Welcome to the third issue of our Provincial Spotlight Series where we provide an overview of the latest policy updates, regulatory changes, and industry-specific developments in our members’ operating areas. In case you missed them, take a look at our previous issues on British Columbia and Alberta.
In this issue, we’re shining a light on Saskatchewan and highlighting key policy and industry developments around the energy sector as we lead up to the province’s upcoming general election.
Provincial Election Insights
With the provincial election scheduled for October 28, 2024, the political landscape remains focused on key issues for Saskatchewan voters, namely affordability, health care, education, and the economy. The two primary parties, the Saskatchewan Party (current governing party) and the New Democratic Party (NDP) (official opposition), have distinct positions on energy-related topics. Polling from the Angus Reid Institute in August and Mainstreet Research in September are showing a tight race with the Saskatchewan Party coming out ahead, but the NDP is in a much stronger position than it has been in well over a decade.
Key Party Positions
- Saskatchewan Party: The Saskatchewan Party, led by Premier Scott Moe, prioritizes economic growth and job creation through the private sector as the engine of the economy. The party has insisted that the federal government’s 2035 net-zero emissions target is unrealistic, and they will not be pursuing it, and will also not remit the carbon tax on natural gas. The party plans to continue to build out its energy mix, including establishing investment supports for small modular reactor (SMR) technology.
- New Democratic Party (NDP): Led by Carla Beck, the Saskatchewan NDP’s economic plan focused on job creation, supporting local businesses, and ensuring Saskatchewan workers and companies are prioritized for public infrastructure projects. In terms of climate change, its plan is to focus on green jobs, incentives for renewable energy and a plan to tackle GHG emissions.
Regulatory & Policy Updates
- Carbon Capture, Utilization and Storage (CCUS): In May 2024, Saskatchewan updated its CCUS Credit Standard, which governs the generation and trading of CCUS credits. The update added new sections on CO2 leakage liability and credit trading, further established formulas governing credit generation, and clarified registration eligibility.
- The Saskatchewan Technology Fund: The province is allocating funding to the 13 successful applicants of its first intake of the Saskatchewan Technology Fund, supporting market-ready technology, innovation and improvement projects to help regulated emitters reduce emissions.
- Oil and Gas Distance Learning High School Course: Starting in the second semester of the 2024-25 school year, Saskatchewan is launching a new oil and gas course for high school students through its Distanced Learning Centre. The program will include online theory as well as a 50-hour work placement in the oil and gas sector.
Indigenous Relations
- SIIFC Loan Guarantee: The Saskatchewan Indigenous Investment Finance Corporation (SIIFC) rolled our its first loan guarantee since it launched in 2022. The SIIFC will offer a loan guarantee of up to $100 million to support six Indigenous partners in financing their participation in Enbridge’s new wind energy project located southeast of Weyburn, Saskatchewan.
- SIIFC was created to increase access to capital for Indigenous communities and entities in Saskatchewan’s natural resource and value-added agriculture sectors. The loan guarantee through this project is expected to benefit almost 25% of Saskatchewan’s Indigenous population.
Economic & Industry Developments
- Energy Production Growth: Saskatchewan is the second largest oil producer in Canada and the sixth largest in North America with an estimated 1.2 billion barrels of oil reserves. In June 2024, oil production in Saskatchewan decreased by 0.7% compared to the previous year. Comparing June 2024 to June 2023, light oil production decreased by 2.2%, medium oil decreased by 6.1%, and heavy oil increased by 2.0%.
- Expanded Mineral Exploration Incentive: The Targeted Mineral Exploration Incentive (TMEI) and the Saskatchewan Mineral Exploration Tax Credit are attracting more investment. 28 critical mineral mining projects were approved earlier in 2024. The approved projects under the TMEI made $62.3 million in overall drill project expenditures. Saskatchewan is well positioned to continue to grow as a major global supplier of potash and uranium and is diversifying its exports through the production of helium, lithium, copper and zin.
Challenges & Risks
- Federal-Provincial Tensions: Ongoing disputes between the provincial government and the federal government continue around several energy related issues.
- Labour Shortages: Like much of the Canadian energy sector, Saskatchewan is facing challenges related to labour shortages as the need for skilled workers in both traditional and renewable energy sectors continues to be a key issue for industry participants.
The Bottom Line
Saskatchewan’s energy landscape is shifting with the gradual integration of renewables and emission reduction technologies in the traditional energy sector. For the energy service, supply, and manufacturing sector, this presents both challenges and opportunities.
The government’s support for emission reductions initiatives, alongside continued investment in oil and gas, creates growth opportunities. Meanwhile, the rise of renewables like geothermal opens new market possibilities for companies that diversify their operations.
