OTTAWA — The federal budget includes a measure that could have a huge impact on the vast number of drivers, with a new initiative that will reward those who purchase fuel-efficient vehicles and penalize those who drive gas-guzzlers.

Described as a "performance-based rebate program," the first initiative will provide up to $2,000 to Canadians who purchase environmentally friendly vehicles.

Vehicles that qualify for the rebate will include hybrids that run on a mixture of gas and electricity, fuel-efficient cars that run on conventional fuels, and "the most efficient of the E-85 fuel and flex fuel vehicles."

Transport Canada will release a more specific list of vehicles that qualify for the rebates.

To begin with, new automobiles with a combined fuel consumption rating of 6.5 litres of fuel per 100 kilometres or less; and minivans, SUVs and light pickup trucks with a consumption rate of 8.3 litres per 100 kilometres, or less, will be eligible for the rebate.

The basic rebate amount will be $1,000, and an additional $500 will be added for each half-litre per 100-kilometre improvement in the combined fuel-efficiency rating of the vehicle below the threshold.

The rebate will max-out at $2,000, and vehicles purchased or leased March 20 and later will qualify.

Following are a list of the rebates for various vehicles (fuel efficiency rating in brackets):

• Toyota Prius: $2,000 (4.1)
• Honda Civic Hybrid: $2,000 (4.5)
• Toyota Corolla: $1,000 (6.3)
• Mini Cooper M6: $1,000 (6.5)
• Ford Escape HEV 4x4: $2,000 (7.4)
• Saturn Vue Hybrid: $1,000 (7.9)
• Chevrolet Impala: $1,000 (12.3)

Aaron Freeman, the policy director for Environmental Defence, told CTV.ca the initiative looks good, but it has yet to be seen how effective it will really be.

"It's good that it rewards people who make the right decisions, but it's fair to ask whether it encourages that behaviour or whether they would do it anyway," Freeman said.

The budget also imposes a "green levy" on new gas-guzzling passenger vehicles, excluding trucks.

A charge of $1,000 will be levied on Canadians who purchase new vehicles with fuel-efficiency ratings of between 13 and 14 litres per 100 kilometres. The levy will increase by $1,000 for each full litre above the 13-litre benchmark, to a maximum of $4,000.

"It is expected that this measure will increase federal revenues by $110 million in 2007-08 and $105 million in 2008-09," the budget reads.

The budget also provides the following:

• $6 million over two years to increase funding to so-called "scrappage" programs that take old, inefficient vehicles off the roads;
• A target of a 15 per cent reduction in greenhouse gas emissions for government vehicles from the 2002-03 emissions levels. This will be accomplished by increasing use of vehicles that run on alternative and blended fuels as well as hybrid cars;
• A previously announced initiative that requires 5 per cent renewable fuel content in Canadian gasoline by 2010, and measures to boost the renewable content in diesel fuel and heating oil;
• Measures to make $500 million available over seven years to help the private sector develop renewable fuels produced from agricultural and wood waste products.

Other previously announced efforts include tax exemption for donations to ecologically sensitive land, $300 million to protect Canadians from toxic substances, $2 million to Vancouver's Stanley Park, $225 million to conserve ecologically sensitive land in southern Canada, and $30 million to protect the Great Bear Rainforest .

It also sets out $93 million toward a National Water Strategy, comprised of efforts that range from $11 million in funding for Great Lakes cleanup; to $39 million on research to strengthen fisheries; and $19 million over two years to "advance the health of the oceans and support greater water pollution prevention, surveillance and enforcement along Canada's coasts."

Freeman said many of the initiatives fall far short of what is needed, such as $11 million over two years to help clean up the Great Lakes. That number is considerably lower, he said, when compared to the $5 to $10 billion the U.S. is currently considering spending on cleaning up the lakes.

The budget overall -- touted as proof of the Conservatives' new green agenda --is a disappointment for the environment, Freeman said.

"What we're seeing here is falling short. It's a lot of already announced stuff," he added.