, when they have
access to that house, many of the issues that they face are high power rates
and high cost of heating the home, when they do find it, in northern Saskatchewan.
And one of the solutions that was brought forward . . . And I
appreciate the minister’s comments earlier tonight where he said that he had
listened to Indigenous leaders. There’s many Indigenous leaders across northern
Saskatchewan that think the power rates are far too high.
You know, SaskPower and the
province in general does receive tremendous opportunity and wealth because of
the things that are brought out of northern Saskatchewan. We’ve been talking
greatly about nuclear power here in the province of Saskatchewan. We talked
about biomass in the minister’s riding himself. And you know, these are coming
from northern forest products. These are coming from uranium that’s mined out
of northern Saskatchewan, the power generation from Island Falls that powers
those investments in northern Saskatchewan.
And I think northern people
are just asking for a bit of a break. There is no other option for heating
their home outside of power. We see that the rates have been talked about
increasing in northern Saskatchewan. And I’m wondering if the minister would care
to comment whether he’s going to listen to those Indigenous voices that are
saying that power rates are far too high, that it’s affecting the cost of
living for people in northern Saskatchewan, and if there’s been any
consideration to honouring what those Indigenous voices are saying in northern
Saskatchewan, to lower power rates so that all residents of Saskatchewan have
some level of equity.
Hon.
Jeremy Harrison: —
Yeah, I appreciate the question. It’s a good one. And I had the chance to talk
to Mayor Laliberte as well at the SUMA convention. We had a good discussion.
We’ve known each other for a long time, and you probably know that. A good
discussion.
You know, where I would like
to get to . . . And on the east side, so on the Cumberland side, you
know, we’ve had a gas connection running up to La Ronge now for, I don’t know,
15 years that . . . I mean there were different phases that the line
was built in. You know, I would like to get there on the west side as well.
And that’s a part of the
ongoing discussion that we’re going to be having with the federal government
which is already been initiated. And I give Mark Guillet credit on this, well,
because he has been very proactive in pursuing opportunities. And you know,
this isn’t going to be an overnight project. It’s a significant investment. But
I think that there is going to be a path in that regard for gas deployment.
It’s more in the space of SaskEnergy obviously right now.
But you know, the other part
is around the reliability on the northern grid. And what we had talked about in
our transmission strategy, I think it probably got more attention on the east
side, on the E.B. Campbell-Island Falls line that we’re going to be
constructing. We’re in the kind of the procurement phase. We’re going to be
initiating the procurement phase starting this year, which is a 230-kilovolt
line between those two locations. Significant, you know, significant
undertaking connecting the northern and southern grids.
It didn’t get as much
attention, but we also are going to be moving forward with a significant line
reinforcement project up the ML3 corridor as well, which is a 230-kilowatt
infrastructure investment. We’re probably going to run 120 or 30 kilovolts up there
initially. But that’s a major project as well for reliability for the northern
communities on the west side.
So I would even further
envision — and my officials probably haven’t heard this yet, but I’m going to
further go — into the future, what I would envision is really a loop across
northern Saskatchewan as well, which will go a long ways to, you know, putting
us in a long-term position of reliability from a grid management perspective,
will simplify things significantly as well.
Our grid operations folks do
a great job. And I’ve referenced the issue we had this summer where our grid
operations folks did an amazing job in Island Falls when we lost the
interconnects. But connecting these two grids, connecting the east side, connecting
the west side and, you know, in the long term . . . And I think this
is an opportunity because it was a partnership when we did gas on the east
side, that we do gas on the west side as well. Because I fully, fully hear and
understand that this is an issue. You know, we have a number of programs I had
talked about earlier with regard to folks who are on electric, but the long
term is going to be gas.
Chair
C. Young: —
MLA McPhail. I’m tired, sorry.
Jordan
McPhail: —
No worries.
Chair
C. Young: — I just wanted to say
Jordan. I did know it was wrong.
Jordan
McPhail: —
That’s fine too.
Thank you to the minister for
that. I did want to make sure that I had you on the record to see if those
considerations had been made at all. I know you were talking about the
long-term solutions to make, you know, power bills less and that’s why you’re changing
the heating source in those areas.
But specifically to the
request from Mayor Laliberte, the Chair of New North, who represents many, many
northern administrative district communities, brought that to your attention as
you’ve indicated. And I wanted to, you know, get it on the record that you
either agreed or disagreed with his approach, not so much the long term.
But you know, seeing as we
have run out of time or are running out of time, I did have a question. You
know, we’ve been talking a lot about the grid and how things have been changing
between northern and southern grids.
And of course, you know, I
spoke about the reliability that will be offered to Saskatchewan that you’ve
outlined in some of your comments here tonight when we look at biomass coming
out of the North and the forestry products that are there, when we talk about
the hydro and the E.B. Campbell dam which you referenced, when you talk about
nuclear power and the uranium that is produced here in Saskatchewan due to the
hard work of many people not only in Saskatchewan but across Canada that have
worked in the nuclear sector.
But when we look at that
southern grid as well and when we look at how we are tying all these things
together, I have, you know, quite a deep concern as to some of the responses
that I heard on the refurbishment of the coal plants here in Saskatchewan, and
most specifically on your valuation that you provided.
And so the question I have
for you, Minister, as we close here tonight is, for the $2.6 billion that
you’ve allocated to the coal refurbishment, have you taken that number to
cabinet? Has it been approved by cabinet at this point?
Hon.
Jeremy Harrison: —
Well obviously we don’t talk about cabinet deliberations. But you know, what I
would say is that we are very comfortable with the direction we’re going in.
And I know we’re nearly out
of time. I’ll just kind of close. With regard to the one question, I appreciate
the representations with regard to northern Saskatchewan, and you know, I think
I spoke to what are going to be very real projects going forward that are going
to make a difference in the lives of northerners. It’s something that’s
important to me and it’s something that is important to the company as well.
And I appreciate Mayor Laliberte’s submissions as well. We are fully prepared
to engage and work with northern leaders. So I would very much say that, which
was what I told the mayor directly also.
But just by way of conclusion
— I know we’re nearly at the end here, Madam Chair — but I really do want to
sincerely thank the folks who work for this company every day and — I’ll go
through Rupen — our management team who do, through you, a remarkable job.
But I really want to thank
our front-line workers. I wish we had a chance to talk about some of the things
Rupen and I were able to witness first-hand. I mean we went quietly up during
the wildfires to, you know, meet with our folks and kind of hear first-hand,
encourage and thank them for the work they’re doing. I’ll tell you, we have
amazing, amazing people that work for SaskPower who literally risk life and
limb for this province, for the people of this province every single day. And I
have enormous respect for them and I want to say thank you.
Chair
C. Young: — So having reached our
agreed-upon time for consideration of these estimates, we will adjourn
consideration of the estimates and supplementary estimates no. 2 for
Saskatchewan Power Corporation.
Minister, any additional
closing remarks? No? Members, if you have something.
Aleana
Young: —
Yeah. Thank you, Madam Chair. As always, I’d like to extend our deep
appreciation to yourself, to the committee members, to the minister, to all the
officials who are present here tonight for all the work that goes on in the
background in preparing for this, as well as the hard work that takes place at
SaskPower all year round.
And of course the good folks
in the building who help facilitate this process, from Hansard to
broadcast to the support and maintenance staff in the legislature, and the
security as well. With that, Madam Chair, happy to pass it to the member from
Cumberland briefly.
Jordan
McPhail: —
Thanks. Just as I close as well, I want to thank the minister and the officials
for their time here this evening, and through the minister from our team as
well thank the people that work on the SaskPower lines and our grid. As a guy
that worked for SaskTel for 10 years and had calluses on the insides of my
knees from climbing those telephone poles — albeit not quite as high as some of
the folks at SaskPower and not nearly with the same amount of danger that they
do — but I’ve always had a deep admiration for the people that put on those
orange coveralls, drive the orange trucks all over Saskatchewan, and keep us
connected to the grid. And appreciate the work that they do each and every
single day.
And you know, to shout out
some of the folks from northern Saskatchewan, I know Jeff McKerracher and Lorne
Prodahl used to run the base up in La Ronge. Great guys. Know that northern
grid inside out and backwards. Many stories brought into newspapers as well.
And I really, really
appreciate the work that the employees and everybody do at SaskPower. And thank
you for your time here this evening.
Chair
C. Young: — Thank you. That concludes
our business for today. And I would ask a member to move a motion of
adjournment. MLA
Thorsteinson has moved. All agreed?
Some Hon. Members: — Agreed.
Chair C. Young: — Carried. This committee stands
adjourned until Tuesday, April 28th, 2026 at 3:30 p.m. Thank you, everyone.
[The
committee adjourned at 22:12.]
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under the authority of the Hon. Todd Goudy, Speaker
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