Next week's federal budget will propose a streamlined environmental assessment process, something which will delight the oil patch and give provinces a larger say over resource development. "Clearly, we need to focus our attention and reviews where they really matter — on big projects with the potential for the greatest economic and environmental impact," Natural Resource Minister Joe Oliver said Tuesday in Saskatchewan. (CP/AFP Getty Images)

OTTAWA - Next week's budget will propose a streamlined environmental assessment process, something which will delight the oil patch and give provinces a larger say over resource development.

But one part under consideration for the package — reforms to the Fisheries Act that would end federal oversight over much of the country's fresh water — is proving difficult for some provinces to swallow, sources say.

The environmental changes will be pitched as part of a major theme of the budget: Get government out of the way and let corporations flourish.

They will reflect commitments made increasingly frequently by Prime Minister Stephen Harper and his environment and natural resource ministers, to remove barriers to investment and development.

Specific legislative amendments and regulatory fixes will likely be introduced later, with the budget merely outlining the new direction.

The package will eventually see Ottawa pay far less attention to small projects, impose time limits on major environmental hearings and pull out of the process altogether if a province is ready to step in with similar standards.

"Clearly, we need to focus our attention and reviews where they really matter — on big projects with the potential for the greatest economic and environmental impact," Natural Resource Minister Joe Oliver said Tuesday in Saskatchewan.

Plus, the Canadian Environmental Assessment Agency will likely cede ground in some areas to the National Energy Board and the Canadian Nuclear Safety Commission, to eliminate overlap.

At stake, says Oliver, is $500 billion in new energy and mining investment over the next 10 years.

Ottawa has shopped these ideas around to the provinces and there has been general, widespread agreement that the environmental assessment process is arcane, archaic and needs reform.

"I'm happy to say that my provincial and territorial counterparts... agree that our goal should be one project, one review, completed in a clearly defined time period," Oliver said Tuesday.

The oilpatch will stand to benefit, in particular, since changes made in the past to expedite hearings mainly benefited the mining industry, but did not directly tackle the panels often faced by oilsands projects.

"I'm encouraged by the current thrust toward regulatory reform," said Don Thompson, an executive adviser at Canadian Oil Sands Ltd. "It's time to clean it up and reset the clock for the current decade."

At the same time, funding for the major projects management office — a group of federal deputy ministers whose task is to push assessments through the system efficiently — is expected to be renewed in the budget. It was set to expire this year.

It's trickier, however, to tinker with the Fisheries Act.

A leaked draft of one proposal last week showed Ottawa wants to remove habitat provisions from the act, essentially diluting the federal government's oversight of fresh water in the face of industrial development.

Fisheries Minister Keith Ashfield insists no final decision has been made, but says current policies overreach and are under review to better reflect "the priorities of Canadians."

His office will give no details about what policies are under review, when the review will be completed, or whether it plans to consult provincial governments and other stakeholders.

Environmentalists and a large network of environmental scientists are furious about the idea and say Ottawa is ready to abdicate its national and international obligations to protect waterways.

Provinces would likely be expected to pick up the slack, but they are in the dark about how that would work and don't appreciate being handed extra cost and responsibility, some insiders said.

"If this approach is taken, groups such as ours will press the province to address the protection of aquatic habitat in legislation such as the proposed provincial water act," the B.C. Wildlife Federation said in a recent letter to Harper.

The federation said a mosaic of habitat regulations is a bad idea.

The Fisheries Act's habitat provisions are a frequent trigger for government intervention in the development of natural resources, partly because Canada has so many waterways that it's rare to find a mine or project that does not encompass a stream.

Mining companies complain that government officials have cracked down in recent years for no apparent reason, hindering their work. Industry groups in British Columbia have pressured Ottawa for years to change the Fisheries Act so that it doesn't micro-manage minor developments.

"I think the focus needs to be on preservation of key fisheries stock," said Thompson of Canadian Oil Sands.

The federal measures come as a bitter war of words between environmentalists and the government takes full flight.

Natural Resources Minister Joe Oliver has condemned "radical" environmentalists, accusing them of taking foreign money to undermine Canada's economic health by opposing the Northern Gateway pipeline proposal.

Environmentalists, for their part, accuse Ottawa of giving up stewardship of the environment to promote energy and mining projects at all costs.

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• Canada's Top Polluting Provinces

  As Canada begins the process of withdrawing from the Kyoto Protocol this year, here's a look at the country's top polluting provinces. (Mt CO2 eq refers to megatonnes of carbon dioxide equivalent, which is the standard international unit of measurement for reporting GHG emissions. It expresses all greenhouse gases emissions in terms of the global warming potential of carbon dioxide, CO2. One megatonne is equal to one million tonnes.) * Signatories to the Kyoto Protocol submit greenhouse gas emissions inventories to the United Nations Framework Convention on Climate Change annually, but the data itself lags two years behind. ** Facility-reportedemissions are those reported by large industrial facilities like fossil-fuel-powered power plants, mining An activist wears a mask depicting the face of Canadian Prime Minister, Stephen Harper, during a protest in Durban on the sidelines of the UN climate talks, on December 5, 2011. (ALEXANDER JOE/AFP/Getty Images) <em>With files from CBC</em>

• 7. Quebec - Per capita: 10.4 tonnes CO2 equivalent

  Emissions target: 20 per cent below 1990 levels by 2020 2009* emissions: - Total: 81.7 Mt CO2 eq. - Per capita: 10.4 tonnes CO2 eq. % change from 1990: -1.9 per cent % of Canada's total emissions: 11.8 per cent (**facility-reported emissions: 8 per cent) LEGISLATION: Cap and trade -- Quebec will be the first jurisdiction in Canada to adopt a cap and trade system for reducing emissions, effective January 2012. The first year will be a transition year in which participants are to get a feel for how the system works but are not obliged to comply with the caps. Under the system, the province establishes an overall emissions objective and then sets specific caps on individual sectors based on average emissions in that sector or on a company by company basis. Emitters whose emissions are below the cap will be able to sell emissions credits to companies whose emissions exceed the cap. Quebec will be part of the same cap-and-trade system as California since both are members of the Western Climate Initiative. Some environmental groups, including the Pembina Institute, have said the auction price for emissions credits that Quebec has set --$10 per tonne in 2013 and $15 per tonne in 2020 -- is too low to motivate significant reductions in emissions and have urged the province to raise them. Carbon tax -- Quebec was the first jurisdiction in North America to introduce a carbon tax in 2007. The tax applies to about 50 fuel producers and distributors that use a large amount of hydrocarbons. The $200 million collected annually through the tax goes to fund projects that are part of the province's Climate Change Action Plan. The tax rate varies depending on the amount of carbon released during combustion: - Gasoline: 0.8 cents/litre - Diesel: 0.9 cents/litre - Propane: 0.5 cents/litre - Light heating oil: 0.96 cents/litre - Heavy heating oil: 1 cent/litre - Coke used in steel making: 1.3 cents/litre - Coal: $8/tonne Energy -- It's no accident that Quebec is one of the few provinces to have reduced its emissions from 1990 levels: 96 per cent of the province's electrical power comes from renewable sources. While hydro power is its biggest strength, it has also invested heavily in wind power and aims to develop 4,000 MW of wind-generated electricity by 2015. (Alamy)

• 6. Ontario - Per capita: 12.6 tonnes CO2 eq.

  Emissions target: 15 per cent below 1990 levels by 2020 2009* emissions: - Total: 165 Mt CO2 eq. - Per capita: 12.6 tonnes CO2 eq. % change from 1990: -6.5 per cent % of Canada's total emissions: 23.9 per cent (**facility-reported emissions: 20 per cent) LEGISLATION: Energy -- The province passed the Green Energy Act in 2009, which set the course for the province's transition to cleaner sources of energy and greater energy efficiency. It came with financial incentives for the development of wind, solar and biomass power-generation projects and created the feed-in tariff program by which producers of renewable energy are paid premium rates to supply the province's power grid. The Act also includes provisions to promote energy conservation and green construction in the public sector. Coal -- The province plans to phase out all of its coal-fired electricity generation by 2014 and replace it with wind, solar and other clean-energy sources. A total of 19 units at five coal plants will be shut; eight have been closed already. In the past decade, the province has gone from relying on coal for 27 per cent of its electricity needs to seven per cent. Cap and trade -- Ontario is part of the Western Climate Initiative and has the legislation in place to implement a cap-and-trade system but has not yet done so. In the last election, the Liberals said they were still committed to setting up the system but did not say when that might happen. Fuel -- Along with the federal regulations on renewable content, Ontario has committed to reducing carbon content in transportation fuels by 10 per cent by 2020. Emissions -- In 2009, Ontarioamended its Environmental Protection Act to allow greenhouse gas emissions to be regulated and laid the groundwork for a cap-and-trade system. As of 2010, any facility emitting more than 25,000 tonnes of CO2 equivalent has to report its emissions annually, but there are no limits on these emissions as yet. (GEOFF ROBINS/AFP/Getty Images)

• 5. B.C. - Per capita: 14.3 tonnes CO2 eq.

  Emissions target:33 per cent below 2007 levels by 2020 2009* emissions: - Total: 63.8 Mt CO2 eq. - Per capita: 14.3 tonnes CO2 eq. % change from 1990: +28.1 per cent (2 per cent below 2007 levels) % of Canada's total emissions: 9.2 per cent (**facility-reported emissions: 5 per cent) LEGISLATION: Carbon tax -- B.C. introduced a tax on fossil fuels in 2008. It started at $10/tonne and will rise by $5 a year until 2012. It is currently at $25/tonne and applies to gasoline, diesel, natural gas, heating fuel, propane and coal -- and to peat and tires when used to produce energy. Revenue raised from the tax is put toward lowering other taxes. The tax covers about 70 per cent of B.C.'s emissions. Electricity -- B.C.'s Clean Energy Act requires that 93 per cent of the province's electricity come from renewable sources and aims to make B.C. not only self-sufficient in terms of its electricity supply but also to be a net exporter of clean electricity. Some have criticized the legislation, because it reverses B.C.'s past policy of generating only enough electricity to meet the province's own needs and allows the government to exploit rivers and the environment by selling surplus power. It also mergers the generating and transmission sides of the electricity sector that past governments had taken pains to separate. This can undermine the oversight authority of the B.C. Utilities Commission, particularly its ability to reject certain hydro power projects, critics say. Coal -- B.C. has abandoned coal-fired electricity generation in favour of renewables but is still Canada's biggest exporter of coal. In 2010, it exported about 23 million tonnes. Fuel -- B.C.'s Renewable and Low Carbon Fuel Requirements Regulation has targets for reducing emissions from transportation fuels. Its overall target is to reduce the carbon intensity of fuels by 10 per cent by 2020. Carbon intensity measures the CO2 equivalent emissions of fuel per unit of energy. The regulations also stipulate that gasoline must have five per cent renewable content beginning in 2010 and diesel must have five per cent renewable content by 2012. The province is also testing a fleet of 20 fuel-cell buses that have zero tailpipe emissions. The $89.5 million federal-provincial project runs until March 2014. Public sector -- In June 2011, the province announced it had succeeding in making government operations carbon neutral, meaning that by reducing emissions and purchasing carbon offsets for reductions made in other sectors, the net contribution to the province's emissions from the public sector would be zero. Many have questioned the government's methodology in declaring itself carbon neutral, pointing out that it exempted some government-owned operations, such as BC Ferries, and didn't give credit to some institutions for reducing certain heavy-emitting activities, such as commuting. Cap and trade -- B.C. is a member of the Western Climate Initiative formed in 2007 between several U.S. states and four Canadian provinces. The members of the initiative have agreed to set a regional target for reducing greenhouse gas emissions of 15 per cent below 2005 levels by 2020, which is less ambitious than the federal target Canada and the U.S. agreed to under the Copenhagen Accord; and to establish a regional cap-and-trade program. Although B.C. has the legislation in place to implement a cap-and-trade system and had initially said it would launch the program in 2012, the Liberal government under new leader Christy Clark has not committed to carrying out the plan and is currently reviewing whether a cap-and-trade model is the best way to meet the provincial target. So far, only Quebec and California have moved forward with the cap-and-trade plan. Both are to begin a trial year of operation in 2012. Christy Clark, Premier of British Columbia, Canada, speaks during the World Economic Forum - India Economic Summit in Mumbai on November 14, 2011. (PUNIT PARANJPE/AFP/Getty Images)

• 4. Manitoba - Per capita: 16.6 tonnes CO2 eq.

  Emissions target: none 2009* emissions: - Total: 20.3 Mt CO2 eq. - Per capita: 16.6 tonnes CO2 eq. % change from 1990: +9.6 per cent % of Canada's total emissions: 3.1 per cent (**facility-reported emissions: 1 per cent) LEGISLATION: Emissions -- Under the NDP government of Gary Doer, Manitoba passed the Climate Change and Emissions Reductions Actin 2008, which committed the government to reducing emissions to six per cent below 1990 levels by 2012. It abandoned that target this December, after Canada withdrew from the Kyoto Protocol -- although, with 2012 fast approaching and Manitoba's emissions nowhere near six per cent below 1990 levels, the move was largely moot. Carbon tax -- The provinceintroduced a small carbon tax of $10 a tonne of CO2 equivalent on coal-fired electricity generation in July 2011, but it only affects three companies that are large emitters of greenhouse gases. Cap and trade -- Manitoba is a member of the Western Climate Initiative but has not yet laid the legislative groundwork for setting up a cap-and-trade system in the province. Manitoba Legislature in Winnipeg. (<a href="http://www.flickr.com/photos/jezz/">Flickr: Jezz's Photostream</a>

• 3. Nova Scotia - 22.3 tonnes CO2 eq.

  Emissions target: 10 per cent below 1990 levels by 2020 2009* emissions: - Total: 21 Mt CO2 eq. - per capita: 22.3 tonnes CO2 eq. % change from 1990: +10.5 per cent % of Canada's total emissions: 3 per cent (**facility-reported emissions: 4 per cent) LEGISLATION: Electricity -- Almost 90 per cent of Nova Scotia's electrical power comes from fossil fuels, mostly coal. In 2009, the province passed regulations limiting emissions in the electricity sector. It set caps on any facility emitting more than 10,000 tonnes of CO2 equivalent per year. Clean energy -- The province passed an Environmental Goals and Sustainable Prosperity Act that sets targets for reducing emissions and increasing energy efficiency and the use of renewable fuel sources. The province aims to get 25 per cent of its electricity from renewable sources by 2015. Two Canadian bagpipers play in front of the town clock in Halifax. (Tim BREAKMEIE/AFP/Getty Images)

• 2. Alberta - Per capita: 63.6 tonnes CO2 eq.

  Emissions target: 14 per cent below 2005 levels by 2050 2009* emissions: - Total: 234 Mt CO2 eq. - Per capita: 63.6 tonnes CO2 eq. % difference from 1990: +36.7 per cent % of Canada's total emissions: 33.8 per cent (**facility-reported emissions: 47 per cent) Alberta has also expressed its target as a 50 per cent reduction in emissions intensity below 1990 levels by 2020, which according to the Pembina Institute, translates to a reduction of 60 megatonnes in annual emissions below the business-as-usual level by 2020. Emissions intensity doesn't measure emissions in absolute terms but instead factors in GDP to measure GHG as a unit of production. This means that if production increases, emissions can increase and the province can still meet its target. Alberta's 2008 climate change strategy expresses its reduction targets as a cut in annual emissions of 50 Mt by 2020 and 200 Mt by 2050, a cut of 50 per cent below business as usual level. LEGISLATION: Emissions -- Alberta was the first province to implement regulations limiting greenhouse gas emissions when in 2003 it passed the Climate Change and Emissions Management Act. That act gave the province the right to regulate emissions, require mandatory reporting of emissions from certain facilities and set an overall provincial target of reducing emissions intensity to 50 per cent of 1990 levels by 2020. In 2007, the province added the Specified Gas Emitters Regulation. Under those laws, as of March 2008, existing facilities that emit more than 100,000 tonnes of greenhouse gas per year had to cap their emissions intensity at 12 per cent below the average for 2003-2005. Facilities built from 2000 on have a three-year reprieve before they have to start reducing emissions intensity by two per cent a year for five years. Emitters can choose to pay a penalty for exceeding their targets of $15 for every tonne over their limit. The money goes into the Climate Change and Emissions Management Fund, which as of September 2011 had collected $257 million -- from about $40 million in 2008. In 2009, the province set up a Climate Change and Emissions Management Corporation to invest the fund money into "emission reduction technologies." They can also purchase credits to offset their own emissions from emitters that have already reached their reduction targets or from companies that are not subject to the regulations (i.e. those who emit less than 100,000 tonnes a year) but have voluntarily reduced emissions. Environmentalists have criticized Alberta's emissions regulations for several reasons: - Measuring emissions intensity instead of absolute emissions allows the province to keep increasing emissions. The Alberta Environmental Law Centre has said that studies have shown that the province will be able to meet its emissions intensity target of 50 per cent below 1990 levels even if absolute emissions grow by 60 to 80 per cent above 1990 levels. According to the Pembina Institute, between 1990 and 2009, Alberta's greenhouse gas emissions increased more than those of any other jurisdiction in North America. - The regulations apply only to large emitters. - The $15/tonne penalty for exceeding reduction targets is not high enough to motivate changes in behaviour. Electricity -- Small-scale producers of renewable energy can feed the provincial grid and are compensated at the retail, rather than wholesale, price for electricity. As of 2005, almost all of the electricity in government buildings comes from renewable sources like wind and biomass, but overall, renewables still make up only five per cent of the province's total generating capacity. About 45 per cent comes from coal, and 40 per cent from natural gas. Coal --About 59 per cent of the province's electricity generation is fuelled by coal. Alberta angered many environmentalists in August 2011 when it approved a new $1.7-billion coal plant at a facility near Grande Cache owned by Maxim Power. The company plans to build a 500-megawatt generating station next to its existing 150-megawatt H.R. Milner plant, which is to shut down in 2012. The Pembina Institute estimates the new plant will emit more than three million tonnes of greenhouse gases each year -- the equivalent of adding 590,000 vehicles to the road. Source: Canada's 2011 national greenhouse gas inventory submission to the UN Framework Convention on Climate Change. Aerial view of the Suncor oil sands extraction facility near the town of Fort McMurray in Alberta on October 23, 2009. (MARK RALSTON/AFP/Getty Images)

• 1. Saskatchewan - Per capita: 71 tonnes CO2 eq.

  Emissions target: 20 per cent below 2006 levels by 2020 2009* emissions: - Total: 73.1 Mt CO2 eq. - Per capita: 71 tonnes CO2 eq. % change from 1990: +69 per cent % of Canada's total emissions: 7.3 per cent (**facility-reported emissions: 9 per cent) LEGISLATION: Emissions -- The province passed a Management and Reduction of Greenhouse Gases Act in 2010 that allows it to regulate emissions but has not yet implemented emissions limits on facilities or required them to report their greenhouse gas emissions. Regulations to that effect are expected to be introduced in 2012, with the first caps coming into force in 2013. The province plans to set a price on carbon and have facilities that exceed the caps pay into a green technology fund similar to the one that exists in Alberta. Saskatchewan's emissions have grown more than those of any other province since 1990, increasing by 69 per cent. This is largely due to the explosive growth in the province's oil and gas sector, which accounts for 37 per cent of its total emissions. Saskatchewan is Canada's second largest producer of oil after Alberta and accounts for about 20 per cent of the country's oil production. Potash mining and the expansion of coal-fired power generation have also contributed to the growth in emissions. Coal -- About 60 per cent of Saskatchewan's electricity comes from coal-fired generation. The province has no plans to phase out coal but instead aims to retrofit existing units to include carbon capture and storage technology to reduce emissions. (<a href="http://www.flickr.com/photos/justaprairieboy/">Flickr: Just a Prairie Boy's photostream</a>)

• Canada - Per capita: 20.5 tonnes CO2 eq.

  Emissions target: 17 per cent below 2005 levels by 2020 This is the target Canada agreed to under the 2009 Copenhagen Accord, which laid out the broad outlines of a possible agreement to replace the Kyoto Protocol once it expires in 2012. It is a smaller cut over a longer period than what Canada originally agreed to under Kyoto, which would have required Canada to reduce greenhouse gas emissions to six per cent below 1990 levels by 2012. The target mirrors the one proposed by the U.S. during the Copenhagen negotiations. After announcing on Dec. 12 that Canada will withdraw from Kyoto, Environment Minister Peter Kent said the government will stick to the Copenhagen target, even though it is not legally binding as the Kyoto target was. Canada's 2009*emissions: - Total: 690 Mt CO2 eq. - Per capita: 20.5 tonnes CO2 eq. % change from 1990: +16.9 per cent LEGISLATION: Coal -- federal emissions limits for coal-fired power plants are to come into force in July 2015. They will limit emissions to 375 tonnes of CO2 per gigawatt-hour of electricity produced per year. Emitters will be able to use carbon capture and storage to meet their emissions caps. The regulation will apply to any coal-fired unit commissioned after July 1, 2015, or at the end of its useful life -- which is the lesser of 45 years or the year 2020. Some critics say this limits the effectiveness of the law since about two-thirds of Canadian coal plants won't be subject to the regulations until 2020, and nine plants won't have to comply until 2030. Some also fear that the 2015 starting date for newly commissioned plants could prompt a rush to get new coal plants online before then to avoid being subject to the regulations. Indeed, one example of this already happened in Alberta, where Maxim Power received approval in August 2011 to build a new coal plant that won't have to comply with the emissions caps. Canada has 51 coal-burning electricity plants, which account for 13 per cent of the country's greenhouse gas emissions; 33 of the plants will be at the end of their life by 2025. Fuel -- In 2010, the government passed a regulation requiring an average of five per cent renewable content in gasoline and an annual average of two per cent in diesel fuel and heating oil. It adopted fuel emissionsstandards for passenger cars and light trucks for model years 2011-2016 that mirror those introduced in the U.S. Cars and light trucks account for 12 per cent of Canada's overall greenhouse gas emissions (and 43 per cent of transportation emissions). The transportation sector as a whole accounts for 27 per cent of overall emissions. Parliament Hill is blanketed in snow 18 December 2007 in Ottawa, Canada, (MICHEL COMTE/AFP/Getty Images)