The federal government may be on the verge of allowing some kind of national trading in greenhouse gas emissions as part of its climate change strategy, observers say.

A little-noticed side document released along with the federal budget two weeks ago included mention of emissions trading. 

The document — Creating a Canadian Advantage in Global Capital Markets — contained a brief segment on developing new markets.

"Emissions trading will be an important component of a market-driven approach to reducing greenhouse gas emissions," it said. "The creation of an emissions-trading system in Canada could be beneficial for Canadian markets and provide business opportunities for our exchanges."

That has some observers predicting that some kind of emissions trading system is coming.

"It would be odd, to say the least, for the government to speak so favourably about emissions trading in the budget and then relegate it to a minor role or no role in the forthcoming regulatory framework," said Matthew Bramley, director of the climate change program at the Pembina Institute, an Ottawa-based environmental policy group.

"Emissions trading is a good fit with free market ideology, so it would be surprising if emissions trading was not a part of the government's … framework for industry," Bramley said.

"The door's definitely open for domestic emissions trading," agreed Sean Nixon, staff lawyer with the Sierra Legal Defence Fund.

The Montreal stock exchange has already partnered with the Chicago Climate Exchange to create the Montreal Climate Exchange (MCeX) that could host a market in emissions trading. It is awaiting the release of Ottawa's regulatory framework.

Tories oppose international emissions trading

Environment Minister John Baird told a House of Commons committee last month that Canadian companies will not be allowed to participate in international emissions trading under the Kyoto Protocol.

But as for a national trading system, a government spokesman said Tuesday, no commitment has been made. "It's always been on the radar," said Eric Richer, a spokesman for Baird. "I'm not going to scoop an announcement if one needs to be done on this."

Richer said Baird has made it clear that "no federal taxpayer dollars [should be] used outside the country" on emissions trading.  

"This government prefers to reduce greenhouse gas emissions inside Canada for the double benefit of emissions reduction and cleaning the air we breathe," Richer said.

Many environmental groups and opposition critics say international emissions trading could allow Canada to meet its emission-cutting commitments under the Kyoto Protocol.