VICTORIA, British Columbia -- British Columbia is poised to become the first jurisdiction in North America to impose a direct "emissions" tax on users of all fossil fuels -- diesel, gasoline, natural gas, coal, propane and home-heating oil.

The tax, which has been introduced by provincial Finance Minister Carole Taylor in the 2008 budget proposal, will begin at 2.76 Canadian cents per liter (roughly equivalent to 10.5 cents per gallon) for diesel and home heating

oil.

It will be slightly cheaper (2.41 centers per liter) for gasoline.

Under Taylors proposal, the tax will rise gradually over the next five years to approximately 32 Canadian cents per gallon for diesel in 2012.

If adopted, the emissions tax will begin July 1. With British Columbias current diesel fuel tax at 12 Canadian cents per liter, this represents an initial tax increase of 23 percent for diesel.

B.C. taxpayers can avoid the tax in a number of ways:

Reducing usage

Increasing efficiency

Changing fuels

Adopting new technology

Applying a combination of approaches

The proposal is described as a "revenue-neutral" method of encouraging consumers to make environmentally responsible choices about their use of fossil fuels.

Proponents of the plan claim the tax will be applied to fossil fuels but will come directly back to the taxpayer in the form of lower income, corporate and small business taxes. This aspect of the proposal means that no part of the money generated is intended to be used by the government as general revenue, nor is it to be applied as incentives to businesses that develop green technology, the traditional method governments use to encourage pollution reduction.

This bit of economic recycling also comes with a built-in protection for lower-income British Columbians who, in most circumstances, would be forced to pay for the emissions tax but would not benefit much from lower taxes by providing an annual credit of $100 per adult and $30 per child.

All British Columbians will be granted a one-time, $100-per-person payment as an incentive to get them motivated to think about how they can reduce their fuel consumption.

Opponents of the bill claim that this form of taxation falls heavily on those businesses that dont have any option but to consume fuel. "We cant put our freight on buses," protested Paul Landry, president of the British Columbia Trucking Association. "We cant transport pianos on public transit."

Critics also claim that provisions in the proposal let big industry and banks off the hook while finding a way to tax ordinary individuals and businesses immediately. There is also concern that the measure will cause fuel-dependent businesses to divert some of their operations to the United States.

Currently there is little national leadership in Canada on the issue of emissions. Each province adopts its own measures. British Columbia has pledged to reduce greenhouse emissions by one-third over the next 12 years.

No other Canadian provinces have yet joined British Columbia in the carbon-tax experiment.