What Does Canada’s Budget Say About The Environment?

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Originally published on the ECOreport

The environmental community has been watching Justin Trudeau’s Liberals closely, to see how they live up to their promise to give Canada a low carbon, climate resistant economy. The new government’s performance at COP 21 was nothing less than stellar. While the Federal government’s meeting with the provinces in Vancouver failed to achieve much beyond an agreement that carbon will be priced, the herd is now moving. News from the environmental assessment front is less encouraging: the National energy Board’s flawed Trans Mountain Pipline Expansion hearings are continuing and Catherine McKenna appears to have just rubber stamped the Woodfibre LNG project. So what does Canada’s budget say about the environment?

Something To Be Optimistic About?

Erin Flanagan, of the Pembina Institute, described the allocations to the National Energy Board and Canadian Environmental Assessment Agency (CEAA) “something to be optimistic about.”

“That’s really important because we need our regulators to have the financial means to be able to interact directly with Canadians who have an opinion on projects and make sure they are tracking these project proponents and living up to the environmental assessment standards and environmental laws of the country.”

“I think this government has heard the message that the existing regulatory structures are not serving the public interest and so they have injected some money into both of those structures so they can do their jobs,” she said.

So, Is C-38 Going To Be Permanent?

Elizabeth May pointed out that this is not enough. The CEAA’s $14.2 million allotment is to carry out the directives that former Prime Minister Harper brought in when he gutted Canada’s Environmental Assessment Act:

” … This budget actually entrenches the gutting of environmental assessment brought in by the 2012 omnibus budget bill C-38. Rather than repeal C-38, this budget commits to four years’ worth of funding for the Canadian Environmental Assessment Agency for “fulfilling its responsibilities” under the C-38 version of the Environmental Assessment Act. It also provides funding for what was announced last month by Ministers McKenna and Carr as “interim measures” to cope with the broken process under C-38’s environmental review. The funding of these “interim measures” is to last for years, which suggests they are permanent.

A Vast Improvement, But …

Ms May described the new government’s environmental approach as a vast improvement over Harper’s, but does not match up to the standards former Liberal Finance Minister Ralph Goodale set in 2005:

“The 2005 budget offered a fully formed climate action plan, including eco-energy rebates for homeowners, substantial funding for provinces to act to address the climate challenge, rebates for the purchase of energy efficient vehicles, and a carbon pricing scheme through a complicated carbon credit approach. The 2016 budget contains none of these measures.

“Disturbingly, the budget cites the target of the Paris Agreement as avoiding 2 degrees Celsius global average temperature increase, when it was Canadian leadership that helped drive the world to the more ambitious goal of striving to hold temperature to no more than 1.5 degrees C,” Ms. May said.

“The Liberal platform promised carbon pricing, which we did not expect to see today given the negotiations with the premiers. It also promised to reduce subsidies to fossil fuels by $125 million in 2017-18. No changes have yet been made to fossil fuel subsidies and subsidies to LNG are specifically continued until the end of 2024,” said Ms. May.”

“They Are Very Understaffed …”

Kai Chan, an associate professor at University of British Columbia and one of the 130 scientists who recently condemned the flawed review process for Pacifc Northwest’s proposed LNG terminal on Lelu Island, said Elizabeth May raised some important points.

“I don’t know if CEAA ever had the capacity to do their own analysis. I think they have relied on their own proponents the whole time, but their ability to critique and ensure the rigor of the analysis handed to them by the proponent has been curtailed. It has been getting worse and worse because of the cuts. They are very understaffed,” he said.

“My biggest concern, and I can’t find and details on this yet, is all the major science-based guidance within the Federal agencies (CEAA, the DFO, Canada Parks) have all been hit quite hard because of budget restrictions. They have been short staffed for years (and have suffered from) reduced research funding; slashed travel budgets; travel restrictions. I don’t know where to see if those have been restored. I think that’s really important.”

Chan described the funding for parks as “important initiatives, it’s not huge but more than we saw with the previous government.”

Providing Funding To Write Environmental Regulations

Clare Demerse, of Clean Energy Canada, [5. Roy L Hales Interview with Clare Demerse, of Clean Energy Canada] found it encouraging to see that the Government was providing funding to write environmental regulations and update building codes etc.

“We have a lot of catching up to do because this was not a priority under the previous Government. So it is a really important signal to say okay the budget is there, people can get down to work in Environment Canada and Natural Resources Canada, and other parts of the government, and really focus on climate action and clean energy as a priority,” she said.

The Clean Tech Sector

One of the brightest sections of this budget is the attention given to the clean tech sector, which is a key component of building a more environmentally friendly future.

“We were quite pleased with the way the budget treats clean energy more broadly. We thought that it makes some smart investments, and the government made it clear it sees it as an economic opportunity for Canada,” said Demerse.

“You can see that in a couple of ways, one being the Finance Ministers speech to the House. He talked about it as ‘the future the World is tending to and we want Canada to lead in that future.’ And then also the fact clean energy is really sprinkled throughout the budget. It wasn’t just a few pages in an environmental section.  You can read about it in all kinds of parts of the budget. whether you were talking about infrastructure, government procurement, or space for people in overseas missions for people trying to promote exports of clean technology.”

Kai Chan agreed, “Clean energy is a major component of the budget and certainly a major component of how they are representing it.”

Some of the specifics include:

• $3.4 billion over three years to upgrade and improve public transit systems across Canada
• $5.0 billion over five years for investments in water, wastewater, and green infrastructure projects across Canada
• $3.4 billion over five years for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserve. [6. Budget Plan 2016 tabled in the House of Commons by the Honourable William Francis Morneau, P.C., M.P. Minister of Finance on March 22, 2016, pps 88-89]
• $125 million over the next two years to the Federation of Canadian Municipalities to enhance the Green Municipal Fund [7. ibid, p 94]
• $82.5 million over two years, starting in 2016–17, to Natural Resources Canada to support research, development and demonstration of clean energy technologies. These resources will accelerate the innovation required to bring clean energy technologies closer to commercialization, reducing the environmental impacts of energy production and creating clean jobs.
• $50 million over four years, starting in 2017–18, to Sustainable Development Technology Canada (SDTC) for the SD Tech Fund. These resources will enable SDTC to announce new clean technology projects in 2016 that support the development and demonstration of new technologies that address climate change, air quality, clean water, and clean soil.
• $62.5 million over two years, starting in 2016–17, to Natural Resources Canada to support the deployment of infrastructure for alternative transportation fuels, including charging infrastructure for electric vehicles and natural gas and hydrogen refueling stations. [8. ibid, p 151] On another page [9. ibid, p 154] it states “the most generous treatment provided to chargers that provide enough power for long-distance travel.”
• $2.5 million over two years, starting in 2016–17, to Natural Resources Canada to facilitate regional dialogues and studies that identify the most promising electricity infrastructure projects with the potential to achieve significant greenhouse gas reductions.”There are also tax incentives, in the form of accelerated capital cost allowance (CCA) rates, for businesses that invest in “clean energy generation and energy efficiency equipment” [10. p 154] and LNG [7. p 221]

Chan pointed to the breakdown of investments in public transit on page 92 of the budget, and noted it was based on the province’s existing share of public ridership.

“Basically, where public transit is already helping many people, they will help it help more people,” he said.

“Overall, we were thinking of this as a downpayment,” said Demerse. “We know that if all goes well, next year the Prime Minster and Premiers will have an agreement on a National Climate Plan, and in Vancouver they agreed it will be ready to implement in 2017. So next year’s budget is probably going to be one where the federal government is probably going to have to play a very important role. So in next year’s budget we will be looking for things like a national carbon pricing, or support for low carbon infrastructure.”

Based on the comments above, I would give this budget an “A” for effort but a barely passing overall grade because of its failure to address the damages the previous administration made to Canada’s environmental protections (specifically, Bill C-38). That said, this budget shows a marked improvement over those we have seen in the past decade. If the “interim measures” are replaced by more socially and environmentally sensitive legislation,  there is good reason to be optimistic about the future.

Photo Credits: Parliament, Ottawa by mark.watmough via Flickr (CC BY SA, 2.0 License); Erin Flanagan – Courtesy Pembina Institute;   Elizabeth May, MP Saanich-Gulf Islands  – Courtesy B.C. Green Party; Kai Chan, Associate Professor in the Institute for Resources, Environment and Sustainability, UBC; graph from Budget; Clare Demerse of Clean Tech Canada; Two graphs from the Budget