Ratifying the Kyoto protocol could force plant closings throughout Canada and cost the country's manufacturing sector as many as 450,000 jobs by 2010, the Canadian Manufacturers & Exporters association is warning.
"The cumulative impact of meeting Canada's Kyoto target would be the equivalent of a one-year recession," the CME says in a report to be released today called "Pain Without Gain: Canada and the Kyoto Protocol."
Ottawa is coming under pressure to decide whether Canada will ratify the 1997 Kyoto accord, negotiated in Japan by 150 countries, which requires signatories to cut emissions of global-warming gases by about 6 per cent from 1990 levels by the end of 2012.
The federal government has said it hopes to ratify the deal, but, in the four years since the accord was signed, has yet to develop a detailed plan showing how Canada will meet its Kyoto emissions targets -- a delay that's making business groups nervous.
"We've been working on this for over four years of consultation and we still don't have a reliable economic analysis that can tell us what the costs will be," said CME chief economist Jayson Myers.
The CME's estimate of 450,000 lost manufacturing jobs -- or about 20 per cent of the country's manufacturing base of 2.2 million workers -- is based in part on the assumption that curbing emissions will impose new costs on businesses and reduce their competitiveness compared to the United States. Being less competitive would cost Canadian companies contracts and jobs, the CME reasons.
Countries are bound by the treaty's obligations once they ratify the deal. But the United States, Canada's largest trading partner, has already refused to endorse the Kyoto accord and will not be obliged to meet the same targets.
The CME fears that American companies will beat out Canadian companies for jobs and production if Ottawa ratifies Kyoto.
"The jobs will go south and so will the emissions: The production will just be picked up by another country," Mr. Myers said.
Meanwhile, the group says new technologies that might enable Canada to painlessly meet targets have not yet been invented. And it argues that industry will be left to bear a heavy Kyoto burden even if Canada achieves most of its emission cuts through less onerous means, such as purchasing emission reduction credits. (Kyoto signatories envisage an emission credit-trading system where buyers can purchase emission reduction credits from sellers who've managed to cut emissions.)
"The bottom line is that Canada will not be able to achieve its Kyoto target without damaging economic and employment growth," the CME's report says.
The federal government, which insists it can meet Kyoto targets, is currently hammering out new estimates of the Kyoto accord's impact on Canada's economy.
"It is possible, in Canada, to remain competitive and yet make sure that our air is not polluted," Prime Minister Jean Chrétien told the House of Commons yesterday.
The CME suggests in its report that perhaps Ottawa should think twice about ratifying the deal.
"It is not clear that the . . . Kyoto protocol is the appropriate mechanism for Canada in responding to the challenges of climate change. Our largest trading partner, the United States, is not covered by the agreement. [And]developing countries are not bound to emissions reductions targets either."