Reuters | Oct 1, 2007

TORONTO, Oct 1 (Reuters) - Quebec province slapped the country's first carbon tax on energy firms on Monday, as Canadian business leaders urged "environmental taxation" to rein in greenhouse-gas emissions.

The tax, proposed more than a year ago, is expected to raise C$200 million ($202 million) a year to fund the province's plans to reduce emissions.

It includes a per-litre levy of 0.8 Canadian cent for gasoline, 0.9 Canadian cent for diesel fuel, 0.96 Canadian cent for light heating oil, and C$8 a tonne for coal.

It wasn't immediately known whether the oil companies, including Petro-Canada (PCA.TO: Quote, Profile , Research) and Imperial Oil (IMO.TO: Quote, Profile , Research), would pass along the cost to consumers.

Separately, the Canadian Council of Chief Executives said Canada should become "an energy and environmental superpower," and suggested higher energy prices to help cut emissions, the Globe and Mail newspaper reported on Monday.

Since 1990, greenhouse-gas emissions in Canada, a net exporter of energy, have risen more than in any other leading industrialized country, data submitted by the Group of Eight rich nations to the U.N.'s Climate Change Secretariat shows.

Quebec has pledged to meet its targets under the Kyoto Protocol on climate change.

Canada has signed on to the agreement, which calls for a 6-percent cut in emissions from 1990 levels by 2012, but Prime Minister Stephen Harper has said that target is impossible to achieve.

Instead, the minority Conservative government aims to cut emissions from greenhouse gases -- the key contributor to climate change -- by 20 percent from current levels by 2020.