The Harper government has secured a high-profile endorsement of its position that Canada's economy would be crippled if it was forced to meet the Kyoto accord's timetable for cutting greenhouse gases.
Today, federal Environment Minister John Baird will unveil a new study by his department that suggests complying with the Kyoto Protocol would hit Canada hard, a report that is certain to draw swift criticism from environmentalists.
The Conservatives are trying to add credence to the report, however, by also releasing an opinion from Toronto-Dominion Bank chief economist Don Drummond that effectively backs their findings.
"I believe the economic cost would be at least as deep as the recession in the early 1980s, and indeed that is the result your department's analysis shows," Mr. Drummond writes in a letter to Mr. Baird obtained by The Globe and Mail.
The Tories are expected to unveil additional opinions by experts, whom they call "validators," as they attempt to refute Bill C-288, a bill opposition parties pushed through the Commons in February.
It attempts to force the Harper government to meet Canada's targets under the Kyoto accord for reducing greenhouse-gas emissions.
Mr. Drummond's letter appears to be a political boon for the Tories, and a blow for the Liberals, as parties gird themselves for the possibility of an election campaign fought on hot-button issues such as Kyoto.
It will be difficult for the Liberals to attack Mr. Drummond, a senior Canadian economist whom political parties, including Mr. Dion's, have consulted over the years. He wasn't paid for this latest opinion, which the Tories solicited from him.
Today's announcement also lays the groundwork for the Tories' own plan to fight climate change: one outside the Kyoto accord timetable.
Kyoto's obligations would require massive action by Ottawa because under the accord, Canada is supposed to reduce greenhouse gas emissions an average of 6 per cent below 1990 levels in each year, 2008 to 2012.
Emissions have soared in recent years, making Canada's task that much harder -- especially since Kyoto's so-called compliance period starts next year and Ottawa has never enacted a complete plan.
Mr. Drummond says he accepts the thinking that the only way to fulfill Bill C-288 and meet Canada's Kyoto timetable is to slap a carbon tax of about $195 on each tonne of greenhouse gas released by companies and other emitters.
"I grudgingly accept that a massive carbon tax implemented almost immediately is the only viable option to reach the bill's goals," Mr. Drummond writes in his letter.
When fossil fuels such as oil and coal are burned, they release carbon that becomes carbon dioxide, the most prevalent greenhouse gas. A carbon tax is basically a levy on greenhouse emissions that seeks to restrict the burning of fossil fuels.
Mr. Drummond says the magnitude of Canada's required greenhouse-gas reductions under Kyoto is almost unparalleled.
"The policy shock analyzed is massive: a one-third reduction in greenhouse gas emissions for each of the next five years," Mr. Drummond writes.
"Other than as a side effect of the economic collapse of Russia, nothing close to such a result has occurred anywhere."
His letter dismisses Bill C-288 as unworkable, saying, "I sincerely hope no serious consideration is being given to implementing the policy."
He warns that such a hefty carbon tax, designed to drive down emissions, would substantially hurt the economy even if Ottawa funnelled the revenue collected from the levy back to Canadians via personal and corporate income-tax cuts.
"This shock would represent a huge loss to Canadian competitiveness. Exports would plunge and imports rise."
His only substantial quibble with the Environment Canada study is that he's not sure the carbon tax would have a relatively constant impact in later years.
The TD economist previously worked in the federal Finance Department for 23 years. He offers policy advice to politicians of all stripes, when asked, noting that the Bloc Québécois has never requested his help, and he has not shied away from criticizing Tory policies under the Harper government.
Mr. Drummond says his comments should not be interpreted as anti-environmental or suggesting that economic concerns should trump environmental needs. "The environment will also be a loser if rash policies are implemented because the course will be abandoned long before the environmental objectives are achieved."
Steven Chase