Brian Zinchuk is editor and owner of Pipeline Online
NDP Finance Critic Trent Wotherspoon on May 3, 2023. Legislative Assembly of Saskatchewan
REGINA – Don’t slow walk critical minerals.
That was part comments from New Democratic Party Finance Critic Trent Wotherspoon in reaction to the March 22 provincial budget. He spoke to Pipeline Online by phone on March 23, offering his thoughts on the budget’s energy initiatives.
Critical minerals such as uranium, lithium, helium, copper, potash and numerous rare earth minerals have been the subject of a lot of attention in recent days. The Saskatchewan budget increased flow-through shares for them, they were heavily referenced in the joint statement of President Joe Biden and Prime Minster Justin Trudeau on March 24, in Saskatchewan’s new Critical Mineral Strategy of March 28, and came up in the federal budget of March 28.
Asked what the NDP’s perspective on the 2023 provincial budget is, Wotherspoon replied, “We’re going to be listening to the industry and making sure we fully understand all detail of his budget. I mean, obviously, the energy sector is so critical to this province. And we need to make sure that any of the changes that might be occurring within the budget, that we really understand the interests of the industry. And it’s obviously important to this province, regions of the province, very important to investment, very important to jobs.”
The most significant change in the budget in the energy and resources portfolio was an increase from 10 to 30 per cent tax credit on flow through shares for critical minerals development. To that end, Wotherspoon said, “This is a very important industry for Saskatchewan and for the world. And it’s a real opportunity that we need to ensure we do right, and I think it’s a real strategic industry as well. So it’s critical that the provincial and federal government, work together and recognize this as a strategic industry, as a very important opportunity, and that Saskatchewan ultimately, should be a valued and important producer of critical minerals to the world.
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“The programs that have been announced by the province, don’t come with a whole lot of detail yet. There’s some legislation as well. So we’re going to have time to both examine that with the minister, but we’ll also do so with the industry. But clearly, development of this industry shouldn’t be slow-walked. It’s critical that the province and the federal government decide that this is a strategic industry in the interest of Saskatchewan and Canada and that they act on it.”
He noted lithium presents important opportunities for Saskatchewan and the world. “It’s a vital, emerging industry,” he said.
Finance Minister Donna Harpauer noted that resource revenue should be between 10 and 15 per cent (this budget being 12.5 per cent). Much higher than that, and an inevitable drop in resources revenue could mean laying off health workers, as an example, because a fall in the price oil.
Asked about that, Wotherspoon said, “Well, I think the Minister is failing to meet the moment. Right now we have significant revenue strength, including in the resource sector, and a government that’s flush with cash. But a different reality for Saskatchewan, people, households and businesses, which is one of cost of living challenge and hardship. And I think it’s on the government to provide some relief on this front, and they’ve failed to do so, which is really out of touch with, I think, their duty but also the responsibility to provide some relief.
“This is a government that stacked on tax upon tax and the hike upon fee hike and bill upon bill for Saskatchewan people in businesses. And it defies common sense in the best interest of Saskatchewan people to not offer relief. We’ve been calling for the scrapping of the power hike and the energy hike on power bills, I should say. It’s a time to provide some relief there. We’ve also called for the rollback of the PST that they added last year, and just scrap, importantly, the PST that they added on construction labor in 2017, which has really, really weakened our economic growth. It was a real gut punch to growth. It’s kind of the epitome of a job-killing tax, if you will. And we need to make sure we’re competitive. And we need to be competitive in with respect to our neighbors in Canada. And we need to be competitive with our neighbors south of the border as well.
“And, and even the inflation Reduction Act has brought on a whole lot of incentives, that we need to make sure we’re pulling the fiscal levers we can to ensure that we can advance projects and create jobs and investment here in the province.
“So we’re really disappointed to see the government not do the right thing and scrap the PST that they stuck on construction labour back in 2017.”
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SaskPower’s capital plan going to 26-27 shows a consistent $1.3 billion per year. That’s an increase of roughly $250 million compared to 2022-23 budget, but it’s not indicative of any massive capital projects in that time frame until 2027 beyond the scale of the natural gas plant under construction currently. Pipeline Online asked if Canada is to follow the U.S. in seeking to electrify the vehicle fleet, requiring effectively doubling the power generation, grid and distribution within 12 years, how can SaskPower do it for $1.3 billion a year?
Wotherspoon replied, “The province is sitting in a strong fiscal position, and I think it’s wrong for the government to be sitting on a whole bunch of resource and revenues that have been sent soaring this last year, at the same time as sending along the bill, right now, to Saskatchewan people and taking dividends out of our Crowns while doing so.
“So it’s all on the government to provide some relief, and to extend some of the windfall that they’ve received to do so, and to make this a priority. Often the Sask Party likes to use SaskPower, for example, as the piggy bank for some of their projects. We saw that force with the GTH land deals a number of years ago. It’s really important that we support that very important Crown Corporation on the power generation needs of the province. We will do so in the most affordable way, responsible way moving forward. But right now, we’re going to government sitting on a pile of cash, and Saskatchewan people facing the cost of living challenge that’s once in a generation. It’s wrong.”
Asked if the budgeted $1 billion surplus should be used for a sovereign wealth fund, Wotherspoon said, “I’ve always been a big fan of a sovereign wealth fund model. We’ve pushed for it over the years. The government gave the idea a look at one point and a bit of rhetoric. But talk is cheap on those fronts, and during the boom years prior, failed to materialize a sovereign wealth fund, at a time where they were piling on debt, draining the rainy day fund as well.
“So really, (they) didn’t leave that legacy. And I think this is an important conversation, and something that needs to have a plan at some point for as well.
“But just the same, you know, the government really seems to have given up advancing our interests in fairness for Saskatchewan, when it comes to equalization. These are important files. You need to stay principled and consistent on them to succeed. But they’re important to Saskatchewan and we’d be we’d be urging the government on this front.”
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