That started out as the Kyoto Capers is fast turning into the Kyoto Crisis for the Canadian government, as it clings to power by a thread.
Canadians, agog at a political showdown without recent parallel, are unsure whether the government of Prime Minister Paul Martin is about to engineer its own defeat by accident or design.
Ordinary citizens, petroleum industry leaders and environmentalists are equally mystified by the intentions of the three opposition parties, who ultimately will decide the fate of Martin’s administration.
The confusion started when a bill to implement the 2005-06 budget was tabled in the House of Commons.
It included a series of changes to remove all references to the word “toxic” from the Canadian Environmental Protection Act, opening the way to include carbon dioxide — the leading source of greenhouse gases — in the government’s list of regulated substances.
Conservative leader Stephen Harper said that amendment would amount to a carbon tax, which the Liberals have pledged not to impose on the oil and gas industry, and accused the government of trying to “enact Kyoto by stealth.”
“These changes would allow the government to regulate any substance at any time in any industry and then impose enormous penalties for violating these regulations,” Harper said.
“Such draconian powers are simply unacceptable in a free-enterprise society.”
He accused the Liberals of taking a “dishonest and disingenuous approach to public policy ... (that) could well be targeted against the oil and gas industry.”
A spokesman for Finance Minister Ralph Goodale and Environment Minister Stéphane Dion dismissed Harper’s concerns as “baseless” and said they had no intention of imposing a carbon tax.
Regulations called a new NEP
Harper refused to back down, declaring the proposed environmental regulations were nothing more than a new National Energy Program.
The original NEP, prepared in secrecy and introduced in 1980 as part of an omnibus budget bill, drove foreign-owned corporations out of Canada and forced Alberta to share more of its resource revenues with the rest of Canada.
The specter of carbon tax creates fears within the petroleum industry that the federal government is ready to father the Son of NEP.
For now there is waffling and hedging among the opposition parties — the Conservatives, the Bloc Quebecois and the New Democratic Party — over how they will vote on the budget.
What isn’t in doubt is that if all three form an alliance they can topple Martin’s government, triggering the second election within a year.
The Conservatives say the new environmental protection act measures are an undemocratic way of imposing wide-ranging Kyoto-related regulations that could see huge costs passed on to consumers.
NDP leader Jack Layton wondered whether the Liberals were “trying to precipitate an election.”
Unusual agreement
Amid the confusion, the petroleum industry and the environmental movement have found themselves sharing some common ground.
Pierre Alvarez, president of the Canadian Association of Petroleum Producers, agreed with Harper and Layton that the government should clearly outline its climate change plans before seeking legislation changes.
He said the industry wants to be in a position to deliver a clear message to investors about the costs and the downside of the government’s plans for implementing Kyoto.
George Fink, president of the Small Explorers and Producers Association of Canada, said there is an unfortunate parallel in the way Ottawa is moving ahead with its Kyoto plans and the manner in which it enacted the NEP in 1980.
David MacInnis, president of the Canadian Energy Pipeline Association, was startled by word from Environment Canada that an earlier deal negotiated over two years by Natural Resources Canada and the pipeline operators would no longer be honored. That deal included a concession by Natural Resources Canada that the cost of developing systems to track greenhouse gas emissions from natural gas pipelines would be prohibitive.
“I find it very strange that one department of the federal government would not respect an agreement made by another department,” MacInnis said. “It’s cause for significant concern. It adds to the uncertainty around this whole file.”
Complicating matters for the government, eight of Canada’s leading environmental groups said that regulating greenhouse gas emissions under the environmental protection act would create an “unnecessary and divisive” debate.
The coalition, including the Sierra Legal Defense Fund, Greenpeace and the David Suzuki Foundation, said the current definition of toxic substance is broad enough to include carbon dioxide on the greenhouse list.
For the government to clarify its intentions, the groups want a full Kyoto implementation plan unveiled as soon as possible.
Even if the government was willing to go along with that proposal, it may not survive long enough to comply.
