The regulatory framework places absolute caps on air pollutants such nitrogen and sulfur oxides in the short-term, but loopholes in the mandatory regulations targeting greenhouse gases could allow emissions to rise for another decade for companies that choose to offset a portion of their greenhouse gas emissions by paying the carbon tax into a new technology fund.

The framework would set an annual intensity target of 18% that would increase by 2% per year to reduce the growth in emissions before it could translate into absolute reductions. New facilities would also be exempt from any targets for three years, while those that proved they could not reduce emissions with existing technology would be exempt from any requirements to make reductions.

But many details were missing from the plan that the newly elected Conservative government started developing in the spring of 2006 when it rejected Canada's international commitments under the Kyoto protocol on climate change and scrapped a multibillion-dollar plan that was designed to fight global warming.

Although the government has spent the past year doing extensive consultations with all major industry sectors, Environment Minister John Baird hinted there could be much more negotiations in the years to come with sectors such as auto manufacturers to establish specific standards and regulations.

"This is a mammoth undertaking," Baird said at a news conference. "It doesn't end today. Global warming, climate change is one of the biggest ecological threats the environment has ever faced, and it's going to require work every day, every week, every month and every year."

While he denied he was setting a carbon tax through the creation of the technology fund, Baird said his plan would force polluters to pay instead of subsidizing their efforts to clean up the environment with taxpayers money, as the former Liberal government had proposed.

Companies could also meet their reduction targets by buying credits on a domestic trading market from businesses that exceeded their targets, or by sending money overseas to finance projects certified by the United Nations to reduce emissions under the Kyoto protocol's Clean Development Mechanism.

Although the government predicted costs as high as $7-billion to $8-billion to the Canadian economy to meet its targets, Environment Canada officials estimated up to $6-billion in health benefits from reduced air pollution and related respiratory illnesses.

At a background briefing for reporters, the officials said it might result in minimal job losses, but the plan noted that "economic costs of regulation are often difficult to measure," since they depend on a variety of factors. It appeared to contradict a study released by Environment Minister John Baird last week who warned of a skyrocketing energy prices, rising unemployment, and a crippling recession if the government forced companies to reduce emissions to meet Canada’s Kyoto protocol target.