Manitoba signs federal climate-change plan

After months of agreeing to disagree with the federal government, Manitoba has signed on to the Pan-Canadian Framework on Clean Growth and Climate Change, less than a week before a deadline that would have cost the province $67 million in federal funding. .

Deal after months-long dispute triggers millions in federal funding for emissions projects

Manitoba's carbon tax plan will face federal scrutiny in 2019. (Getty Images/RooM RF)

After months of agreeing to disagree with the federal government, Manitoba has signed on to Ottawa's climate-change plan.

At least for the next two years.

The decision to sign on to the Pan-Canadian Framework on Clean Growth and Climate Change triggers approximately $67 million in federal funding for the province from Ottawa's Low Carbon Economy Leadership Fund. The province faced losing those funds if it did not sign the deal before Feb. 28.

Manitoba maintains its intention of setting a flat carbon emissions tax of $25 per tonne. The federal government had set a "backstop" of $10 per tonne per year, rising to $50 per tonne in five years.

Sustainable Development Minister Rochelle Squires told reporters Friday the data her government has collected suggests a flat carbon tax of $25 will meet the goals Ottawa has set on emissions.

"We have been consistent in our belief that our $25 price on carbon reflects our emissions profile adequately in Manitoba and that it will reduce emissions more than the backstop," Squires said.

$50/tonne target

Despite a federal target of $50 per tonne in five years explicitly stated in the framework agreement, federal Environment Minister Catherine McKenna says Manitoba will meet the targets for the first two years, and Ottawa will review each province's carbon price plan every year starting in 2019.

"I'm comfortable because we are going to be assessing every province's plan, and it's not just price. It's accessing the system that they come up with, and we are going to be doing that every year. But Manitoba has said they want to sign on to the plan and I think that's really important," McKenna told CBC News.

At $25 per tonne, Manitoba will exceed federal targets for the first two years. Ottawa has not signalled what specific action it might take if Manitoba is not compliant after that, but the federal government has drafted legislation for the carbon tax backstop and is conducting public consultations before introducing them in Parliament.

McKenna described Manitoba's signature as "really, really positive," since the province and Ottawa have argued over the framework and the tax for nearly two years.

Premier Brian Pallister initially held out on signing the deal in the hope of securing additional health-care funding. Pallister later ordered a legal review of Ottawa's plan.

Late in 2017 McKenna told her Manitoba counterpart that the province had until Feb. 28 to ratify the federal plan or risk losing the $67 million in funding for green initiatives.

Squires said Friday Manitoba's signature on the framework will not alter the province's commitment to flat $25-a-tonne carbon price, despite months of disagreement between both sides.

"Our governments have come to a collaborative agreement that [with] our Made-in-Manitoba approach to climate change, we are meeting the measures set out. We are committed to climate mitigation and adaptation," Squires told news outlets via a conference call from Calgary.

Squires could not identify where any of the $67 million in federal money will be spent, nor how Manitoba would earmark another $200 million or more in revenues from carbon taxes. Those decisions will come after more assessments and public consultations, Squires says.

Saskatchewan holds out

With Manitoba on board, Saskatchewan has become the lone holdout on signing on to the framework with Ottawa.

McKenna says she's worked with recently installed Premier Scott Moe when he was the province's environment minister and is confident she can bring the remaining Prairie province to the table.

"They have a huge opportunity. They have committed to 50-per-cent renewable, which is great. There is huge opportunities in wind, in particular. But we are just waiting . We certainly hope they will commit. There is the opportunity for us to work together to help finance some initiatives that important to the people of Saskatchewan," McKenna said.

The deadline to sign on to the framework is in March.