New tax credit for carbon credits?

Liberal Senator Grant Mitchell wants to encourage Canadians to invest in carbon offset credits. On January 27, 2009, he introduced Senate Bill s-213, which would provide a 15% tax credit to individuals and businesses who purchase qualifying carbon offset credits.

In introducing the bill, Senator Mitchell drew parallels between the proposed tax credt and existing incentives for recreation and home renovation. He expects the change would not only help improve the environment, but also stimulate investment in Canadian businesses (including in farming in his native Alberta).

Offsets are currently regulated in Alberta as part of that province's emissions management legislation. Their use is also contemplated in the federal Turning the Corner program. Presumably offsets under either of these systems would qualify. Whether or not other types of offsets would qualify is not yet clear.