OTTAWA (CP) – Gas guzzlers will be dinged with a new tax of up to $4,000, fuel-efficient cars will get a rebate worth up to $2,000 and old wrecks will be offered a short-cut to the junkyard, under Monday’s federal budget.
The new tax treatment for cars is among $4.5-billion worth of environment-related measures in the fiscal blueprint, but critics say there’s no overall plan to deal with climate change.
Some measures have already been announced, such as $1.5 billion for the ecoTrust fund to help provinces pursue their green objectives.
A $1.5-billion commitment for biofuels, such as ethanol and biodiesel, will be popular with farmers but environmentalists are less enthusiastic. They say corn-based ethanol brings no net reduction in greenhouse gases once the energy used in farming has been taken into account. Canola-based biodiesel, however, gets a thumb’s up.
The budget provides $250 million to conserve ecologically important lands and implement the Species at Risk Act. It is widely acknowledged that the legislation has so far failed to protect critical habitat for endangered species.
“There’s some good stuff on nature in this budget and you cannot deny that,” said Julie Gelfand, president of Nature Canada.
The budget contains more than $400 million for a national water strategy, with cleanup money for the Great Lakes, Lake Simcoe and Lake Winnipeg as well as support for coastal cities to stop dumping raw sewage into the ocean.
Aaron Freeman of Environmental Defence praised the water strategy but said the funding is small, especially considering that $324 million will go for six new Coast Guard vessels, which he argued should not be considered an environmental expenditure.
The biggest weakness in the budget, critics say, is in the area of climate change.
There is no mention the Kyoto Protocol, and environmentalists see no sign of the “massive scale-up” in action to combat climate change recommended by former environment commissioner Johanne Gelinas in her last report.
“The government is basically ignoring the climate crisis,” said John Bennett of the Climate Action Network.
Stephen Guilbeault of Greenpeace said the budget revives Liberal programs that were cut last year. “We’re no better off than we were in 2004 and we’ve lost two precious years. There’s no upscaling of anything.”
The budget will phase out a tax break for oil sands projects, but not for another couple of years, so projects already in the ground or soon to be announced won’t be affected.
“They’re going to continue to subsidize the big oil and gas companies at the same level as today for another three years,” said NDP Leader Jack Layton. “That’s billions of dollars shoveled into the bottom lines of Exxon and such companies while they continue to pollute.”
It’s the green levy on gas guzzlers that is getting the most attention and the auto industry is not happy about it.
“It’s a tax and consumers are going to have to be told how they’re going to be impacted by this,” said Mark Nantais of the Canadian Vehicles Manufacturers’ Association.
Nantais said studies have shown that such “feebate” programs don’t work and predicted people will buy cars south of the border to avoid the tax. The green levy could also affect decisions on where to locate new manufacturing plants, he added.
“Chances are you will not have that investment in Canada, other things being equal.”
Pierre Sadik of the David Suzuki Foundation said the green levy is precedent-setting from a policy standpoint, because it amounts to a carbon tax.
“It levies a carbon tax on large SUVs and sports cars and the more greenhouse gases they emit the higher the carbon tax goes. It’s squarely within the definition of a carbon tax.”
The price tag for a Hummer or a Jeep Grand Cherokee will go up by $4,000, while vehicles like the GMC Yukon, the Toyota Sequoia and Dodge Durango could see a green levy of $2,000 per vehicle. Pickup trucks are exempt.
Vehicles eligible for a $2,000 rebate include the Toyota Prius, Honda Civic Hybrid and the Ford Escape HEV 4×4. There would be $1,000 discounts for the Toyota Corolla, Mini Cooper M6, Jeep Patriot and Chevrolet Impala.
A program to scrap high-polluting older vehicles will be built on efforts of non-government organizations in a number of provinces. Federal officials say details are still being worked out, but car-owners will get some type of incentive for scrapping junkers.
Freeman of Environmental Defence called the lack of action on climate a “gaping hole” in the budget. But he added that much can be accomplished through regulatory measures that don’t require more spending.
The government is expected soon to announce regulations requiring heavy industry to reduce its greenhouse emissions.