Conservation Council director says policy won't achieve any environmental goals whatsoever.

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Taxes work for the environment, but only when used correctly, argue conservationists. The provincial government's recently released carbon tax policy is drawing fire from environmental groups, labour unions, and manufacturers, who all say it's a tax reform that will hurt the poor and do nothing for the planet.

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"As it's being proposed by the provincial government, it's not going to achieve any environmental goals whatsoever," said David Coon, policy director for the Conservation Council of New Brunswick.

There are suggestions the carbon tax should be modeled after British Columbia's, which is based on a rate of $10 per tonne of greenhouse gas emissions. Anyone who drives a car or boat, and all corporations that transport goods or uses fuel in industrial processes, are taxed, with the charges currently amounting to an extra 2.4 cents per litre of gas.

The revenue generated from the carbon tax will be used to make up for proposed cuts to corporate and personal income taxes. The province is proposing to make a flat income tax of 10 per cent, or a two-tier income tax of nine and 12 per cent. Those with the highest incomes would see the greatest savings.

Coon says the primary way a carbon tax reduces greenhouse gases is if the revenues are used to provide direct incentives for people to convert to renewable sources of electricity, such as with grants and loans. He says all the province is intending to do is make a major taxation reform.

"They're proposing to abandon the central principal of taxation that those with the greater ability to pay, pay more. They're proposing to basically eliminate that and pay for the lost revenue by creating the carbon tax. So it's not designed to achieve environmental benefits."

The Canadian Manufacturers and Exporters is currently analyzing the proposal to determine how effective it will actually be at reducing emissions. Vice President Dave Plante says they'd have preferred to see a cap and trade system put in place.

"Then we wouldn't see all these upfront costs," he says. "We're already seeing the historic spike in the price of oil that's also fuelling increases in other forms of energy such as electricity. So it's very tough for manufacturers to swallow these types of costs over such a short period of time."

Ten to 20 per cent of operating costs for a manufacturer is typically accounted for by energy, and Plante is worried a carbon tax will cause some difficulty across all consumers by raising fuel prices. However, the one thing he likes about a carbon tax is that it would provide a greater degree of certainty that's not provided for by a cap and trade system.

Where a carbon tax simply taxes fossil fuel consumption, a cap and trade system actually sets a regulatory legally binding limit on how much greenhouse gases industries can emit. Each company has a number of carbon credits and larger industries can trade those credits with smaller industries if they happen to emit too much pollution. If they run out of credits and go over the limit they must pay fines.

"We have no regulations governing greenhouses gases coming from industry right now," said Coon. "Which is appalling."

The Citizens Coalition for Clean Air is in favour of a carbon tax, if done properly, but spokesperson Gordon Dalzell says the province has the wrong idea.

"I think it's very appropriate to put a price on the use of carbon," he said. "It does place the responsibility on people to share the burden. It's certainly a hard one for most people to accept because the price of gas is already so high, but if the tax is used to develop more efficiency programs or alternative energy sources then it's valuable. If it just goes into the general tax revenue to help government operate it won't have that benefit."

Dalzell says the money raised from a carbon tax needs to be dedicated towards finding solutions to burning fossil fuels, developing new technology, implementing bus lanes, and offering better public transit, as well as other infrastructures that will help people get off the dependency on fossil fuels.

As it is right now, Coon argues most people have no choice but to drive their vehicles to work and burn plenty of gas doing so.

"In most parts of this province there are no alternatives other than taking your vehicle," Coon says. "How are you going to drive less if you're going to get to work, you can't. So you're just going to have to suck it up and pay the additional cost and make adjustments elsewhere in your family budget.

"That's the problem with carbon taxes at the household level. It's generally agreed that a carbon tax applied at the household level will make absolutely no difference to the use of energy by those families."

The New Brunswick Federation of Labour is calling the province's proposed carbon tax policy part of a regressive tax reform full of flaws. President of the NBFL, Michel Boudreau, says it seems to be little more than a Robin Hood tax grab in reverse, taking money from the poor to fund income tax cuts for the rich.

As part of the government's plan, a tax on all forms of carbon emissions will be phased in gradually over several years, with a reimbursement credit to offset the impact of this tax on low-income New Brunswickers. That's little consolation for labour and union representatives.

Saint John Mayor Ivan Court is in support of the carbon tax, but says caps have to be placed on big industries. "They produce a lot of gases and we have to make sure they're environmentally friendly also," he said.

"It's a big subject and I don't know if any one solution is going to deal with it," said Dalzell. "We are all addicted to some degree to carbon. Putting a tax in there is going to hurt those people who use a lot of it, unfortunately it could hurt the people who use just what they need for basic life and that's the worrisome part of a carbon tax."

Public consultations are being held throughout the province this summer to gauge public reaction to the province's proposed tax policy, including the carbon tax.