NEW – SK: Small victory for industry in government budget with level playing field created for road users

The theme for the 2021-22 provincial budget announced April 6 is, ‘Protect, Build and Grow Saskatchewan.’

Of interest to CPA members:

Tax Changes – The 2021-22 budget includes several changes that will improve tax fairness as well as a road use fee for electric vehicles at the time of registration to ensure that all road users contribute to road maintenance and replacement. This is a partial victory for CPA members as it levels the playing field for consumers who pay gas taxes.

Capital Spending – The province has allotted $3.1 billion in planned capital spending to stimulate the economy and create jobs. Spending will be targeted to hospitals, long-term care homes and schools. This will provide opportunities for CPA members that supply propane to the construction sector and for power generation.

Economy and Energy – Opportunities for the propane industry include:

• Funding for workforce development of more than $39 million to strengthen Saskatchewan's recovery from the pandemic. This year's budget takes additional measures to attract investment and create jobs in the oil sector by modernizing and expanding the High Water-Cut Program, changing the royalty status to make high water volume wells more viable and promote increased production. This may provide opportunity to deliver propane-powered generators to supply electricity for production.
• $200 million for the Accelerated Site Closure Program (ASCP) to support Saskatchewan-based oil and gas service companies and jobs. The ASCP, which allocates federal funding for the clean-up and environmental reclamation of inactive oil and gas wells and facilities, is expected to support more than 2,000 full-time equivalent jobs and reclaim up to 8,000 inactive wells and facilities over two years. This initiative will create temporary opportunities for propane retailers to supply propane for heating of temporary office facilities, power generators and work camps.
• A Growth Plan commitment to introduce a moratorium on associated gas royalties which will take effect as of April 1, 2021. This initiative will provide energy producers with approximately $3.8 million in annual royalty relief over five years. It will enable them to invest in new methane emissions reduction projects and undertake capture and commercialization of associated gas instead of venting or flaring it. Having a moratorium on associated gas royalties provides producers with an added incentive to separate propane from the gas stream for marketing.
• Nearly $175 million to provide all SaskPower customers with a 10 per cent rebate on their power bills this year.
• In May, every Saskatchewan driver will receive a rebate on their vehicle registrations from the Auto Fund.

Agriculture – The budget includes plans to expand irrigation in the province with an increased $2.5 million for irrigation development projects, providing opportunities for the CPA to advance the use of propane-powered irrigation systems. This funding will help to advance projects in areas outside of the Lake Diefenbaker Irrigation Expansion Project, through existing irrigation development programming. 

Tanis Fiss, Government Relations Director, West, will keep members apprised as more information becomes available on these programs.