Part of the federal government’s plan for carbon tax legislation promised to return revenue to the province where it was collected.

The Saskatchewan government said it wanted nothing to do with the plan. Now, Ottawa said it could offer rebates directly to the residents of provinces that refuse to impose the tax.

"So we've said if provinces either design their own system or decide that they want to adopt our system because they think it makes sense, they'll get the money directly back,” said Catherine McKenna, federal minister of the environment. “Otherwise, the legislation is clear that we can give it back to the provinces or we can give it back directly to consumers."

Saskatchewan hopes to avoid a carbon tax by coming up with an alternative that will satisfy the federal government.

“We have a plan in Saskatchewan and we think it is a better plan,” said Dustin Duncan, minister of environment. “Our focus all along has been we need to ensure that we are resilient to the changes that are caused by climate change. The federal government is solely focused on emissions and price when it comes to carbon. We’re looking at a broader picture.”

Saskatchewan and New Brunswick are the two provinces holding out on the plan. Ottawa has already rejected New Brunswick’s plan to relabel its existing gas tax as a carbon tax.

The Saskatchewan NDP is urging the province to come up with a solution that will work.

“The Saskatchewan Party needs to come up with a solution that does ensure that the federal carbon tax will not be imposed on this province, while at the same time we are protecting our environment but also supporting and ensuring future growth for our economy,” said Nicole Sarauer, NDP interim leader.

Saskatchewan will continue to move ahead on its own carbon plan.

Based on a report by CTV Regina's Wayne Mantyka