‘Implementation Budget’ Delivers the Dollars for Pan-Canadian Climate Plan
More than $20 billion in green infrastructure investment, a $50-billion infrastructure bank, a $2-billion Disaster Mitigation and Adaptation Fund, and allocations for renewable energy deployment, smart grid and storage development, electric vehicle infrastructure, building retrofits, an accelerated coal phase-out, and off-diesel programs for remote and Indigenous communities are among the highlights of the federal budget unveiled Wednesday by Canadian Finance Minister Bill Morneau.
The budget received lukewarm reviews from analysts who interpreted it as a stand-pat effort by a government reaching the middle of its mandate. But climate and energy organizations said Morneau had checked all the necessary boxes to begin implementing the pan-Canadian climate framework hammered out last December by Prime Minister Justin Trudeau and all but two provincial and territorial premiers.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
“Today’s budget provides the financial backing we need to begin the serious work of implementing Canada’s climate framework and generating good, long-term jobs for Canadians,” said Catherine Abreu, executive director of Climate Action Network Canada.
“This is the implementation budget,” agreed Steven Guilbeault, principal director at Montreal-based Équiterre. “The federal government is now putting in place the necessary resources for federal departments and through the public transit fund, the green infrastructure fund, the new Canada Infrastructure Bank, and an additional $1.4 billion to support clean technology development and commercialization in Canada, to move forward on the climate plan.”
Erin Flanagan, the Pembina Institute’s federal policy director, said the budget “enables Canada’s long-term climate success by making sure our future economic competitiveness is intimately tied to clean growth. Strategic investments in green infrastructure and clean technologies—like smart grids, energy storage, and renewable energy—will help the country’s environment and economy as we compete for the rapidly-growing global demand for clean energy.”
Early critical coverage focused primarily on decisions to eliminate a transit tax credit—which Ottawa said it was replacing with actual investment in transit infrastructure—and extend the $2-billion Low-Carbon Economy Fund over five years instead of two. While NDP Leader Tom Mulcair accused the government of cutting back its climate funding, federal officials and some climate hawks said provinces and territories needed the additional time to ensure that funds were devoted to the best projects.
“This plan needs momentum,” Clare Demerse, federal policy director at Clean Energy Canada, told National Observer. “The climate plan needs to be a priority that we’re working on in the near term in Canada, so money in the near term can signal that. But there are also times where you do need time to develop those projects and programs and bring them forward.”
In her own op ed for the Observer, Demerse says the budget passed one important test with flying colours. Energy and climate observers had fretted that Morneau would be hesitant to cross a new U.S. administration that denies the reality of climate change and purports to “dig coal”. But Demerse concludes they needn’t have worried.
“The budget’s clean technology section opens by saying that the ‘global campaign against climate change is an economic opportunity for Canada,’ an opportunity where Canada ‘can be a true global leader,’” she writes.
“The government zeroes in on cleantech, along with digital industries and agri-food, as growing industries that are key to Canada’s economic success,” she adds. And “it goes on to offer the kind of support that will help increase Canada’s cleantech market share, starting with $1.4 billion in financing—the kind of affordable capital that cleantech firms need to grow. It also provides several hundreds of millions in support to cleantech in sectors like transportation and clean energy, and offers a new tax break to geothermal energy, a renewable energy source with big potential in Canada.”
The Observer notes that the $50 billion for the infrastructure bank will be spread over 10 years, the $20.1 billion for public transit over 11, attaching a decade-long wait to Morneau’s pledge that “Canadian cities will be home to world class public transit systems—so that people can get to work on time, and back home quickly at the end of a long day.” Getting money out the door through the infrastructure bank “will also depend on what deals the federal government can strike with provinces, territories, community organizations, and the private sector,” writes reporter Carl Meyer.
The Globe and Mail reports that federal contributions to local transit improvements will be limited to 40% of project budgets, down from the 50% Ottawa made available for an initial round of projects last year. But mayors like Don Iveson of Edmonton, Naheed Nenshi of Calgary, Gregor Robertson of Vancouver, and John Tory of Toronto were all pleased with the federal allocations for transit and housing.
“While 50% would have been lovely for phase 2, what really needs to happen now is the provincial governments need to step with a fair share—and ideally a matching share –so that property taxpayers in these local jurisdictions are not unduly burdened,” said Iveson, chair of the Federation of Canadian Municipalities’ Big City Mayors Caucus.
If each senior level of government comes up with 40% for major municipal infrastructure projects, leaving cities to fund the remaining 20%, “we can make that work,” Iveson said.
Alberta Premier Rachel Notley, meanwhile, welcomed Ottawa’s decision to contribute $30 million to clean up the thousands of orphan oil wells abandoned by fossil producers at the end of their operating life.
“This is money we have been strongly advocating for over the past few weeks and months,” Notley said. “We will leverage this money to aim more resources at putting Albertans back to work and reclaiming orphan wells.”
The federal allocation was the same amount the industry-funded Orphan Well Association spent in 2015-16 to plug a record 185 wells, leaving at least 1,400 to be cleaned up as of last fall.