Canada's Minister of Environment Catherine McKenna has written to her counterpart in Saskatchewan saying she won't accept the province's request to avoid pricing carbon.

McKenna sent a letter to the province's Environment Minister Dustin Duncan on Friday in response to one he had sent her on March 1, saying that carbon tax would result in "carbon leakage, lost jobs and human vulnerability."

The deadline is Sept. 1 for all provinces and territories to submit their carbon pricing plans.

"To be clear, we cannot accept your request not to price carbon in Saskatchewan," McKenna wrote. "Among other reasons, it would be patently unfair for one jurisdiction to avoid participating in this important national effort to support clean growth and cut pollution.

"In the event that your government does not adopt a price on pollution that meets our standard, we would have no choice but to ensure that a price on pollution applies in Saskatchewan, just as we would anywhere else in the country. We would do so by applying the federal carbon pricing system in Saskatchewan."

Sask. Environment Minister Dustin Duncan says provincial lawyers are developing a case to oppose a federally imposed carbon tax, if one comes to pass. (Micki Cowan/CBC) McKenna said revenues raised through a carbon tax would stay in the province.

Premier Scott Moe spoke to Prime Minister Justin Trudeau face-to-face on Friday and said he reiterated that Saskatchewan is not prepared to sign any agreement that places a carbon tax on the province.

Duncan has said the province would challenge any imposition of a carbon plan, arguing that its implementation would cost Saskatchewan's economy $4 billion over five years.

"At those numbers, I don't think this province can afford not to fight this in the court if it comes to that," he said.

$62M lost by province will be back up for grabs, feds say

McKenna also addressed the province's questions on the low carbon economy leadership fund.

"Even though we will not be signing the Pan-Canadian Framework by your deadline, Saskatchewan should still receive its $62M allocation under the Low Carbon Economy Fund," said Duncan, in his letter. "These are tax dollars paid to the Government of Canada by provincial residents."

McKenna said Saskatchewan's $62-million allocation will move into the second phase of the fund, the low carbon economy challenge.

McKenna said the challenge will be open to provinces, territories, municipalities, businesses, organizations and Indigenous communities. Funding will be awarded to projects selected based on their potential to reduce greenhouse gas emissions.

Read the letter to the Saskatchewan government from federal Environment Minister Catherine McKenna below.