Big dollars at play for Manitoba in standoff over federal climate change plans

WINNIPEG—A Winnipeg newspaper says it’s learned Manitoba risks losing about $66 million in funding for low-carbon retrofits if it doesn’t soon endorse Ottawa’s general climate principles.

The Free Press says Environment Canada confirms the province will lose its share of the $2-billion fund if it doesn’t ratify the Pan-Canadian Framework on Clean Growth and Climate Change by Feb. 28.

The department says federal Environment Minister Catherine McKenna set the deadline in a recent letter to her provincial counterpart, Rochelle Squires.

Neither the department nor Squires’ office would provide the letter, citing confidentiality.

It’s the latest escalation in a 12-month standoff, throughout which only Manitoba and Saskatchewan have refused to endorse the framework.

Environment Canada says if both provinces don’t join, the money allocated for them 12 months ago will be moved to a different fund.

The money falls under the Low Carbon Economy Fund, which is to be used for projects that make buildings more energy efficient, and store or capture carbon during agricultural processes.

Each province and territory that endorses the framework will receive a baseline of $30 million, plus an amount based on population. Officials said Wednesday Manitoba would be allocated roughly $66 million.

Roughly three-quarters of the $2-billion fund will go to provinces and territories. The rest will go to projects, which Indigenous, not-for-profit and business groups can apply for, as well as provincial and municipal governments, if their ideas meet the goals of the fund.

In October, Manitoba Premier Brian Pallister proposed a carbon tax that falls short of Ottawa’s 2022 target of $50 per tonne of carbon.

The Manitoba plan sets a flat $25 levy, meaning it only complies with escalating federal benchmarks for the first 2.5 years.

On Monday, Squires said Manitoba won’t be able to get the funding because agreeing to the framework would compel it to reach the $50 target.

She said Tuesday she would be open to supporting the framework if Ottawa moves forward “without prescribing a carbon-tax level” on Manitoba. The federal Liberals have repeatedly said the two are not linked.

On Wednesday, the minister repeated the province’s claim that its plan will achieve greater emissions reductions than Ottawa’s targets, citing scientific modelling used by Environment Canada.

“Cumulative emissions are projected to drop by more than one megatonne _ 80,000 tonnes more than with the federal carbon tax,” in five years, Squires wrote in an email.

“We look forward to opportunities to discuss with the federal government how the made-in-Manitoba climate and green plan will meet their climate objectives and exceed the emissions goals of the Pan-Canadian framework.”

The deadlines for when the provinces’ carbon levies must kick in was revealed by McKenna on Wednesday.

She has asked the regions to implement a minimum tax of $10 per tonne by Dec. 31, 2018, but only compels them to have a levy by the next day, at $20, before escalating by $10 each year until reaching $50 in 2022.

Provinces have until either March 30 to confirm they’re following a federal tax system, or Sept. 1 to announce their own plans, such as Ontario’s cap-and-trade model or the British Columbia tax.

McKenna wouldn’t say whether her department has worked hard enough over the past year to get Manitoba on board, nor whether she feels Manitoba had a right to complain about its funding being in limbo.

“We will be evaluating each system. We have a backstop, and they need to meet the backstop. But we’re encouraged that the (Manitoba) government announced that they are putting a price on pollution. That is the key,” she said.

—with files from the Winnipeg Free Press