In an address to Parliament, Flaherty said Canada's Environment Minister Rona Ambrose was working on a "made-in-Canada climate change program" but gave no indication when it would be unleashed.

Ambrose, who is hostile to the Kyoto Protocol, hinted at US-style environmental policies last week after meeting with US officials Paula Dobriansky, Under Secretary of State for Democracy and Global Affairs, and James Connaughton, Chairman of the White House Council on Environmental Quality.

The funds earmarked for climate change programs in the Conservative budget are less than half the amount pledged by the previous Liberal government, which lost a general election to the Conservatives in January.

"It's a catastrophe in terms of the environment," said Steven Guilbeault, director of Greenpeace in Quebec.

Last year, Canada was flagged in a UN report as high on a list of countries most likely to run into difficulty implementing commitments under the Kyoto Protocol. The accord seeks to stem global warming by reducing emissions of greenhouse gases like carbon dioxide.

In 2003, Canada had increased its emissions by 24.2 percent from the base 1990 level, far from its 2012 target of a six percent reduction, according to the report published in November 2005.

Prime Minister Stephen Harper sparked concerns last month when he said it would be "impossible" for Canada to meet its Kyoto targets. Meanwhile his government cut some 15 existing climate change programs.

Both Harper and US President George W. Bush oppose the Kyoto Protocol, although Canada has ratified the international accord.

Environmentalists, scientists and opposition parties lamented that Harper did not plan to even try to meet Canada's Kyoto commitments.

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