September 19, 2008 / 10:27 PM / 10 years ago

Saskatchewan premier warns against carbon tax

BANFF, Alberta, Sept 19 (Reuters) - Saskatchewan Premier Brad Wall said on Friday that his province, which has been riding a commodity-driven boom, should not be saddled with new environmental taxes as prices for oil and grain fall from their highs of a few months ago.

Wall warned against carbon taxes or cap-and-trade schemes — now being pushed by opposition parties in the federal election campaign — that would not put money directly into a home-grown fund aimed at developing technology for cutting greenhouse gases.

“(Falling commodity prices are) even more of a reason why we shouldn’t pursue policies in the name of questionable environmental objectives that would actually harm the parts of the Canadian economy that are working,” Wall said after speaking to a business conference in Banff.

He was adamant that money raised by any carbon levy should stay in Saskatchewan, Canada’s second-largest oil-producing province, and be used to develop clean coal and carbon capture and storage technology.

The federal opposition Liberal Party, under leader Stephane Dion, is pushing a carbon tax in its campaign for the Oct. 14 election, along with a promise to cut personal taxes at the same time.

Wall, who leads the right-of-center Saskatchewan Party, said he favored the type of system employed in neighboring Alberta, in which large emitters pay a set fine per tonne of carbon above a quota. That money goes into a technology development fund.

Environmental groups have criticized that system for not going far enough to regulate lower emissions of the greenhouse gases blamed for global warming from major industrial sources like coal-fired power and oil sands plants.

Government-owned electricity producer SaskPower will be the largest payer of such fees due to its large consumption of coal, Wall said.

The company will likely spend as much as C$1.4 billion ($1.2 billion) working to develop clean-coal technology, Wall said.

“On a per capital basis, I will put that against anywhere else, except Alberta now with its C$2 billion announcement, but it even compares favorably there,” he said.

Wall declined to say if he was worried that falling commodity prices and the U.S. credit crisis could temper the outlook for more strong economic growth in Saskatchewan.

His government’s policies of paying down debt and bolstering infrastructure with budgetary surpluses will cushion the province from such fluctuations, he said.

“Fiscally, I believe we’re in the same position as we were at the end of the first quarter, but we’re going to be prudent,” he said.

$1=$1.05 Canadian Editing by Rob Wilson

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