Canada’s $7-Billion Clean Economy Investment is ‘Just a Start’: Morneau

Canadian Finance Minister Bill Morneau declared his government’s intention to become a “champion of clean growth and a speedy transition to a low-carbon economy,” tabling a federal budget Tuesday that earmarks more than $7 billion over two years for transit, water and wastewater infrastructure, energy and water efficiency upgrades, and a $2-billion low-carbon economy fund.

“The government suggested the investments on clean economy ‘are just a start,’” the Globe reports, “and more action will be taken.”

The budget has nothing to say about the Trudeau government’s commitment to begin phasing out fossil fuel subsidies valued at $5.2 to $46.4 billion per year by analysts at Oil Change International and the International Monetary Fund. Instead, it puts a 10-year extension on a tax write-off that makes it easier for liquefied natural gas (LNG) developers to recover their capital costs.

And like any budget document, the 271-page release leaves observers waiting for details on the quantified energy and carbon reductions the government hopes to achieve, the amount of low-carbon activity (number of transit spaces to be introduced, or social housing units to receive energy retrofits) it hopes to support, or the energy efficiency standard to which its infrastructure activities will adhere (the budget contains one reference each to the Green Building Council’s Leadership in Energy and Environmental Design standard, and a net-zero municipal library in Varennes, Quebec).

Even so, the budget represents a sharp departure from years past, when governments gave short shrift to climate and energy action if they were mentioned it at all. “This is laying the groundwork for a green energy economy, and it is doing so with some smart investments,” said Clean Energy Canada Senior Policy Advisor Clare Demerse.

“2016 federal budget features smart spending on clean energy,” the organization’s website declared last night. “Morneau budget is downpayment on dream green home.”

“Significant investments in public transit, infrastructure projects such as electric vehicle charging stations, clean energy research and development, as well as the creation of a Low-Carbon Economy Fund could allow Canada to cut carbon emissions and fulfill its climate obligations under the UN Paris Agreement,” added Environmental Defence. “However, gaps remain, such as a concrete timeline for the complete phase-out of fossil fuel subsidies.”

The Low-Carbon Economy Fund “will reward provinces and territories that ‘materially reduce greenhouse gas emissions’ and achieve significant reductions under Canada’s current emissions target,” iPolitics reports. “The money will be allotted over two years to projects that reduce greenhouse gas emissions the most at the lowest cost per tonne, according to the budget.”

Specific budget highlights, most of them spread over multiple years, include:

$2.5 billion for public transit
$1.8 billion for green (mainly water) infrastructure
$1.7 billion for climate and environmental protection
$574 million for energy and water retrofits in social housing
$225 million (including $50 million from past budgets) for regional and municipal clean technology and climate projects, with the $125 million for cities directed through the Federation of Canadian Municipalities
$130 million for cleantech research
$129 million for energy efficiency codes and standards, as well as a legislative framework for offshore renewable energy projects, plus $40 million to integrate climate resilience in building codes and design guides
$109 million over five years to restore Environment and Climate Change Canada’s capacity for science, data reporting, policy, and regulations
$62.5 million to develop charging or refueling infrastructure for electric, natural gas, and hydrogen vehicles
$61.3 million for international environmental engagement
$57 million over two years to develop clean transportation regulations and standards, and support development of emission standards for international aviation and shipping
$50 million for technologies to reduce greenhouse gas emissions in oil and gas operations
$10.7 million for off-diesel projects in off-grid Indigenous and northern communities.

The budget also reaffirms Canada’s Paris commitment to a $2.65 billion international Green Climate Fund contribution by 2020. It contains references to green job creation for youth, an accelerated capital cost deduction for electric vehicles and energy storage systems, regional dialogues on clean electricity generation, tax treatment of emission trading regimes, strengthened environmental assessment processes, and a green bond issued through the Export Development Corporation.

(with files from The Energy Mix’s Mitchell Beer and Chris Wood)