CONTENTS
Standing Committee on the Economy
Bill
No. 154 — The Management and Reduction
of Greenhouse Gases Amendment Act, 2023
TWENTY-NINTH
LEGISLATURE
of
the
Legislative Assembly of Saskatchewan
STANDING
COMMITTEE ON
Hansard Verbatim Report
No.
28 — Monday, March 18, 2024
The
Chair: — Good evening and welcome to the
Standing Committee on the Economy. I am Colleen Young and I will be chairing
tonight’s meeting. Joining us are members Ken Francis, Delbert Kirsch, Greg
Ottenbreit, Doug Steele, and sitting in for Jennifer Bowes is Jared Clarke, and
for Aleana Young is Matt Love. I have a bit of a spiel to get through here
first before we begin with the bill.
So today our committee is tabling lists
from the Law Clerk and Parliamentary Counsel of regulations and bylaws filed
with the Legislative Assembly between January 1st, 2023 and December 31st, 2023
which have been committed to the committee for review pursuant to rule 147(1).
The Law Clerk and Parliamentary Counsel will assist the committee in its review
by submitting a subsequent report at a later date identifying any regulations
that are not in order with the provisions of rule 147(2). However the committee
may also decide to review any of these regulations or bylaws for policy
implications.
I’m also tabling three reports from the
Law Clerk and Parliamentary Counsel that identify any issues pursuant to rule
147(2) that he found with regulations and bylaws filed in 2017, 2018, and 2019,
and any steps that have been taken to rectify these issues. If the committee
chooses, it may bring in the Law Clerk and Parliamentary Counsel to review
these reports at a subsequent meeting.
The documents are as follows: ECO 16‑29,
Law Clerk and Parliamentary Counsel: 2023 regulations filed; ECO 17‑29,
Law Clerk and Parliamentary Counsel: 2023 bylaws filed; ECO 18‑29, Law
Clerk and Parliamentary Counsel: 2017 report on regulations and bylaws; ECO 19‑29,
Law Clerk and Parliamentary Counsel: 2018 report on regulations and bylaws; and
ECO 20‑29, Law Clerk and Parliamentary Counsel: 2019 report on
regulations and bylaws.
Bill No. 154 —
The Management and Reduction of Greenhouse
Gases Amendment Act, 2023
Clause 1
The Chair: — We will now begin
with consideration of Bill No. 154, The Management and Reduction of Greenhouse
Gases Amendment Act, 2023. We will begin with clause 1, short
title.
Minister Tell is here with her officials
and I would ask that officials state their name and their position when they
first speak at the microphone, and remember Hansard operators will turn your
mic on when you’re ready to speak. So, Minister, you may begin with the
introduction of your officials and with your opening remarks.
Hon.
Ms. Tell: — Yes. Thank you, Madam Chair. To my
left I have Aaron Wirth, with the ministry, and I refer to him as the
provincial expert in the subject matter that we’re talking about today. To my
right is Veronica Gelowitz, who’s the deputy minister of Environment. Thank
you.
Bill 154, The Management and Reduction of Greenhouse Gases
Amendment Act will allow
output-based performance standards or OBPS, program compliance payments,
penalties, and debts for the province’s electricity sector to be used for
investments in clean, reliable, and affordable electricity for Saskatchewan.
The Act
currently states compliance payments and debts associated with compliance
obligations must be deposited into the technology fund. With the recent
expansion of the OBPS program to include the electricity sector, combined with
federal carbon tax increases, OBPS compliance payments could result in annual
compliance payments into the technology fund not typically seen in revolving
funds outside of the General Revenue Fund.
The amendments
to the Act will allow the province to simplify oversight for use of the funds,
while helping support long-term clean electricity transition priorities such as
net zero electricity sector and Saskatchewan’s first small modular reactor. All
other OBPS program compliance payments from the industry will continue to be
deposited into the technology fund to support industry-driven projects that
reduce emissions.
Thank you,
Madam Chair.
The Chair: — Thank you, Minister. I’ll now open the floor to
questions from members, and I’ll recognize Mr. Clarke.
Mr. Clarke: — Thank you, Madam Chair. Thank you to the
minister and the folks for being here tonight. This is my first committee, so
hopefully I don’t screw up too bad, and ask for forgiveness off the top. But
I’ll just get into this so we’re not here too late tonight.
You kind of
mentioned this in some of your preamble, Minister, but wondering why these
amendments to the Act are necessary right now.
Mr.
Wirth: — Hi. Aaron
Wirth. I’m the executive director of climate resilience branch in the
Saskatchewan Ministry of Environment. Thanks very much for the question.
So why are we changing the Act right now? There’s a couple of major reasons,
the first one being that the OBPS program, now that we’ll be accepting
compliance payments from the electricity sector which is about 14 electricity
facilities in Saskatchewan and also almost doubling in size by 2030 with the
expansion of the program as well as the addition of natural gas transmission
pipelines, the amount of compliance that we think could be deposited into the
technology fund is bigger than would be normal for a dedicated fund,
special-purpose fund in government that’s outside of the General Revenue Fund.
And so for those reasons and the increased federal carbon tax rising by $15 a
year to $170 by 2030, those funds are growing, potentially precipitously, over
the number of years.
And the other reason would be that now
that we have provincial autonomy over industrial emissions pricing for the
electricity sector, including SaskPower, SaskPower will be making its first
compliance payment for the 2023 compliance year later this calendar year. And
so the Act would need to be changed ahead of that compliance payment so that it
can be used for clean electricity as opposed to being deposited into the
technology fund.
Mr. Clarke:
— Thank you. Just picking up on something you talked about with the influx of
money coming in from the changes. In the 2022‑2023 annual report for the
tech fund, it indicates that you started receiving compliance payments in 2019
with payments to the fund totalling 29 million in last year’s annual
report. So I’m wondering, can you tell me how much the tech fund has received
in 2019, 2022, 2021, 2022, and 2023?
Mr. Wirth:
— Yeah, thanks for the question. So the funding you’re talking about in the
technology fund, there’s about $30 million that’s been deposited from
compliance payments from industrial facilities, so non-electricity and
non-natural gas transition pipelines. These would be large regulated emitters
from oil and gas sector, potash, etc. That money, that $30 million was
from the 2019 and 2020 compliance years. So we’re still waiting for compliance
for future years 2021, 2022. And then 2023 will be the first year in which
SaskPower is . . . their emissions are priced and regulated under the
provincial system.
Mr. Clarke:
— Can you explain why there would be such a lag in money coming in?
Mr. Wirth:
— Yes, I can. So the main reason was COVID. So all the industrial emissions
pricing programs across Canada had some issues with regulated facilities, a lot
of cases facilities going in standby because of contracting COVID in those
facilities, or production dropping off in terms of the disruption to markets.
And so almost every program across
Canada, including the federal program, allowed some leniency when it came to
making those compliance payments. And so we requested of the federal government
an extension to the deadline within our program for those compliance payments.
That was something the industry was asking for and needed, and we obliged.
Mr. Clarke:
— Thank you. So I’m correct in understanding that there is currently
$29.125 million in that fund up to 2020?
Mr. Wirth:
— Yes, correct.
Mr. Clarke:
— Okay. Will there be audited financial statements being produced in regards to
the money that’s being brought in and spent through the technology fund?
Mr. Wirth:
— So the tabled annual report has the audited financial statements in it. The
Provincial Auditor audits the program every year, and we table in the
legislature an annual report every year.
Mr. Clarke:
— Okay. I’m going to go back kind of to a broader question. Who did the
ministry consult with specifically about these amendments? Can you be specific
about which stakeholders?
Hon.
Ms. Tell: — Yeah, both the government and
SaskPower have undertaken significant engagement related to electricity, which
helped inform the Act amendments, including how to finance capital costs to
transform Saskatchewan’s electricity sector. I will ask Aaron to speak
specifically on the industries, etc., that have been spoken to specifically,
okay?
Mr.
Wirth: — So the ministry held two engagement
webinars with industry impacted by these legislative changes. Those webinars
took place on November 30th and December 1st, 2023, with a total of 140
participants. Some of the key account holders in attendance included members
from the potash sector, mining, oil and gas, manufacturing, upstream and
downstream oil and gas, forestry, oil seeds, refining, etc. And so there was
broad engagement that way.
We also before that had engaged,
starting in 2021 throughout 2021 and 2022 as part of the OBPS program updates
which included the inclusion of the electricity sector in our Saskatchewan
output-based performance standards program. We had held two webinars at that
time as well, which included the treatment of electricity, which we engaged
with industry on. We held approximately 150 meetings with internal and external
stakeholders, including the regulated community. Our webinars had a total of
264 attendees with industry associations. We also released a discussion paper
and received 19 written submissions from industry, which included the
electricity treatment that we were considering at that time.
And then we’re also learning from
SaskPower’s engagement that they’re doing with the public right now, their
Future Supply 2030 and Beyond, which began in 2022. And so, of course, they’ve
been in multiple cities in person and have hosted a number of online workshops
as they update their long-term supply plan. And so we’ve benefited from those
learnings.
And then maybe just finally I’ll mention
that our Crown Investments Corporation, including the energy security unit
within Crown Investments Corporation and SaskPower, regularly meet with SIECA,
and that’s the Saskatchewan Industrial Energy Consumer Association, which
includes all the key account holders for SaskPower in Saskatchewan. And we’ve
also met with CAPP, the Canadian Association of Petroleum Producers; the SMA,
the Saskatchewan Mining Association; and a number of stakeholders where we’ve
received feedback specifically on the province’s electricity supply plan and
potential future treatment of electricity proceeds.
[20:45]
Mr. Clarke:
— What kind of response did you get back from . . . It sounds like
you had really good engagement. Were most in the industry supportive, asking
for the changes that you’ve made? Just can you give me a feel for how industry
responded to the proposed amendments?
Hon.
Ms. Tell: — Overall the regulated emitters have
been supportive of the government’s decision, understanding that large-scale
investments . . . needed to transition Saskatchewan to net zero
electricity, and that investing electricity sector compliance payments in a
targeted manner will enable the province to transition to clean electricity
more quickly and effectively than would otherwise be possible.
Mr. Clarke:
— Great, thank you. Honing in on the clean electricity definition in the
amendment, which speaks to “. . . reduces the average greenhouse gas
emissions per megawatt hour of electricity from Saskatchewan’s power grid,” I’m
wondering, what is the average greenhouse gas emissions per megawatt hour of
electricity from Saskatchewan’s power grid currently?
Mr. Wirth:
— Sorry, I don’t have that information offhand. SaskPower does publish that
information. It’s readily available on their website. I don’t have it here with
me right now, but it’s easily accessible.
Mr. Clarke:
— So one of the pieces to this amendment is, you know, defining what is clean
electricity based on what that average greenhouse gas emissions per megawatt
hour is. I’m wondering, can you speak to what generation sources would fall
under that number then and be considered clean electricity?
Hon.
Ms. Tell: — Projects could include but are not
limited to renewable energy, small modular reactors, demand-side management
such as energy efficiency retrofits, clean electricity imports, etc.
Mr. Clarke:
— In the same vein, what generation sources would not be under that average
number? So what would not be permitted or what would not be defined as
electricity?
Hon.
Ms. Tell: — The absolute would be coal, which
obviously we’re phasing out in the province, and so that’s probably the best
answer.
Mr. Clarke:
— Would natural gas be below or above the average?
Mr.
Wirth: — So right as of today, any new
natural gas would reduce the emissions intensity of the grid overall because we
still have a little over 20 per cent of generation capacity coming from coal.
New natural gas units are also really efficient, so they would displace in some
cases some older units, natural gas and coal. And then SaskPower, you know, is
considering carbon capture utilization and storage for natural gas as well. So
natural gas is something that would be eligible as of today with the coal-and-energy-mix
profile we have right now.
Mr. Clarke:
— Do you anticipate funding from the tech fund going to natural gas?
Mr.
Wirth: — Yeah, just a point of clarification.
The technology-fund funds in that fund — and the funds we’re talking about now
which will be used for clean electricity, clean energy — and an investment fund
for small modular reactors are two separate funds in that case. And so the
technology fund will continue to exist but only for industrial emitters
compliance payments and to be returned to those regulated emitters under the
provincial output-based performance standards system. So what we’re talking about
in terms of this Act amendment is the compliance proceeds from the electricity
sector only being separated from the technology fund.
Yeah, and I would say to your question
about what we foresee the funds being used for, while it’s still early days,
the spirit intent of the legislative change is really focused on renewable
energy. It could definitely include small modular reactors. It could include
demand-side management, as the minister mentioned, or clean electricity
imports. But we definitely see renewable energy as being a first-most priority.
Mr. Clarke:
— Thank you. I’m going to come back to SMRs [small modular reactor] a little
bit later. But just wondering, what was the origin for this definition of clean
electricity?
Mr. Wirth:
— Thanks for the question. So the definition is meant to be intentionally broad
to encompass potential future technologies that don’t exist yet or anything
that we may not have thought about or even natural gas, if that’s being used as
a bridge to a net zero electricity sector. And so it just provides maximum
flexibility for anything that gets us closer to net zero emissions in the
electricity sector.
Mr. Clarke:
— You kind of talked about removing electricity facilities from payments to
this tech fund, so I don’t need to ask necessarily about that. I’m wondering,
is this going to include both public and private electricity generation
facilities being excluded from the tech fund payments?
Mr. Wirth:
— So the electricity facilities that we talk about, as the funding not going
into the technology fund, is related to all of SaskPower’s fossil fuel
electricity facilities, of which there are about a dozen. And then there’s also
two other electricity generators in the province. That’s Northland Power and
Canadian Power. So there’s SaskPower and those two other companies are the
three generators in the province. And so that money is being used for the
purposes we’re talking about under this Act amendment.
There is other electricity generation
that happens in the province. Some of it’s behind the fence. Some of it’s
related to industrial processes, like our potash mines for example. They have
cogeneration where they need the heat and steam, and electricity is actually
the by-product. And so we’re allowing those emissions compliance payments from
those activities, including electricity on site, to be deposited into the
technology fund so that industry can have access to that funding again and to
potentially reduce its emissions and costs over time.
So really any kind of self-generation or
cogeneration within the bounds of a facility that’s regulated by our ministry
in terms of the emissions pricing would be included in the technology fund, as
well as gas-to-power operations under our methane action plan. So anything
that’s being used to conserve methane and use it for useful electricity would
be included in the technology fund as well.
And then the technology fund does allow
anybody that’s a regulated emitter in our program to recoup some of those funds
by submitting a project, and those projects can actually include electricity
projects. So we allow both scope 1, direct emissions from facilities, and scope
2, electricity emissions, to be eligible for funding under the tech fund.
Mr. Clarke:
— Thank you for that. You, like, preambled into my next question and then
answered it, so that is much appreciated.
Talking about the cogeneration, so it
sounds like those payments from cogen, say like the Cory potash mine, will go
into the technology fund. Is there any of those facilities that will be
excluded? Specifically talking about, like, again in the definition of a
“. . . unit or group of units within the boundary of an industrial
facility that are considered an electricity facility,” are any of those
facilities going to be excluded from going into the tech fund?
Mr. Wirth:
— No.
Mr. Clarke:
— Minister, there’s been a lot of discussion recently about climate change in
general and carbon dioxide’s role in climate change. And because this bill is
discussing climate change and how the government’s going to reduce emissions,
I’m wondering if you can just comment on carbon dioxide’s role in human-caused
climate change and the rapid climate change that we’re seeing now.
The
Chair: — Actually, Mr. Clarke, this bill does
not speak to those items. It only is to deal with the greenhouse gas management
and reduction.
Mr. Clarke:
— Okay. Am I correct that no projects have been approved by the tech fund to
date, and no applications have been received?
[21:00]
Hon. Ms. Tell: — We have received 20 expressions of
interest, and we’re waiting for formal proposals for the tech fund.
Mr.
Clarke:
— Can you give me an idea of the dollar-value range of how much the
applications are proposing to use?
Mr.
Wirth:
— So the range of funding for projects for which we’ve received an expression
of interest is between about $1 million per project to $12 million
per project, depending on the project.
Mr.
Clarke:
— So with $29 million in the fund, it’s reasonable that the fund could be
used up fairly quickly. Can you give me an idea of how much you would expect to
be bringing in from OBPS that’s been collected, say in the last year, January
2022 to December 2022?
Mr.
Wirth:
— Thanks for the question. The estimation of compliance payments has been a
challenge just because the program is undergoing its first cycle. And so all of
the pre‑2023 compliance payments were based on the old federal benchmark
and the previous Saskatchewan OBPS program, which had a very different way of
calculating compliance, different performance standards, and also a different
credit regime for performance credits.
Under
the new 2023 to 2030 Saskatchewan output-based performance standards program,
we don’t have any compliance payments from that program yet and so we’re
waiting for the first compliance payments to be made again starting this
calendar year, before December 31st, 2024 for the electricity sector. To start
to be able to input that data into our . . . We’ve built a bottom-up
supply-demand model to do future forecasting for compliance so that hopefully
we can avoid any large swings.
But
it’s very difficult because there’s just a lot of variables in terms of
compliance. And so some of those variables could be in electricity where
another industrial facility could choose to reduce its emissions intensity
below its permitted amount and earn credits and so no longer owe compliance. A
regulated emitter that is above its permitted amount and owes compliance can
buy a performance credit from another regulated emitter, or it can buy a carbon
capture and utilization and storage credit from another regulated emitter, in
which it will not be paying compliance into the tech fund.
And
we don’t have any credit-banking behaviour to input into the model that we’ve
built yet. Once we have some of that information and can input that into the
model, the model will become better at forecasting that compliance.
So
the other variables include, you know, a rising carbon tax by $15 a year. For
the electricity sector another variable is the demand for electricity, which is
very hard to predict, and the different sort of supply options that are being
considered. And then even for the small modular reactor, this investment fund,
there’s a lack of clarity around investment returns for that particular fund.
So that’s something that, yeah, we’re looking to better estimate going forward.
The
budget released this week will have some information, at least estimates, for
the 2023 compliance year. But we’re still receiving emissions returns for those
other compliance years that you mentioned — ’21, ’22, and then eventually ’23
from the electricity sector later this calendar year. So we don’t have concrete
emissions forecasts now, but over time those forecasts will become more and
more accurate.
Mr.
Clarke:
— So you must have some kind of estimate though. The amendment is to eliminate
electricity production out of paying into the tech fund because you think it’s
going to be a significantly large amount of money that is over and above what
is needed in this fund. So there’s got to be some kind of estimated value on
this.
Hon. Ms. Tell: — Further details regarding revenue
estimates for 2023 compliance here will be included as part of the ’24‑25
budget, which will be released on March 20th, which also includes the ’23‑24
third quarter report.
Mr.
Clarke:
— So going back to kind of what you spoke about, you know, 21 projects or
proposed ideas, was that right? Applications, proposed . . .
expressions of interest. Thank you. With $29 million, some of them up to
$12 million, like to me if, say, three of them are at 29 or two of them
are at $12 million each, we’re already at $24 million.
So
I’m wondering why . . . What’s the rationale for eliminating
electricity generation then, if these funds could be gone through so quickly?
Mr.
Wirth:
— So one of the primary drivers for using those funds, electricity facility
compliance payments for clean electricity, is the benefit that that has for
every single residential and industrial user of electricity in the province, so
anybody that’s connected to the grid.
We
have one of the largest electricity grids in Canada and a small population, and
we’re very energy-intensive. And so by using those funds for clean electricity
for future capitalization of potentially a first SMR in the province, that
supports every industry member as opposed to just a few in industry. And so the
technology fund was not designed to necessarily fund every single project 100
per cent. It’s a competitive, application-based program.
Based
on the expressions of interest we’ve seen, I wouldn’t necessarily say that
we’re oversubscribed. We could end up landing close to that $25 million.
So I think we’ll see kind of what full project proposals come forward and which
projects are ultimately awarded, but both the technology fund, coupled with
large-scale investments in clean electricity, will benefit industry greatly.
The alternative would be for those funds to only go to a small handful of
regulated emitters — 6, 12 — when there are 150 emissions-intensive and
trade-exposed regulated emitters in Saskatchewan right now. And so by doing
this, it actually benefits all of industry and not just a subset.
Mr.
Clarke:
— How many payers are paying into the OBPS right now?
Mr.
Wirth:
— Just a point of clarification. Are you asking for the number of regulated
emitters that could be paying or that have paid?
Mr.
Clarke:
— Let’s go with both.
Mr.
Wirth:
— So there are about 160 regulated emitters in the OBPS program. About 100 of
those regulated emitters have established baselines. So we’re starting to
calculate their emissions, and in some cases their compliance, for those 100. I
don’t have the information with me right now or off the top of my head in terms
of how many are actually paying, but that’s absolutely something we can get
you.
Mr.
Clarke:
— Minister, would you commit to tabling those numbers for the committee?
Hon. Ms. Tell: — Absolutely.
Mr. Clarke: — Thank you. In the minister’s second
reading of this bill, she explained that the funds administered through the
technology fund are returned to industry through a merit-based application
process to support innovative projects that reduce greenhouse gas emissions.
Can you explain the merit-based application process?
[21:15]
Mr.
Wirth:
— So the technology fund was developed in collaboration with industry. In fact
the Minister of Environment appointed an advisory committee, an industry-led
advisory committee, to provide advice to the minister on both the governance
and the administration of the technology fund. And so we’ve published
technology fund governance and administration standard that goes through all of
the details about how the technology fund is being governed, how it’s
administered and set up, and some of the things that we’re looking for in terms
of potential projects. That information is available online.
That
advisory committee essentially advised on that standard and we accepted all of
the committee’s recommendations. And so we felt that we had broad
representation of that advisory committee from across industrial sectors, and
those committee members were going back to their companies and their industries
to make sure that they were providing feedback from their sector. And so we
developed the fund with that in mind. And we knew that industry has lots of
experience applying for funds, whether those are federal or provincial, and so
we valued the advice they had on radically simplifying the fund and
streamlining and making sure that it works for industry and government and
ensure that we get the highest quality projects.
And
so they were instrumental in coming up with the various criteria for
adjudicating the funds. So you know, at a high level some of those criteria
include emissions reductions, both absolute and emissions intensity. Those are
weighted probably the heaviest. We’re chasing the emissions reductions, and so
projects that can show significant emissions reductions at the lowest cost are
the most likely to be funded. There are some other criteria mixed in there that
are weighted a little less heavily but they relate to the addition of jobs,
economic and GDP [gross domestic product] growth, some other spinoff benefits,
and things of that nature.
But
before that, we also have a technical subcommittee that also reviews all of the
full proposals, or will be reviewing all the full proposals as they come in, to
make sure that every single project that’s being put forward by industry is
both technically and financially feasible. And so between that group and having
a really strong scoring matrix, we think we’re going to get some really, really
great projects, and we have already seen that through the expression of
interest.
We
also have a review committee that’s internal to government that’s made up of
senior government officials that are experts in their various areas and can
rely upon expertise within their ministries. And so it spans most of the
economic ministries — Environment, Finance, and Crown Investments Corporation,
Innovation Saskatchewan, in addition to Trade and Export Development, and
Energy and Resources, and Agriculture. So we have a wide-angle view of all of
the different sectors of the economy, including the Crown sector.
And
so that particular group is going to take the scoring matrix that was
recommended by the industry, that advisory committee, and apply it to the
projects that we receive, evaluate those projects, and then ultimately make a
recommendation to the Minister of Environment for projects that they believe
should be awarded based on that scoring matrix.
Mr.
Clarke:
— Is that scoring matrix publicly available?
Mr.
Wirth:
— So the specific evaluation criterion and scoring is not provided to the
proponent. That’s not typically something we make available. That’s for
internal purposes, but it is perfectly aligned with the templates that are
provided and the instructions that are provided to proponents when they’re
filling out both their expression of interest and full project proposals. And
it’s aligned with the governance and administration technology fund standard as
well. So it gives industry a clear sense of what we’re asking for and what we
value in terms of the projects putting forward, but the very specific scoring
rubric is an internal government document. And that’s typical of funding
programs across government and grant agreement programs.
Mr.
Clarke:
— I guess the concern that I would have is, you know, the transparency of how
projects are being selected, which leads me into kind of my next question,
which the minister has already kind of mentioned a bit around SMRs. The
question is, is government planning to allocate money towards the development
of an SMR from the tech fund? I think you’ve said yes already. So if so, how
much or what proportion do you anticipate going to SMRs from the tech fund?
Mr. Wirth: — Again, just to clarify, the
technology fund is a special-purpose fund. It’s outside the General Revenue
Fund. And so what we’re talking about here is earmarking funding under this
amendment Act for the purposes of clean electricity and projects, as well as
this dedicated investment fund for small modular reactor development.
With
regard to small modular reactors, that’s something that obviously the
government is exploring. It will make a final decision on whether or not to
build SMRs in 2029. But whatever the energy mix is, whether it includes SMRs or
not, whatever that baseload investment will be, in addition to all the
renewables that need to come online, will require large capitalization and
large expenses.
So
the savings fund for small modular reactors is required to save for those
future large investments that will be required, which may include SMRs or not.
It doesn’t matter what the energy mix ultimately is; the expenses are going to
be likely about the same. And they’re going to require a significant
transformation of the electricity grid. And so there’s a requirement to start
saving now, and that’s why we have the bifurcated funding as part of what we’ve
announced and what the Act is making available. But the details of that split
will be made available when the budget’s released on Wednesday.
Mr.
Clarke:
— So just so I understand, there’s two funds here, the tech fund and the SMR
fund, and in the budget we will see how those are being differentiated?
Mr. Wirth: — That’s correct. So the technology
fund is a separate fund and, in addition to that, the compliance proceeds from
electricity facilities that has not been deposited into the technology fund
will be used for two purposes.
The
first purpose that we’ve been talking about is for clean electricity operating
expenses, and so that will be managed by the Ministry of Environment. And then
the other fund using electricity proceeds will be the investment fund for small
modular reactors, which is being managed by investment experts within the
Ministry of Finance. So three funds.
Mr.
Clarke:
— Okay. What proportion of money is going into which fund? How is that being
differentiated?
Hon. Ms. Tell: — That’s in the budget that’s going to
be released on Wednesday.
Mr.
Clarke:
— So just I want to clarify with the minister. The expected decision about SMRs
is coming in 2029. Is that correct?
Hon. Ms. Tell: — That’s correct. I mean that figure
was put in there. Whether it’s exactly in 2029, I guess we’re just kind of
foreshadowing it, that it’s possible.
Mr.
Clarke:
— Okay.
Hon. Ms. Tell: — Okay?
Mr.
Clarke:
— Are residents or communities, say for example like a solar co-op, able to
apply to the tech fund?
Hon. Ms. Tell: — As was talked about earlier, it’s
only regulated emitters that submit to the tech fund. And no, they aren’t
available and able to apply to the tech fund for funding.
Mr. Clarke: — Thank you. Can you explain why the
clause “for any other purpose the Lieutenant Governor in Council may direct” is
needed in the bill?
Hon. Ms. Tell: — Anything that’s approved has to be
within the authority of the Act. That particular phrase is pretty standard in
most documents that we’re dealing with here, with amendments or legislation and
regulations. And given what we’re facing as a country or as a province, it
gives us maximum flexibility with changes in technology, whatever the case may
be, so that we can quickly, ably address the new technologies that may come on
board. But it all has to be within the authority of the regulations.
Mr.
Clarke:
— So it has to be used for, like, improving the energy . . . or
lowering emissions and, like, clean electricity?
Hon. Ms. Tell: — Yes. The purposes of the regulation.
Mr.
Clarke:
— Okay.
Hon. Ms. Tell: — They still have to be adhered to.
Mr.
Clarke:
— Okay. So again, just so that I understand, it’s not possible for the money to
be moved into, say, the General Revenue Fund by the Lieutenant Governor in
Council directive?
Hon. Ms. Tell: — No, it cannot.
Mr.
Clarke:
— Okay, thank you. We’ve talked about who can apply to the tech fund. Am I
correct in . . . Are Crowns allowed to apply, since they are
regulated?
Hon. Ms. Tell: — The only Crown corporation that we
have that could be considered a regulated emitter is SaskEnergy. SaskPower will
not be able to apply.
Mr.
Clarke:
— Okay. Within the merit-based application process, is there any kind of weight
given to smaller contributors so they can have, like, an equal opportunity to
access the fund or any kind of consideration in that regard?
Hon. Ms. Tell: — As Aaron referred to, is that we are
chasing emissions reduction. We need something of substance to ensure whatever
that may be, but they have to be significant depending on the metric, and
weighted towards reducing emissions in the province of Saskatchewan.
[21:30]
Mr.
Clarke:
— Would the minister be willing to table the reports and recommendations from
the advisory committee on applications?
Hon. Ms. Tell: — Mr. Clarke, I’m just clarifying what
it is you’re actually asking for.
Mr.
Clarke:
— So just reports coming from the advisory committee around projects. The
recommendations of which projects will be approved.
Hon. Ms. Tell: — I think you’re talking about the
review committee. Those are the ones that make recommendations, if I’m not
mistaken. That’s why I’m asking for clarification.
Mr.
Clarke:
— Yes. The review committee. Thank you.
Mr.
Wirth:
— So there would be a concern, I think, of sharing sensitive information that
could be a competitiveness concern for industry. And so that wouldn’t be
typical of any other program that we would have, where we’re — and there are
others — where we’re making those recommendations. And that advice is internal.
We’re
also ultimately going to seek government direction on the final wording of the
projects. And so all of the information that goes into that would, I believe
would be of a cabinet confidence and I believe a mandatory exemption from
disclosure as well.
So
it’s not typical of any of our other programs. We’re aware of Quebec and Nova
Scotia that do almost identically what we do with our technology fund, and I’m
not aware of any information that they sort of table or release publicly in
that regard.
Mr.
Clarke:
— Thank you. I have no further questions.
The Chair: — Seeing no further questions from
committee members, we will now move forward to voting off the clauses in this
bill.
Clause
1, short title. Is that agreed?
Some Hon. Members: — Agreed.
The Chair: — Carried.
[Clause
1 agreed to.]
[Clauses
2 to 8 inclusive agreed to.]
The Chair: — His Majesty, by and with the advice
and consent of the Legislative Assembly of Saskatchewan, enacts as follows: The
Management and Reduction of Greenhouse Gases Amendment Act, 2023.
I
would ask a member to move that we report Bill No. 154, The Management
and Reduction of Greenhouse Gases Amendment Act, 2023 without amendment.
Mr. Francis: — I so move.
The Chair: — Mr. Francis so moves. Is that
agreed?
Some Hon. Members: — Agreed.
The Chair: — Carried. Minister, if you have any
closing remarks you’d like to make this evening.
Hon. Ms. Tell: — Yes, of course. I’d like to thank
you and all the people that facilitate this: Hansard; and of course the — yeah,
okay, yeah I get it — the committee members; my two colleagues here; and of
course the opposition members for attending here tonight. Thank you.
The
Chair:
— Thank you, Minister. Mr. Clarke, if you have any closing remarks you’d like
to make.
Mr.
Clarke:
— I would join with the minister to thank the Clerks and all the folks, and
especially the ministry officials for being here and patiently answering all my
questions. Appreciate the work that you do every day for Saskatchewan people in
trying to reduce emissions due to climate change. Important to do our part here
in Saskatchewan, so I appreciate that very much. Thank you.
The Chair: — And that concludes our business for
this evening, and I would ask a member to move a motion of adjournment. Mr.
Ottenbreit has moved. All agreed?
Some Hon. Members: — Agreed.
The Chair: — Carried. This committee now stands
adjourned to the call of the Chair. Thank you, everyone.
[The
committee adjourned at 21:36.]
Published
under the authority of the Hon. Randy Weekes, Speaker
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