Canada's corporate executives have cooled in their enthusiasm for carbon taxes or "cap-and-trade" systems, as high oil prices and economic concerns make them leery of policies that will boost the cost of doing business.
The latest quarterly C-Suite survey of top executives shows that decision-makers are still keen on combatting climate change, but investing in new technologies is much preferred to government-imposed regulation.
The survey was conducted by the Gandalf Group for Report on Business and Business News Network.
"A carbon tax obviously would discourage the consumption of [carbon-based] products," said Peter Gillin, chief executive officer of Tahera Diamond Corp., "but with $140-a-barrel oil, to add to the cost over and above that clearly would be a significant burden."
Tahera, which is now under court protection from creditors, was severely hit by a 40-per-cent rise in fuel prices, Mr. Gillin said. While there were other factors in the firm's decline, high fuel costs "came right off the bottom line," he said.
Mr. Gillin's sentiments are reflected in the survey of CEOs, chief financial officers and chief operating officers.
The survey shows about 47 per cent support a carbon tax, down significantly from the 63 per cent who said it was a good idea in a C-Suite survey in February, 2007.
Fifteen months ago 21 per cent of executives "strongly" supported carbon taxes. That number is now down to 10 per cent.
Carbon taxes could emerge as a central issue in the next federal election, especially after Liberal Leader Stéphane Dion last week unveiled his proposed "carbon shift" - a carbon tax combined with broad-based tax cuts. The Conservatives, who have proposed a federal cap-and-trade system, have labelled his plan "crazy."
The C-Suite survey shows that executives are also less enthusiastic than they were 15 months ago about cap-and-trade systems that would set up a market for carbon credits.
Support has declined from 57 per cent to 47 per cent, in a little over year. This quarter's survey was conducted among 152 executives between May 27 and June 11.
The picture is similar when it comes to an endorsement of "cap-and-trade" systems that would set up a market for carbon credits. Support has declined from 57 per cent to 47 per cent in a little over a year.
There was the same drop in support - 57 per cent to 47 per cent - for Canada's abiding by the Kyoto accord, which would set strict limits on carbon emissions.
The numbers also show a regional divide when it comes to enthusiasm for carbon-reduction initiatives. In Quebec, support for these kinds of programs is far higher than elsewhere in the country.
Two-thirds of Quebec executives like the idea of a carbon tax, for example, with one-quarter "strongly supportive," the C-Suite survey showed. By contrast, less than 40 per cent of executives in the West approve of a carbon tax, with only 6 per cent expressing strong support.
"Generally Quebeckers are very environmentally-conscious" and they like to be perceived as "green," said José Mathieu, CEO of Montreal-based hybrid locomotive maker RailPower Technologies Corp. That general sentiment is shared by business executives in the province, he added.
Mr. Mathieu said cap-and-trade systems are crucial, because they force companies to measure and improve their emissions. "Carbon trading is like a speed limit on the road. If there is no limit, you can say to people 'Be prudent, don't drive fast, and be nice' but in the end it doesn't work."
