The federal government will fund a $1.5-billion Eco-Trust and Clean Air Fund to reduce pollution and greenhouse gases, Prime Minister Stephen Harper announced on Monday.

Money from the fund will be distributed to provinces and territories to finance major projects to cut CO2 emissions and pollutants by encouraging technology development and energy efficiency that "will provide real results on the reduction of air pollution," Harper said.

Canadian Prime Minister Stephen Harper
(Radio-Canada)

Quebec will get about one-quarter of the fund, or $350 million, to finance the province's recently minted green plan, which pledges to achieve reduction targets outlined in the Kyoto Protocol on greenhouse gas emissions.

Premier Jean Charest said Ottawa's announcement will enable Quebec to deliver on its promises regarding the environment. 

"You've chosen to take concrete steps, and we're entering an important stage in the battle against greenhouse gases," Charest told Harper during their news conference in Sherbrooke.

Quebec premier Jean Charest.
(Radio-Canada)

The announcement caps several months of heated negotiations between Quebec and Ottawa over financing provincial climate change programs. Quebec has long wanted Ottawa to pay for its Green Plan to cut GHG emissions, and last year sought $328 million to launch its plan.

The new envelope of money restores a degree of good faith between Quebec and Ottawa, Charest said. 

"You were loyal to your promise, Mr. Prime Minister. And I tell you because here, as Quebecers, as a federalist, it's a sign that augurs well for the future and evolution of the federal system," the Quebec premier said in the French portion of his speech.

The Eco-Trust fund is a step toward solving the so-called fiscal imbalance, Harper said, but Ottawa will retain a degree of veto power over the money.

"I think that the majority of provinces have plans, and now we need precise deals, but I'm confident we can find projects," he said. "We're flexible, but we're only seeking major projects that reduce greenhouse gases and pollutants." 

The announcement will likely give the Quebec Liberals a lift as the provincial government gets ready for an election campaign expected later this winter. 

Eco-Trust is electioneering: Boisclair

Parti Québécois Leader André Boisclair slammed Harper's environment announcement, calling it an "improvised" attempt to curry favour with Quebec voters. 

The money comes from a hypothetical budget the Conservative government hasn't tabled and the House of Commons may not adopt, Boisclair reminded Quebecers. 

He accused Charest of giving in to Ottawa by accepting the Eco-Trust fund, which Boisclair said falls short of Quebec's environmental demands.

The money comes with strings attached, and Charest is "in no way capable of confirming that it will be transferred without condition, as the Quebec government has always demanded," the PQ leader said.

He's also concerned about the lack of detail regarding the role of transportation in provincial climate change programs.

More than a third of Canada's greenhouse gas emissions are generated in the transport industry, but "no one can confirm that public transit programs will be admissible to the federal financing announced [Monday]," Boisclair said.

Environment groups welcomed the Eco-Trust fund announcement with reserved optimism. 

"We could say it's good news," said André Bélisle, president of the Quebec Association of the Fight against Atmospheric Pollution. "But we also think that Quebec will only be able to reach 65 per cent of the Kyoto targets here, and they will still be late by about eight years."

Quebec has pledged to fulfil the Kyoto Protocol targets for greenhouse gas reductions, despite Ottawa's rejection of the international agreement.

Under Kyoto, countries are expected to reduced greenhouse gas emissions to five per cent below 1990 levels by 2012. Each signatory country has its own reduction target — Canada's earlier target was six per cent, but its emissions have increased since its signed Kyoto.

Quebec Environment Minister Claude Béchard has said the province could achieve the targets by increasing public transit use and reducing gas consumption. The province unveiled its climate change plan in June 2006, vowing to reduce its emissions by 10 million tonnes of CO2 by 2012.