Saskatchewan Historical context
Jurisdiction over natural resources was transferred to the Province of Saskatchewan from the federal government in 1930 and oil and gas production began in the province in the 1940s, fostered through extensive government subsidies and land concessions. Oil production increased steadily after 1972, alongside moves to increase public involvement in, and benefits from, the sector. The Saskatchewan Oil & Gas Corporation (Sask Oil), a provincial crown corporation, was created in 1973 by the New Democratic Party government led by Premier Blakeney and was active in exploring, developing, and marketing the province’s oil and gas. At this time, the government also proposed 100% tax on “windfall” profits from world oil price increases and implemented a Saskatchewan Heritage Fund in 1978 (an investment fund to save revenues from oil and other natural resources for the future and to invest in social programs). The 1982 election of the Progressive Conservatives reversed this position on oil development, with the government reducing royalties and taxes on oil and privatizing Sask Oil in 1985. These trends continued under subsequent PC and then NDP governments and the Heritage Fund was terminated in 1992 (Archer 1980, Pitsula 2009, and Warnock 2004).
The Saskatchewan Party, which formed a majority government in 2007, is focused on fostering economic growth primarily through (private) natural resource extraction (oil, gas, potash, uranium, and coal). The provincial government actively fosters the oil and gas sector through maintaining low taxes and royalties, providing research funding (such as funding for the University of Regina’s Petroleum Technology Research Centre), supporting carbon capture and sequestration projects, creating incentives for new wells, streamlining regulatory processes, alongside avoiding new regulations on greenhouse gas emissions (Sawyer and Gass 2014). The Government of Saskatchewan has also encouraged the development of oil sands deposits in the province; the first oil sands rights sale was issued in 2007. One company conducted exploration work but, to date, no oil sands resources have been developed in Saskatchewan.
The government’s approach is notably attractive to the petroleum industry. Based on its survey of petroleum exploration companies, the Fraser Institute ranks Saskatchewan as the number one jurisdiction in Canada (and third globally, behind only Oklahoma and Mississippi) in terms of its “policy perception index”—a measure demonstrating that industry perceives Saskatchewan to be the most attractive province in which to invest in Canada. Saskatchewan was also ranked first in terms of “regulatory climate index,” with petroleum companies clearly signaling that Saskatchewan offers the lowest “cost of regulatory compliance” and the most appealing “environmental regulations” to industry (Jackson et al. 2014).
References
Archer, J.H., 1980. Saskatchewan: A History. Western Producer Prairie Books, Saskatoon.
Jackson, T., Angevine, G., Fathers, F., 2014. Global Petroleum Survey 2014. Fraser Institute.
Pitsula, J.M., 2009. Saskatchewan's Path to Economic Development, in: Porter, J.M. (Ed.), Perspectives on Saskatchewan. University of Manitoba Press, Winnipeg, pp. 105-123.
Sawyer, D., Gass, P., 2014. Regulating Carbon Emissions in Canada: Climate Policy Year in Review and Trends, 2013. International Institute for Sustainable Development.
Warnock, J.W., 2004. Saskatchewan: The Roots of Discontent and Protest. Black Rose Books, Montreal.
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The content for this province was peer-reviewed in April 2015. We’d like to acknowledge the assistance of the external reviewers and Brittany McNena who contributed to this webpage content.
