In his first major speech as Environment Minister, Peter Kent says Ottawa and the provinces will have to adopt far tougher regulations to reduce greenhouse gas emissions across all sectors of the economy if Canada is going to meet its 2020 target.
Mr. Kent rejected calls for a national cap-and-trade system but said Ottawa is getting ready to introduce regulations on industrial emitters - a group that would include oil sands producers.
Actions taken to date by Ottawa and the provinces will achieve only a quarter of the reductions needed to cut emissions by 17 per cent from 2005 levels by 2020, the minister noted in a speech to the Economic Club of Canada in Toronto.
"There is a great deal to do," he said, while adding that a good foundation has been laid.
While Ottawa has imposed new regulations on auto makers and is set to introduce rules on power companies, it has delayed action several times on industrial emitters such as the oil sands industry, arguing it needs to co-ordinate with the United States in that area.
"Canadians tend to get their hackles up whenever they hear terms like 'harmonize' or 'align' in the same sentence as United States," Mr. Kent said. "But however much we may growl about it, when it comes to meaningful work on the environment - and climate change in particular - there is no practical alternative."
A government-appointed advisory panel issued a report this week that did lay out an alternative to harmonization. The National Roundtable on the Environment and Economy said Ottawa should end the delay and introduce a national cap-and-trade system that would set emission limits on industry.
The Liberal Party is also advocating cap and trade, and even the business-oriented C.D. Howe Institute has produce a report arguing a cap-and-trade system could be designed to virtually eliminate any damage to the economy.
Mr. Kent said the government is developing "performance standards" for all major emitters. The government remains vague on details, but the minister has said he expects to introduce those regulations later this year.
"There's no question that environmental regulation will play a key role in fulfilling the commitment we've made - and will keep - to develop our natural resources in a responsible and sustainable way," he said Friday.
Liberal environment critic Gerard Kennedy said the Harper government's failure to regulate the oil industry's emissions has left the sector subject to international criticism and rising concerns among institutional investors.
"It does seem that the government is tethered to the oil sands in a way that even the operators of the oil sands understand is dangerous," Mr. Kennedy said. "They're getting international criticism … simply because there isn't a credible government regulating and setting up the predictable environment from them.
He said Conservatives clearly have no plan to meet the emissions target.
The Harper government is reluctant to impose regulations on "energy-intensive industries" like the oil sands in the absence of comparable U.S. moves, arguing that to do so would damage Canada's economic competitiveness.
The Obama administration has announced plans to have the Environmental Protection Agency impose new emissions regulations on industry, but faces a fight from Republicans and conservative Democrats in Congress.
David Collyer, president of the Canadian Association of Petroleum Producers, said the industry has not been consulted about Ottawa's planned regulations, and worries its competitiveness could be hurt if the government gets ahead of the United States.
He said any federal regulation should be "harmonized" with Alberta's rules, which require companies to reduce emissions by 2 per cent a year per barrel of oil produced. Environmentalists complain the province's "intensity" rules allow the industry to dramatically increase emissions as oil sands' production soars.