Protecting the environment and growing the economy go together. In 2016, the federal government worked with provinces, territories, and with input from Indigenous Peoples, on Canada’s first comprehensive climate action plan, which includes a stringent, fair and efficient price on carbon pollution. As part of Canada’s plan, provinces and territories had the flexibility to maintain or develop a carbon pollution pricing system that works for their circumstances, provided it meets the federal standard. The Government of Canada worked on this with provinces and territories for over two years. Saskatchewan remains the only jurisdiction that has not joined the national plan - the Pan-Canadian Framework on Clean Growth and Climate Change. On August 29, 2018, the Government of Saskatchewan released its plan to price carbon pollution, based on an output-based performance standards approach, which will be applied only to some of its large industrial facilities. Saskatchewan’s proposed system is on track to only partially meet the benchmark stringency requirements. Therefore, the federal carbon pollution pricing system will apply to the emission sources not covered by Saskatchewan’s system. Please contact the Province of Saskatchewan for further details on its carbon pricing system and programs. Saskatchewan system highlights Saskatchewan plans to implement its output-based performance standards system on January 1, 2019.

It will apply to large industrial facilities that emit 25,000 tonnes or more of carbon dioxide equivalent (CO2e) per year, with the exception of electricity generation and natural gas transmission pipelines. Saskatchewan estimates it will cover approximately 11 percent of the province’s emissions. Federal system highlights The federal carbon pollution pricing system will be implemented, in part, in Saskatchewan under the federal Greenhouse Gas Pollution Pricing Act with the following features: The federal output-based pricing system will apply to electricity generation and natural gas transmission pipelines, beginning in January 2019. This will cover facilities from those sectors that emit 50,000 tonnes of carbon dioxide equivalent (CO2e) per year or more, with the ability for smaller facilities that emit 10,000 tonnes of CO2e per year or more to voluntarily opt-in to the system over time.

A charge applied to fossil fuels, generally paid by registered distributors (fuel producers and distributors), as set out in the Greenhouse Gas Pollution Pricing Act, Part 1, will start applying in April 2019. Information on targeted relief for rural and remote residents, farmers and fishers is available from Finance Canada. Use of proceeds The Government of Canada has committed to return all direct proceeds collected in Saskatchewan under the federal pollution pricing backstop system through direct payments to families and investments to reduce emissions, save money and create jobs. In Saskatchewan, we will return the direct proceeds as follows: Climate Action Incentive payments : Under the proposed approach, most of the proceeds the federal government collects from Saskatchewan through the fuel charge will be returned directly to Saskatchewan individuals and families through Climate Action Incentive payments Footnote 1 .

: Under the proposed approach, most of the proceeds the federal government collects from Saskatchewan through the fuel charge will be returned directly to Saskatchewan individuals and families through Climate Action Incentive payments . Support for particularly affected sectors : The remainder of fuel charge proceeds will be used to provide support to the province’s schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, not for profit organisations and Indigenous communities, which will help save money and create good jobs. In Saskatchewan, this amount is estimated at $445 million over the next five fiscal years.



: The remainder of fuel charge proceeds will be used to provide support to the province’s schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, not for profit organisations and Indigenous communities, which will help save money and create good jobs. In Saskatchewan, this amount is estimated at $445 million over the next five fiscal years. Direct proceeds from industrial facilities under the federal output-based pricing system will be directed to supporting reductions in greenhouse gas emissions in Saskatchewan. How Climate Action Incentive payments will be calculated – a Saskatchewan family of four will receive $609 in 2019 Under the proposed approach, individuals in Saskatchewan will receive a tax-free Climate Action Incentive payment after filing their 2018 tax return starting in early 2019. Climate Action Incentive payments in Saskatchewan will be calculated as follows for 2019: $305 for a single adult or the first adult in a couple.

$152 for the second adult in a couple. Single parents will receive this amount for their first child.

$76 for each child in the family (starting with the second child for single parents). Under this proposal, a Saskatchewan family of four will receive $609 in 2019. The average household in Saskatchewan will receive $598, taking into account the various family sizes and circumstances.

Family of three Jane and Molly, who have an eight-year-old child, live in Regina. They decide that Jane will be the parent claiming the Climate Action Incentive payment for their family when she files her 2018 tax return in early 2019. She will claim $305 for herself, $152 for Molly and $76 for their child, for a total amount of $533. She will see this full amount when her tax return is assessed.

Supplement for residents of small and rural communities To further support small and rural community residents in Saskatchewan, the Government proposes to provide a supplementary Climate Action Incentive amount for people who live in small and rural communities, in recognition of their increased energy needs and reduced access to energy-efficient transportation options. This supplement will be an additional 10 per cent of the payment amount to which they are entitled. Small and rural communities will be defined as anywhere outside of a census metropolitan area (CMA), as defined by Statistics Canada Footnote 2 . Delivery of payments Under the proposal, individuals will claim the Climate Action Incentive payment on their tax return. This will involve filling out a short schedule identifying the number of adults and children in the family unit for which payments would be claimed. There will be one claim per family. The provision of Climate Action Incentive payments through the Canada Revenue Agency will ensure timely, accurate, and cost-efficient delivery.

Single parent with one child eligible for rural supplement Michael is a single father who lives in Maple Creek, Saskatchewan with his twelve-year-old son. Under the proposed Climate Action Incentive payment, Michael will claim $305 for himself and $152 for his son when he files his 2018 tax return in early 2019, for a total Climate Action Incentive amount of $457. Given that the family lives in a small and rural community, Michael will indicate on his tax return that his family qualifies for the small and rural community supplement, meaning that their payment will be boosted by 10 per cent. As a result, Michael will see an amount of $503 when his tax return is assessed.

Impact on individuals and families Climate Action Incentive payments enable the Government to encourage lower greenhouse gas (GHG) emissions without imposing a financial burden on households. The federal backstop system helps the environment and the economy because it puts a price on pollution and supports cleaner alternatives. Most households in Saskatchewan will receive more in Climate Action Incentive payments than they incur in total costs resulting from pollution pricing. As the pollution price itself encourages fewer GHG emissions, it will both protect the environment and promote green innovation. Payment amounts in subsequent years Climate Action Incentive payments will increase annually to reflect increases in the price on pollution under the federal backstop system, until at least 2022. The federal Minister of Finance will make annual announcements of Climate Action Incentive payment amounts, reflecting the increasing price on pollution and updated levels of direct proceeds. Based on current projections, Climate Action Initiative payment amounts (excluding supplement for residents of small and rural communities) in Saskatchewan in future years would be as follows:

2020 2021 2022 First adult $452 $596 $731 Spouse $225 $297 $364 Child $113 $148 $182 Family of four $903 $1,189 $1,459