Feds' deadline to sign carbon plan or lose $66M funding an 'ultimatum,' Manitoba environment minister says

Manitoba has until the end of February to sign on to Ottawa's climate plan, or the province will lose its share of a $1.4-billion clean energy fund, spokespeople from both governments confirmed Thursday.

In an email and letter sent on Dec. 15, federal Environment Minister Catherine McKenna advised Manitoba's environment minister that the province has untilFeb. 28 to ratify the federal plan, a federal spokesperson said in an email to CBCNews.

If that doesn't happen,$66 million in funding set aside for Manitoba under the Low Carbon Economy Leadership Fund will be re-allocated, the lettersays. The letter wasprovided to CBC News on Thursday.

"It's unfortunate that Minister McKenna's office has chosen to play games with inter-governmental correspondence, especially when it involves the subject of disadvantagingManitobansthrough the form of an ultimatum," provincial Sustainable Development Minister Rochelle Squires said in a written statement emailed to CBC News by her office.

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The Low Carbon Economy Leadership fund is only available to provinces that ratified the Pan-Canadian Framework on Clean Growth and Climate Change, which Manitoba and Saskatchewanrefused to signin December 2016.

If those provinces don't agree to the framework, their shareswill be moved to the $600-millionLow Carbon Economy Challenge fund, which will be awarded to industry and public sector projects based on merit. Manitoba can still apply for that funding, whether or not itratifies the federal framework.

ThePallistergovernment revealed its own alternative plan in October, which wouldset the carbon tax in the province at a flat rate of $25 pertonne.

Earlier this week, Squires told media the province willconsider signing onto the pan-Canadian plan, but won't agree to the $50-per-tonne carbon pricethe plan mandates by 2022.

However, a spokesperson for McKenna's office told CBC News on Thursday such a deal isn't possible.

She pointed to another letter sent to provincial environment ministers by McKenna and federal Finance Minister Bill Morneauthat described the carbon price as a "central component" of the pan-Canadian agreementand outlines plans for a "backstop" measure to enforce the federal benchmark in all jurisdictions.

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In her Thursday statement, Squires said the higher carbon price under the federal plan would costManitobansan additional $260 million per year and her government's plan will be just as effective.

"Our government is intent on pursuing a constructive and direct dialogue that begins with the federal government formally acknowledging that the Pan-Canadian Framework and the federal carbon pricing backstop are not linked," she said in thestatement.

"We will also continue to advocate for our Made-in-Manitoba Climate and Green Plan, which achieves more emissions reductions than the carbon tax the federal government is threatening to impose."

Federal backstop legislation coming in January 2018

Draft legislative proposals for the federal backstop will be released in early January, according to the letter from McKenna and Morneau to all ministers. The planned backstop will come into effect by January 2019, bringing the carbon price to $20 per tonne in any jurisdiction that doesn't meet the federal benchmark.

• Ministers' letter to provinces and territories on next steps in pricing carbon pollution

Provinces that opt for the federal backstop were asked to notify the government in writing by March 30, 2018, for backstop implementation by fall of next year.

Provinces can opt to introduce their own carbon pricing system as long as it meets the federal benchmark, the letter adds, and as long as the provincial plans are laid out by Sept. 1, 2018.

"Based on the information provided, as well as follow-up information as needed, we will work with you to confirm whether yourcarbon pricing system meets the benchmark," the letter reads.