Saskatchewan's plan to extend coal-fired power plants as a temporary bridge to small modular reactors (SMRs) could cost the province up to $46.4 billion over the next 20 years, according to new economic analysis, raising questions about whether the strategy makes financial sense. The figure is significantly higher than the $26 billion estimate contained in leaked internal SaskPower documents, and it underscores a growing debate about whether the province's energy path is driven by economics or politics.

What Is Saskatchewan's Nuclear and Coal Strategy?

In early 2025, Saskatchewan's provincial government reversed course on a plan to phase out coal-fired power plants. Instead of retiring the coal facilities and transitioning to natural gas and renewable energy, the province decided to refurbish its existing coal plants while simultaneously pursuing the development of small modular reactors, compact nuclear units designed to generate electricity with a smaller footprint than traditional nuclear plants.

The strategy hinges on coal serving as a temporary energy source until SMRs become operational. A final decision on whether an SMR will be built in the province is not expected until 2029, with construction potentially beginning as early as 2030 and the first reactor becoming operational as soon as 2034.

How Much More Expensive Is This Plan Than Alternatives?

Brett Dolter, an associate professor at the University of Regina's Department of Economics, conducted an independent analysis of Saskatchewan's energy strategy using leaked SaskPower documents, figures submitted to the province's rate review panel, and publicly available data. His findings paint a stark picture of the financial trade-offs involved.

"If we could pick a scenario that's saving us money, saving emissions and on average saving the individual person $800 plus per year, I see that as a clear advantage to go in that direction," said Brett Dolter, Associate Professor at the University of Regina's Department of Economics.

Brett Dolter, Associate Professor, University of Regina Department of Economics

Dolter's analysis reveals that the coal refurbishment plan becomes even more expensive when carbon pricing is factored in. Without carbon pricing on heavy emitters, the cost of extending coal would be $30.2 billion over 20 years. Once carbon pricing is added, using the same values found in Ottawa's memorandum of understanding with Alberta, the cumulative cost climbs to $46.4 billion.

By contrast, the province's original plan to retire coal plants and build a combination of natural gas plants and renewable energy systems would save money, reduce emissions, and lower costs for individual residents by more than $800 per year on average, according to Dolter's calculations.

Why Did Saskatchewan Make This Choice?

The decision appears rooted in concerns about economic disruption to coal-dependent communities. The City of Estevan, home to 11,000 people and one of Saskatchewan's two coal-fired power plants, faced an existential threat under the original phase-out plan. Mayor Tony Sernick explained the stakes clearly:

"Prior to the announcements of coal and nuclear, we were, as a city, preparing to lose up to a third of our population," said Tony Sernick, Mayor of Estevan.

Tony Sernick, Mayor of Estevan

The provincial government had previously dedicated more than $10.5 million to help Estevan and Coronach, the locations of the coal-fired plants, transition to other economic opportunities. However, the reversal in early 2025 signaled a shift in priorities. Crown Investments Corporation Minister Jeremy Harrison emphasized an "all-of-the-above" approach to energy, emphasizing the jobs that would be lost if the province followed its original clean energy plan.

When CBC News asked the provincial government to respond to Dolter's analysis, it did not directly address the cost findings. Instead, the government reiterated that "reliable, affordable electricity is the foundation of Saskatchewan's continued growth" and stated it would continue to "responsibly develop and use the Saskatchewan resources we have today while building toward a future powered by Saskatchewan uranium through the deployment of nuclear energy".

What Are the Key Factors in Saskatchewan's Energy Decision?

• Cost Differential: The coal refurbishment plan costs $46.4 billion over 20 years with carbon pricing, compared to the original clean energy plan that would have saved money and reduced emissions.
• Timeline Uncertainty: An SMR decision is not expected until 2029, with operational deployment potentially not occurring until 2034, leaving a multi-year gap where coal remains the primary power source.
• Community Economic Impact: Coal-dependent towns like Estevan faced potential population losses of up to one-third without the coal refurbishment decision, creating political pressure to maintain the status quo.
• Legal Risk: The province's decision to continue operating coal plants past 2029 contradicts federal clean electricity regulations and coal-fired power regulations, potentially exposing Saskatchewan to legal challenges on multiple fronts.

What Legal Risks Does Saskatchewan Face?

Dolter warned that Saskatchewan's energy strategy puts the province at legal risk on three fronts. Canada's plan to transition away from coal dates back to 2012, when the federal government passed regulations aimed at ending most coal-fired power by the 2050s. In 2016, further regulations required all coal-fired power stations to be closed after 50 years of operation or by 2030, whichever comes first.

Saskatchewan's government has explicitly rejected these federal requirements, with Minister Harrison stating the regulations are "unconstitutional." However, carbon pricing has already been declared constitutional by courts, and the government appears prepared to litigate the other issues.

"Worst case scenario is we spend a whole bunch of money to refurbish these coal plants. That's $2.6 billion, let's say, and then we still end up losing court challenges and have to shut them off," explained Brett Dolter.

Brett Dolter, Associate Professor, University of Regina Department of Economics

This scenario would leave Saskatchewan having spent billions on coal plant upgrades only to be forced to retire them anyway, compounding the financial losses.

How Does This Fit Into Canada's Broader Energy Transition?

Saskatchewan's decision stands in contrast to Canada's broader commitment to clean energy. The federal government has been steadily tightening regulations on coal power for over a decade, reflecting a national shift toward renewable energy and nuclear power. Saskatchewan's reversal represents a significant departure from that trajectory, driven primarily by local economic concerns rather than national energy policy alignment.

The province's bet on SMRs as a future solution is not unique; small modular reactors are being pursued across North America as a potential bridge technology for communities seeking to decarbonize while maintaining reliable baseload power. However, Saskatchewan's willingness to extend coal operations for another decade or more while waiting for SMR deployment highlights the tension between immediate economic needs and long-term climate and financial goals.