Liberal Leader Stephane Dion boards his campaign plane in Vancouver, B.C., to head to Montreal, on Tuesday Oct.14, 2008. (Adrian Wyld / THE CANADIAN PRESS)

Carbon tax likely shelved for now: experts

Updated Tue. Oct. 14 2008 11:46 PM ET

The Canadian Press

OTTAWA -- Economic storm clouds and a lukewarm reception to the Liberals' Green Shift plan will likely shelve a national carbon tax for now, experts say.

Economists and environmental groups say it's unlikely future governments would adopt the policy. At least for awhile.

"I don't believe that it will completely die, but it's tough to see it being advanced by the Conservatives after they campaigned so stridently against it," Doug Porter, an economist with BMO Capital Markets, said in an email.

"I suspect that given the current financial market turmoil, the likelihood of at least a moderate North American recession, and the unpopularity of the B.C. carbon tax, that a national carbon tax will be put aside for some time."

The Conservatives attacked Liberal Leader Stephane Dion during the election campaign over his proposed carbon tax on fossil fuels, offset by income-tax reductions and special energy tax credits for the poor.

So it's hard to imagine Stephen Harper's Tories ever adopting a policy he claimed would destroy Canada's economy.

But a Conservative about-face on the carbon tax wouldn't be the first time a party has taken up a policy it campaigned against.

During the 1974 election, Progressive Conservative Leader Robert Stanfield proposed wage and price controls to prevent inflation -- to much scorn from then-prime minister Pierre Trudeau.

Trudeau brought in wage and price controls 15 months later, claiming times had changed.

Still, it's unlikely the Tories will warm to a carbon tax, said economist Jack Mintz, who holds a public policy chair at the University of Calgary.

"It seems the idea has become poison, even though there are many businesses who would much prefer seeing a carbon tax as a way of trying to price carbon as opposed to cap-and-trade systems," he said.

Cap-and-trade schemes put limits on greenhouse gases and allow companies that don't meet the targets to buy and sell credits from those with a surplus instead of reducing their emissions.

The Conservatives' environmental plan partly calls for cap and trade, along with regulatory measures. The Tory plan aims to lower greenhouse-gas emissions 20 per cent from 2006 levels by 2020.

"Even the oil patch, if you talk to a lot of companies quietly, they'll say a carbon tax is much better because you have a certainty associated with the carbon price," Mintz said.

The Canadian Association of Petroleum Producers, which represents 130 oil-and-gas companies, suggested industry wasn't uniformly against a carbon tax.

"There's a diversity of views around carbon tax, and the devil's in the details in terms of how it's implemented," said association president Dave Collyer.

"I don't think we, on a broad basis, can say that industry is for or against a carbon tax."

Earlier this year, the federal government's own National Roundtable on the Environment and the Economy urged the Tories to adopt a carbon tax. Environment Minister John Baird dismissed the suggestion.

However, three provincial governments -- British Columbia, Manitoba and Quebec -- already have, or plan to introduce, carbon taxes.

Environmentalists say it's only a matter of time before the rest of Canada follows suit.

"Eventually, we're going to have it," said Stephen Hazell, executive director of the Sierra Club.

"Unless some miracle happens and global warming just disappears -- which is highly unlikely -- we're going to have to start pricing carbon.

"And a carbon tax is the best way to get a price on carbon quickly."

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