Let me preface my reply with a disclaimer first of all. I don't believe taxing business is warranted except as a means of affecting behavior. It can present a cost that must be passed along to consumers, thereby changing their behavior, or it can make doing business more expensive for a sector that doesn't have the freedom to increase its cost. What it can't do is supply the currency issuing government with funding for future spending.

Your entire reply is focused on what the Canadian government could do with its revenue. It neither needs nor uses revenue to spend. Taxes remove currency from the private sector, period. Money is created when the currency-issuing government spends, and is deleted against the debt that it was created from when taxes are collected and come full circle back to their origin.

Deficit and debt are accounting terms that apply only to the government and track money that only exists in the private sector. If that government decides that pollution should be remedied at its expense it simply needs to create the money required to deploy the required resources and labor to do so.

If it also decides that the industry shouldn't continue to pollute it should pass (or enforce) legislation and regulations, not tax the offending industry as some means of "punishing" that industry. Pollution is either wrong or it is allowable and a sovereign government with a fiat currency sees no gain in taxing it.