The Cost of Bill C-288 to Canadian Families and Business

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Minister's Message

Canadians want balanced solutions to environmental protection and economic growth. Balance means making sure that economic decisions are environmentally responsible. But balance also requires that environmental decisions be economically responsible.

The passage in the House of Commons of Bill C-288 - An Act to ensure Canada meets its global climate change obligations under the Kyoto Protocol - requires that the Bill be assessed on how well it balances environmental protection and economic growth.

This report demonstrates that the implementation of Bill C-288 represents an unbalanced approach - an unbalanced approach that would plunge the Canadian economy into recession and dramatically lower the living standards of workers and families.

Bill C-288 requires that the Government of Canada reduce greenhouse gas emissions to 6% below 1990 levels beginning in 2008, through to 2012. This requires dramatic action, because the latest Canadian data submitted to the United Nations shows we are 35% above this level.

To meet this target through the 2008 to 2012 period, the report's economic model found that the necessary changes to the Canadian economy would result in a decline in GDP by over 6.5% from expected levels in 2008. This would result in a recession comparable to the one in 1981-1982, which stands as the largest recession to date in Canada since World War II.

The impacts of such a contraction would be severe:

Even assuming a highly optimistic level of access to international credits, the report suggests that a large carbon tax represents the only feasible way for Canada to meet the requirements of Bill C-288. Many businesses would have no choice but to cut production and lay off workers, leading to a major recession and increased unemployment.

The Government of Canada believes that C-288 represents an unbalanced approach that would hurt workers, families and businesses.

The Honourable John Baird, P.C., M.P.
Minister of the Environment

April 2007

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