The federal budget's $4.5 billion in environmental spending on green cars, clean water and renewable fuels didn't impress opposition parties and did little to ease the concerns of environmental groups.

"Today we act to improve our environment," Finance Minister Jim Flaherty said while introducing the budget.

While the budget represents a change in Conservative policy on "green" spending, opposition parties criticized it for containing no mention of the Kyoto Protocol, and said it didn't amount to a significant change in government policy.

Liberal Leader Stéphane Dion said the new programs amounted to less than the $5.6 billion cut from environmental programs that were put in place by the previous Liberal government.

"They cut so much last year, they are recreating some programs, but it's not a plan," Dion said.

Green party Leader Elizabeth May called the budget a disappointment.

"This government hasn't changed its tune on the climate-change issue," May told CBC News.

"It's a repeat of the same target and that would mean climate disaster.

"They are reannouncing some of the Liberal programs with less money and less cohesion."

The government introduced a rebate of up to $2,000 for buying fuel-efficient vehicles, and a levy of up to $4,000 on gas-guzzling vehicles like SUVs and Hummers.

The government also plans to spend $36 million for a program to get old and inefficient vehicles off the road that will include incentives for car owners.

The total also includes:

• $2 billion over seven years to aid in the production of renewable fuels, such as ethanol and biodiesel.
• $250 million to conserve ecologically important lands and implement the Species at Risk Act.
• $417 million for a clean water strategy: $324 million for six new coast guard vehicles and $93 million to improve the quality of water in lakes and rivers.

The spending on biofuel research was praised by Barb Isman, president of the Canola Council of Canada, who said the announcement would be "good for the environment, good for farmers and good for the Canadian economy." Canola is used in the production of biofuels.

Oilsands industry takes a hit

The budget also included news that the Accelerated Capital Cost Allowance tax break for oilsands projects will be phased out by 2015.

The Canadian Coalition of Energy Trusts, which represents more than 40 energy trusts across the country, said the move will come as a major blow to the oilsands industry.

"Oilsands producers will be disappointed," said coalition spokeswoman Sue Riddell Rose. "This [tax break] for these very capital-intensive projects is a very significant component of the economic driver for doing the projects in the first place.

"So the large multibillion-dollar projects that we're seeing will have to be re-evaluated, almost for sure."

The tax break, which has saved the oilsands industry about $1.4 billion annually, was introduced by the former Liberal government in 1997, when the industry was considered experimental and in need of support.

Since 1997, the industry has expanded significantly.

In the mid-1990s, industry experts predicted the oilsands would produce a million barrels a day by 2020. The industry reached that target 16 years ahead of schedule, in 2004.

Environmental critics, concerned about greenhouse gas emissions produced by the oilsands, have attacked the federal government in recent years for giving a tax break to an industry that seems to be thriving.

Total greenhouse gas emissions in Alberta increased by 39.4 per cent between 1990 and 2004, from 168.17 megatonnes to 234.51 megatonnes, according to Environment Canada.

Previous budget cut green programs

Also mentioned in the budget were $1.5 billion in previously announced spending on federal-provincial research programs to help the provinces cut polluting emissions.

The new spending is a change in policy from last year's budget, which included cuts to environmental programs and few new programs, other than a tax credit for users of public transit.

Environmental groups said the budget didn't contain the substantial changes needed to address climate change, particularly in light of recent studies that have tied man-made greenhouse gases to rising global temperatures and sea levels.

"The government is basically ignoring the climate crisis," said John Bennett of the Climate Action Network.

Greenpeace Canada spokesman Steven Guilbeault said the government "is clearly failing Canadians."

Aaron Freeman of Environmental Defence praised the idea of a national water strategy but said most of the $417 million earmarked for the program will go towards six new coast guard vessels.

The budget also contained no mention of the Kyoto Protocol, the international agreement that requires Canada to cut greenhouse gas emissions to six per cent below 1990 levels by 2012.

Canada's stand on its Kyoto obligations may be addressed later this month, when Environment Minister John Baird is expected to introduce a climate-change policy paper.

With files from the Canadian Press