Minister McKenna, it is now crystal clear that Saskatchewan will not enact a carbon tax. Under your plan, this means that the Trudeau government will be imposing a carbon tax on Saskatchewan.

Minister, could you please outline the details of the national carbon tax that will be enacted in Saskatchewan? Exactly what items will this carbon tax be applied to and exactly what exemptions will there be in areas like agriculture? Could you please also provide us with a written outline of the Trudeau government's carbon tax plan as it will apply in Saskatchewan?

Hon. Catherine McKenna, P.C., M.P., Minister of Environment and Climate Change: Thank you, honourable senator, for your question.

We've worked extremely hard with all provinces and territories over the past year. I've worked very closely with my colleagues. I've had two colleagues from Saskatchewan, most recently Minister Moe. I was very pleased about advances we were able to make with respect to an early phase-out of coal and finding an equivalency agreement.

Saskatchewan is committed to most elements of our plan. They're committed to investments in adaptation. We know that the impacts of climate change are being felt in Saskatchewan, where flooding and droughts are very real issues. They are very committed to investments in innovation, as are we, and we will be supporting Saskatchewan when it comes to innovation and mitigating emissions from a whole range of different sectors. We're going to continue working with Saskatchewan.

When I was in China I brought information on the carbon capture and storage knowledge centre. It's a partnership between SaskPower and BHP Billiton. There's great interest in this internationally. The interesting thing about carbon capture and storage is that there are economic challenges with the model right now. However, if you bring a price on pollution, it actually makes it far more economic. Pricing pollution makes sense because it enhances the cost competitiveness of innovations like Saskatchewan's solution: carbon capture and storage.

I hope that we can find a solution. I'm committed to continuing to work in Saskatchewan because I believe Saskatchewan, like all the other provinces that have signed on, is much better placed than the federal government to determine what makes sense.

I've had many conversations explaining that Saskatchewan might take a model that resembles, for example, that of B.C. British Columbia has a revenue-neutral carbon pricing system where money is given back to consumers; fuels and the agriculture sector are excluded. I think that's the kind of model that Saskatchewan may determine is best for Saskatchewan.

We're looking at a 2018 expectation that provinces and territories will have a price on carbon pollution. We believe it's extremely important. It's part of any credible plan. All the premiers, including the Premier of Saskatchewan, signed on to Canada meeting its international targets and signed on to pricing pollution being an important element of it. We're going to continue to work with all provinces and territories because we believe this is about making us more competitive, about making Saskatchewan more competitive and about creating good jobs and economic growth in Saskatchewan, too.