OTTAWA - Canada's environmental record was dealt a double blow on Tuesday, with a scathing federal audit and a European Commission decision to blacklist oilsands products.

Environment Commissioner Scott Vaughan tabled a report saying the federal government’s knowledge about greenhouse-gas emissions and oilsands pollution is so spotty that key decisions are made without fully understanding the environmental consequences.

Reports said the European Commission has decided to treat exports from Alberta's oilsands as dirtier than conventional oil — despite intense lobbying from the Canadian government.

If the decision is backed up by member countries of the European Union, it would effectively block oilsands products from that market.

"All that foot-dragging on regulations to deal with climate change is coming back to bite the industry," said activist Gillian McEachern, climate and energy manager for Environmental Defence.

Exports to Europe are negligible now, but Canadian officials are concerned about the signal it sends to other countries and the effect it will have on future export potential, said Canadian trade strategist Peter Clark.

He said Canada has excellent grounds to challenge the European decision, "but I wouldn't say it's a tempest in a teapot. The government is taking it seriously."

In his audit, Vaughan found that the federal government's approach to climate change was "disjointed, confused and non-transparent."

As a result, there’s no way of telling whether Ottawa is on track to meet its targets for cutting greenhouse gases, despite spending more than $9 billion, Vaughan said.

Unless there are major changes, he doubts Canada will meet its emission- reduction targets, even though they have been dramatically scaled back since the days of the Kyoto accord. The audit showed that targets are now 90 per cent lower than they were four years ago.

"The government has lowered the bar in what it hopes to achieve," Vaughan told reporters. "It has made new commitments to reduce greenhouse gas emissions, but it is unclear whether they are achievable."

Opposition politicians pointed to the audit as more proof that the government is negligent when it comes to the environment.

"With climate-change programming already under fire from this government, it's extremely alarming to see that they have failed to put in place a proper management system to track the results of funding," said NDP environment critic Megan Leslie.

Vaughan said his calculation of $9 billion in spending on climate change since 2007 was the first attempt to add it all up.

But Canadians are not seeing much for their money, he noted.

Few of the government programs come with any monitoring. And about $6-billion worth of initiatives won’t really achieve any emissions reductions at all, at least not any time soon, the audit found.

As for the oilsands production which has raised alarm bells in the United States and Europe, Ottawa's lack of basic information prevents officials from understanding how the environment of the broader area is being affected, Vaughan added.

"When there are several development projects in the same region, it’s important to understand their combined impacts on the environment and how to minimize them," he said.

"Failure to prevent environmental impacts from the start can lead to significant problems down the road."

He said Fisheries and Environment Canada have been warning for more than a decade that they lack the data needed to assess the combined impact of the massive oilsands developments.

They’re concerned about the impact on the lower Athabasca region and the wider Mackenzie Basin of the Northwest Territories.

Yet the warnings have largely been ignored, until recently, the audit said.

"During our audit, we found that, despite repeated warnings of gaps in environmental information, little was done for almost a decade to close many of those key information gaps."

Some of the environmental effects of the oilsands are actually well understood, Vaughan said.

The government has written publicly that the projects are an enormous source of greenhouse-gas emissions and that air pollution from the oilsands has doubled over a decade. This has led to acid rain, putting lakes and forests in the larger area at risk, the audit said.

It's the emissions that have raised alarms in Europe, where companies are being driven to cleaner fuels by rules forcing them to cut emissions.

But there's much more that Canadian officials don't know about the effects of the oilsands.

Insufficient or inadequate monitoring means the government does not understand the impact that airborne toxic substances have on water, land, air, fish, wildlife and habitat in the area surrounding the oilsands projects.

"As a consequence, decisions about oilsands projects have been based on incomplete, poor, or non-existent environmental information that has, in turn, led to poorly informed decisions."

The NDP's Leslie said the findings show it's time to step back and assess the oilsands as a whole before allowing development to surge.

"We need to take a little break, to find a solution."

The government has also recognized that it has significant shortcomings and is pursuing a plan to fix them, Vaughan noted.

In July, Environment Minister Peter Kent introduced a new monitoring system that is meant to be "world class." It looks at the impact of the oilsands on biodiversity, air and water in the broader region around the oilsands.

"Our government has not given up on the environment," Kent said Tuesday.

If Ottawa makes good on its intentions, it may well be a "game-changer," Vaughan said in an interview, albeit a decade late.

"In my view, the federal government has taken an important step forward by both acknowledging the deficiencies of the current system and setting out a detailed plan to fix them," Vaughan's report said.