Canadian manufacturers say they could face billions of dollars worth of extra expenses if Ottawa does not revise its controversial greenhouse gas-reduction plan.

Jayson Myers, chief economist for Ottawa-based Canadian Manufacturers and Exporters (CME), said federal Environment Minister John Baird's recently announced plan will likely force manufacturing companies to spend billions on regulatory compliance and emission reduction efforts - but may still not be carried out.

"This is nowhere near a plan," says Myers. "These are just targets."

Baird's plan emphasizes reductions in the intensity of emissions, calling for a 20-per-cent cut by 2015 on a facility-by-facility basis.

But environmentalists, scientists, federal opposition party leaders and even former U.S. vice-president Al Gore, producer of the Oscar-winning documentary An Inconvenient Truth, have slammed the Tories for failing to introduce hard emission caps in accordance with the Kyoto protocol.

Myers says Ottawa should focus on investment in new technologies and encourage companies and consumers to replace old automobiles, in-home appliances and manufacturing facilities with energy-efficient alternatives.

"Major investments in things like carbon sequestration, forest reforestation and nuclear energy have to be made," he says.

He adds the feds have failed to put forward a simple, low-cost compliance system, and money from the proposed Carbon Technology Fund could end up being diverted to regulatory-related expenses instead - and those regulations may not even be necessary because companies have already voluntarily reduced emissions.

"The minister (talks) about all these great economic consequences," says Myers. "I think that's totally underestimating what the impact will be.

"If we were really serious about meeting Kyoto, it would require economic activity to dip by 30 per cent - and that's crazy."

There is no agreed-upon methodology on how to measure pollutants. Companies could also face liabilities if they fail to meet the targets and, at the same time, pay billions on compliance, reporting and measurement systems that could change constantly.

"It's kind of a back-of-the-envelope calculation," said Myers. "Nobody can say what the overall cost of regulation is, because nobody's figured out what the regulations actually are."

During a recent speech to the Vancouver Board of Trade, Baird said companies that fail to meet their intensity-based emission targets will face fines of $100-$200 per excess tonne.

He dismisses the CME's claims as being "completely without substance."

"The reality is our plan is balanced," says Baird. "The (cost) to act will be a lot cheaper than not to comply with the regulation."

Ottawa will work with the provinces to avoid regulatory duplication, and specifically work with Manitoba and Ontario to develop an east-west power transmission grid that is designed to help curb emissions, boost domestic electricity trade and help fund new technologies.

Aldyen Donnelly, president of Vancouver-based Greenhouse Emissions Management Consortium, praises the Tories for not introducing an emissions-quota system.

Such a system, she says, would leave Canadian manufacturers that exceed their quotas open to takeovers from large European firms that operate facilities well under Kyoto's emission limits.

She would like Ottawa to introduce "product standards" that set emission levels according to the production of specific items such as oil, gas, chemicals and steel.

As it stands now, she adds, the plan has not set emission levels for new production facilities.

Meanwhile, green business leaders agree with Baird's claim that the plan will generate billions of dollars worth of new investment in clean, green technologies.

David Teichroeb, a fuel-cell business development manager for North York, Ont.-based Enbridge Gas Distribution Inc., says the plan's vision is "broad in its approach."

"It's working to capture everything from renewables to various clean technologies and pull them into the marketplace," says Teichroeb.

But, he adds, technology developers still need to understand how they can start as carbon-neutral from Day 1.

If Ottawa continues to refine the details, he says, it should continue to attract commercial capital to green technologies.

Chris Sacré, president of Sacré-Davey Innovations Inc. (SDI), which develops and operates a waste-hydrogen treatment facility and hydrogen fuelling station near its headquarters in North Vancouver, says Baird's plan means hydrogen and related technologies have a chance to succeed in the Canadian marketplace.

"What they're doing is better than doing nothing at all," says Sacré. "The Kyoto plan, unto itself, was a good thing. However, they made a decision to abort - or to turn right - rather than to follow that path. What they've put forward, it's a good start."

But Ian Bruce, a climate change specialist with the David Suzuki Foundation, says "it's simply not true" that the Tory plan will assist environmental businesses.

"It really fails to put responsibility on the major polluters," says Bruce. "There's no incentive - real strong incentive - for the clean, green industrial sector to establish new technologies, because there's no real cost on pollution."

He says Ottawa should introduce a plan based on hard caps, similar to that adopted by the European Union.

Without one, he adds, fossil-fuel producers and other large emitters will be "off the hook" and overall emissions will rise.

Bruce says the $100- to $200-per-tonne fines that Baird mentioned have not been outlined in the plan, and the Carbon Technology Fund is a "major loophole" because there is no guarantee the money will get re-invested in green technologies.

But Baird insists his strategy will do a better job of reducing emissions than its EU counterpart and result in an "absolute reduction" of emissions.

Meanwhile, Green Party of Canada deputy leader Adriane Carr says the plan is "absolutely wrong," because it reneges on the Kyoto commitment to bring down greenhouse gases to six per cent below 1990 levels.

"It's misleading, and it's the wrong way to go economically and environmentally," says Carr, who is also B.C. Green party leader. She contends the Tories have failed to understand that meeting Kyoto targets will stimulate the economy.

But Jock Finlayson, executive vice-president for the Business Council of B.C., says the plan will definitely create new business opportunities.

"We're moving into a carbon-constrained world," said Finlayson. "There's going to be pressure to reduce (carbon dioxide) emissions right across the board, not only for industry but transportation."

Baird's plan "provides a framework that industry can work with," he adds. Some large final emitters will face cost increases that will eventually flow through to consumers, but emissions-trading rules will provide the flexibility that companies need to achieve mandated reductions.

"It's the first concrete plan we've seen come out of Ottawa, so it begins to affect the level of the greenhouse gas emissions," says Finlayson. "It's overdue."

Pierre Alvarez, president of the Calgary-based Canadian Association of Petroleum Producers (CAPP), says the plan finally gives the industry something to work on.

"This is the toughest set of targets that the oil and gas industry will face anywhere in the world," he says.

"We've been ready since 2002. We had agreed with two previous Liberal governments on what was required to get going. Both those plans were left on the shelf. We've lost five years. Let's set the rules. Let's get started."

CAPP's greatest concerns surround potential duplication of provincial rules, escalating regulatory costs and an "enormous" air-quality section that Alvarez says "nobody has talked about."

Although it's tougher than two previous Liberal proposals, the industry is willing to work with Ottawa on implementation, he adds.

(Monte Stewart can be reached at monte@businessedge.ca)