Canada's opposition on Thursday unveiled an environmental plan to curb greenhouse gas emissions that would heavily tax polluters, but trim income taxes.

"Canadians know that we need to be bold, not blind, to the challenges we are facing today, especially climate change," opposition Liberal leader Stephane Dion said.

"We will tax fossil fuels, like coal and natural gas, according to the amount of carbon dioxide they emit when they are burned," he said in a speech.

The ruling Conservatives have been criticised over their lacklustre proposals to cut carbon emissions, and pundits believe the next election as early as September is likely to be fought over climate change.

"I think that Canadian people are very concerned about their carbon footprint and about environmental issues," commented Prime Minister Stephen Harper at a press conference, following Dion.

"But Canadians have more problems than just the carbon footprint. Canadians are struggling with the high costs of energy. This is not a time for a government to come along and say we'll raise energy prices in addition to that," he said, describing Dion's plan as "crazy environmental policy".

Canada had agreed under the 1997 Kyoto Protocol to reduce CO2 emissions to 6.0 percent below 1990 levels by 2012, but emissions have instead increased by 35 percent.

Environment Minister John Baird has maintained that the target negotiated by the previous Liberal administration is unattainable.

Last year, Baird unveiled a plan to cut carbon dioxide emissions by 150 megatons, or 20 percent based on 2006 levels, by 2020. Environmentalists and opposition parties panned the plan as doing too little, too late.

Taxing polluters

The new Liberal proposal, said Dion, would increase an average household's costs by up to $250, primarily due to higher heating and electricity costs.

This would be offset by income tax cuts of one percent to 1.5 percent, as well as tax credits for families, seniors, poor Canadians, rural and northern residents, and corporations, he said.

Emissions of carbon dioxide would be taxed at $10 per ton in the first year of the plan, and rise to $40 per ton of carbon dioxide in year four.

But there would be no added taxes to the soaring price of gasoline, as well as diesel and aviation fuel initially, as there is already an excise tax on these, Dion said.

Dion also promised if his party is elected to offer Canadians incentives to retrofit their homes; increase energy/fuel efficiency standards for appliances, cars and trucks; boost renewable power; and build new transit corridors.

AFP