Budget 2020-21 Provides Support For A Strong, Resilient Resource Sector
The 2020-21 Provincial Budget provides strong support for the growth and future economic development of Saskatchewan’s prime natural resource sectors.
“Despite recent challenges, Saskatchewan is well-positioned for economic recovery, which is due in large part to our resilient energy and resources sector,” Energy and Resources Minister Bronwyn Eyre said. “This Budget demonstrates our ongoing commitment to the thousands of Saskatchewan people employed in traditional sectors, such as oil and gas, uranium and potash. It also aims to increase development in emerging resource areas, such as lithium, helium, diamonds and nickel.”
The Budget includes $150 million for the Accelerated Site Closure Program, which supports the abandonment and reclamation of inactive oil and gas wells and facilities which gets Saskatchewan people back to work. The program will prioritize Saskatchewan-based service companies and support up to 2,100 full-time equivalent jobs. Up to 8,000 inactive wells and facilities will be abandoned and reclaimed over the life of the program.
Government has also recently introduced another SaskFirst new growth tax incentive, the Oil Infrastructure Investment Program (OIIP), which will support new and expanded pipelines, as well as new pipeline terminals, with the goal of getting Saskatchewan oil to export markets. The OIIP program provides a transferrable royalty credit worth 20 per cent of approved expenditures for eligible pipeline development projects.
A minimum investment of $10 million is required, and each project can earn a maximum of $40 million of royalty credits. The program will accept applications until March 31, 2025, and all credits will expire by March 31, 2035.
The Budget also provides continued support for existing SaskFirst incentive programs, including:
- the Oil and Gas Processing Investment Incentive, which supports infrastructure upgrades for companies, as well as value-added processing and improved emissions management;
- the Saskatchewan Petroleum Innovation Incentive, which provides transferable royalty/freehold tax credits for qualified innovation and commercialization projects; and
- the Targeted Mineral Exploration Incentive, which supports the diversification of Saskatchewan's mineral sector by encouraging exploration for base metals, precious metals and diamonds.
Government has also reinstated the Provincial Sales Tax (PST) exemptions for exploratory and downhole drilling activity, creating parity with the oil and gas sector and fulfilling another commitment made in Saskatchewan’s Growth Plan. The reinstated PST exemption for downhole oil and gas drilling services has also been expanded to include drilling for helium.
“Our resource sector provides sustainably-produced fuel, fertilizer and other key products that the world needs,” Eyre said. “We will continue to work together with our energy and resources stakeholders to create a strong economy, more jobs and a better quality of life for all Saskatchewan people.”