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Saskatchewan Premier Brad Wall staunchly opposes the federal insistence that his government must adopt a carbon pricing plan.Mark Taylor/The Canadian Press

The federal Liberal government is cutting Saskatchewan and Manitoba out of a $1.4-billion federal-provincial, low-carbon economy program unless the premiers sign the pan-Canadian agreement on climate change.

Environment Minister Catherine McKenna provided details of Ottawa's long-promised $2-billion climate fund that is aimed at boosting the efforts of provinces and territories to reduce greenhouse gas emissions. The $2-billion in spending was initially promised over two years, but that timeline was stretched to five years in this year's budget.

Some $1.4-billion over five years will be spent on provincial and territorial programs for energy efficiency and other emission-reducing efforts, but that money is only available to those governments that are signatories to the agreement Prime Minister Justin Trudeau forged last December. Another $600-million will be allocated to the "low-carbon economy challenge" in which provinces, municipalities, businesses and non-profit groups will compete for support on the basis of emissions-reduction potential of their projects; Saskatchewan and Manitoba will be eligible for that program.

Ms. McKenna defended the decision to require Saskatchewan and Manitoba to join the pan-Canadian agreement before they can receive money from the $1.4-billion fund.

"This was part of the negotiated pan-Canadian plan on climate change, that we would be supporting actions of provinces and territories to help extend what they're already doing," she told reporters Thursday.

"We know we need to have a credible plan and a plan across the board. It's only fair that all provinces step up and be part of this plan. And we're going to be continuing to work with Manitoba and Saskatchewan. We of course would like them to be part of the pan-Canadian accord on climate change and hope they will join us."

Saskatchewan Premier Brad Wall called the Liberal plan "a new low in Canadian federalism."

"This is nothing short of extortion by the federal government," Mr. Wall said in a Facebook post.

"If this fund, which Saskatchewan taxpayers have helped create, is really about reducing carbon emissions, how does withholding those funds from green initiatives in Saskatchewan help that objective?"

Mr. Wall staunchly opposes the federal insistence that his government must adopt a carbon pricing plan that would increase the price of emissions to $50 per tonne by 2022 or see Ottawa impose its own carbon levy. He has threatened to sue the federal government if it imposes a carbon levy in his province next year, as promised.

Manitoba Premier Brian Pallister has pledged to introduce a carbon price but has offered no details and made no commitments to meet federal minimum-pricing standards. Mr. Pallister refused to sign the pan-Canadian climate deal last September, insisting at the time he was holding out over inadequate federal health-care spending.

Federal Green Party Leader Elizabeth May criticized the Liberal government's decision to extend the carbon fund over five years, saying Ottawa's effort on climate change will leave it well short of commitments made under the Paris accord, in which governments agreed to work together to keep the increase in average global temperatures to below two degrees Celsius, with a goal of no more than 1.5 degrees in warming.

"The effort is under-resourced and lacking in ambition to meet our Paris target" of limiting warming to 1.5 degrees, Ms. May said. "I can understand the benefit of getting all the provinces in the tent to work together. The problem is the federal government hasn't exercised its full authorities that it could to bring down greenhouse gases through programs it could announce and run."

The federal government is within its rights to impose a carbon tax on provinces who don’t have a plan, says Environment Minister Catherine McKenna. The Liberals said Tuesday they could impose a $10 a tonne price as early as next spring.

The Canadian Press