For instance, smog pollution is now borne by society as a whole but not those who caused it leading to reduction of pollution through taxation in Ontario (Lemmen andWarren, 2004).The revenues collected are used to encourage cleaner technologies reducing payroll taxes thus increasing competitiveness and innovation while reducing pollution. Right now, the oil industry expansion is subsidized by federal government though oil prices are increasing as the country is committed to reducing emissions through Kyoto Protocol (Statistics Canada, 2004).
In favor of fossil fuels for electricity generations, low-impact renewable energy has been ignored currently by provincial governments. Currently, municipal governments encourage suburban sprawl in order to obtain higher revenue from property taxes though it is expensive to society through pollution, congestion and loss of local land. In several ways, Canada’s current subsidy, tax schemes and current regulations are not meant to encourage environmental innovations hence holding the country back from being environmental leader. Through elimination of subsidies to create activities leading to destruction of our environment and our health and increasing taxes to discourage pollution and encourage investment and clean technologies can create a climate that will allow innovation to grow rather than withering (Marsalek, et al 2001).