Government still pondering Kyoto

Petroleum industry leaders in Canada who held their breath through the federal budget on Feb. 23 turned red in the face for no reason if they were waiting to hear tough news on how the Kyoto Protocol will be implemented.

The word Kyoto never even crossed the lips of Finance Minister Ralph Goodale, although he pumped an extra C$3 billion into environmental initiatives, on top of the C$2 billion earmarked two years ago.

That means the government has established C$5 billion in funding for the next five years, of which C$1 billion is for a Clean Fund specifically aimed at cutting greenhouse gas emissions in compliance with Kyoto.

“Canadians want us to demonstrate that smart economic policy and smart environmental policy can go hand in hand,” Goodale said.

The spending includes an extra C$225 million to extend a program to make homes more energy efficient; C$295 million in tax incentives for alternative energy generation; C$200 million to support research and development in the clean energy sector; and another C$200 million to stimulate the use of wind power.

The budget also said the government hopes to reach an agreement with the auto industry to improve the fuel efficiency of vehicles sold in Canada.

That could see rebates to consumers buying energy-efficient vehicles and fees imposed on fuel-inefficient vehicles.

But, as Environment Minister Stephane Dion said earlier in February, major industries who generate greenhouse gases will have to wait some time yet to learn how much they will have to cut emissions.

The Canadian Association of Petroleum Producers has made its case for incentives rather than penalties, urging the government to allow tax write-offs for any capital and operating expenses related to Kyoto; more federal money for energy research and development; and an accelerated and increased capital cost allowance to speed up capital stock turnover.

—Gary Park