January 14, 2008 / 6:43 PM / 10 years ago

Canadian government cool to provincial carbon taxes

NORTH VANCOUVER, British Columbia (Reuters) - Canada’s finance minister expressed concern about provinces enacting their own carbon taxes on Monday, saying a piecemeal approach to cutting greenhouse gas emissions could end up hurting industries and consumers.

<p>Canada's Finance Minister Jim Flaherty stands to speak in the House of Commons on Parliament Hill in Ottawa November 27, 2007. REUTERS/Chris Wattie</p>

The Conservative federal government has been cool to the idea of using a carbon tax to penalize the burning of fossil fuels, but Quebec has implemented the country’s first such fee and British Columbia is eyeing the idea.

Finance Minister Jim Flaherty said sectors such as the auto industry were worried about the cost of having to deal with multiple provincial regulations, adding that Ottawa preferred that the provinces worked on a national approach to cutting emissions linked to global warming.

“(Consumers) don’t want to pay more for cars, they don’t want to pay more for other things because governments can’t get their acts together,” Flaherty told reporters in North Vancouver.

Flaherty’s complaint did not use the word carbon tax, although the answer was to a reporter’s question on his opinion about carbon taxes.

Quebec’s carbon tax is expected to raise C$200 million ($196 million) a year to fund the province’s plans to reduce emissions, but some energy-intensive industries have complained it will make them uncompetitive.

A panel appointed by the federal government this month recommended that Ottawa accept a carbon tax or other charges on greenhouse gases if the country is to meet its targets for addressing climate change.

The federal government, which has abandoned its commitments under the Kyoto climate change protocol, last year unveiled plans to cut emissions by up to 65 percent from 2006 levels by 2050. It had asked the panel to recommend how to do that.

Flaherty said he has discussed the issue with provincial finance ministers, and is urging the provinces to support the federal government’s emissions-cutting plan.

Many environmentalists have dismissed Ottawa’s climate change plan as grossly insufficient. Canada says the Kyoto plan will not work unless all big emitters, including China and India, accept binding targets.

Flaherty was on the Pacific Coast for one of a series of private meetings with business and community leaders on the upcoming federal budget.

He also said that while there is concern about the potential impact of an economic slowdown, he has heard from western Canadian companies about a lack of skilled workers for areas such as Alberta’s oils sands.

“We need to have more people, more skilled, more trained,” Flaherty said.

Reporting by Allan Dowd; Editing by Rob Wilson

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