Saskatchewan Premier Brad Wall said any attempt by Ottawa to link the money it transfers to a province with that province’s carbon tax policy would be a serious attack on federal-provincial relations.
Wall said in a letter to Prime Minister Justin Trudeau that such action violates the principles of fiscal federalism and calls the threat unacceptable.
Trudeau has said all provinces must set up a cap-and-trade system or impose a price on carbon of at least $10 per tonne starting next year – increasing to $50 by 2022 – or Ottawa will do it for them.
Saskatchewan opposes a carbon tax.
The premier said memos obtained by an online publication show the federal government intends to tie a province’s stance on carbon tax to equalization renegotiations scheduled for 2019.
“I have to think that somebody gave it the okay for this to be canvassed, and I think Saskatchewan people and others deserve to know, deserve clarification that this is absolutely not going to be the case,” Wall said.
In a statement, federal Environment Minister Catherine McKenna said that there are no plans to link a carbon tax and equalization.
“The issue of pricing carbon pollution is unrelated to the federal government’s continual engagement with the provinces on the topic of equalization. Linking the two is not a conversation we are having with the provinces,” she said.
McKenna’s statement goes on to read that a carbon pricing plan is about encouraging innovation, and showing that pollution has a cost.
Premier Wall replied that he is pleased to hear that the two will not be linked.
“However, her comments do not provide the full assurance we were seeking with regard to other types of federal payments, like infrastructure funding. We require that assurance as well,” Wall said in a statement.
The premier added that Saskatchewan will continue to vigorously oppose a carbon tax, and take the federal government to court if necessary.
Equalization is a program that transfers money from richer to poorer provinces so that they can offer government services at levels similar to elsewhere.
With files from David Baxter