Budget bolsters federal climate plan with $17.6B in new spending

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This article was published 18/04/2021 (1349 days ago), so information in it may no longer be current.

OTTAWA—The federal government is bolstering its climate plan with $17.6 billion in new spending to make deeper cuts to greenhouse gas pollution within this crucial decade for the planet.

Placing the threat of climate change on par with the COVID-19 crisis, Monday’s pandemic budget promises to hasten the shift to a low-carbon economy to spur the private sector along the Liberal government’s path to net-zero emissions by 2050.

It also claims to put Canada on pace to reduce emissions to 36 per cent below 2005 levels by 2030 by including unspecified “additional action” and future co-operation with the United States.

“When people look back on 2021, they’re going to say this is the year when the world pivoted to a green economy, and Canada has to be there. We have to be in the lead of that transformation,” Finance Minister Chrystia Freeland told reporters before tabling the budget.

Canada’s current emissions target for 2030 — 30 per cent below 2005 levels — is not in line with what the United Nations Intergovernmental Panel on Climate Change has deemed necessary to avoid the worst extremes of climate change this century. In 2018, that panel called for “unprecedented” changes in all aspects of human society to cut global emissions almost in half by 2030.

Monday’s budget sets the stage for Canada to increase its ambition with a new target ahead of a U.S. summit on climate change set for Thursday. The Star reported last week that the government intends to declare it can cut emissions by more than 40 per cent below 2005 levels by 2030, bringing Canada much closer to what leading scientists deem necessary.

To get there, the budget includes $5 billion earmarked over the next seven years to “support industrial transformation” by helping heavy polluters like oil and gas, cement and steel producers reduce their emissions.

The government also plans to spend $1 billion over the next five years to attract private cash to Canadian clean technology businesses, and to cut the corporate tax rate in half for at least seven years for firms that manufacture such things as wind turbines, electric vehicles and geothermal energy systems.

Starting next year, Ottawa will give businesses a tax credit for carbon capture, utilization and storage (CCUS) projects — projects that negate emissions by drawing carbon from the atmosphere — with the aim of increasing Canada’s annual carbon capture from four megatonnes to 15 megatonnes. The government will also spend $319 million over the next seven years on research in this area.

And Ottawa is planning to issue its first “green bond” to raise $5 billion in the current fiscal year to fund infrastructure, clean tech and conservation projects.

The budget also aims at reducing emissions from residential buildings with a $4.4-billion program to provide homeowners and landlords with interest-free loans of $40,000 for “deep home retrofits.” The money can be used for improvements like better insulation, energy-efficient furnaces and water tanks, solar panels and new windows, the budget says.

Alongside the funding to slash emissions, the budget includes billions to buttress Canada against the extreme weather consequences of climate change. This includes $1.4 billion over five years for wildfire mitigation projects, improved storm water systems, and the restoration of wetlands and shorelines. The government is earmarking another $1.9 billion over five years to help provinces and territories respond and recover from natural disasters.

There is also significant money — almost $3.4 billion over the next five years — to protect more of Canada’s land and oceans in order to achieve the government’s goal of placing 25 per cent of it under official conservation by 2025. The budget also earmarks $647 million to protect and restore devastated Pacific salmon stocks.

This coming influx of $17.6 billion in green spending comes just four months after the Liberal government beefed up Canada’s climate plan with a $15-billion blueprint to slash emissions. The new plan will increase the national minimum carbon price to $170 per tonne of emissions by 2030, and already included billions for renewable energy projects, emissions reductions for heavy industry, energy-efficient building renovations, and rebates for people who buy zero-emission vehicles.

The government also announced in February that it would spend another $15 billion to improve and build new public transit across the country over the next eight years.

Meanwhile, Ottawa is looking to partner with Washington on climate measures after Prime Minister Justin Trudeau struck a deal with U.S. President Joe Biden during a virtual summit in February.

According to Monday’s budget, the federal government is partially relying on this partnership to project it can now reduce emissions to 36 per cent below 2005 levels by 2030. The document points to regulations for methane pollution and transportation as areas where the two countries could align policies for deeper cuts to emissions.

Such policies could tackle pollution from oil and gas extraction and road transportation, where annual emissions increased from 2005 to 2019, according to the government’s latest tally of national greenhouse gas pollution.

The tally shows Canada has reduced emissions by just over one per cent since 2005.

Many advocates for strengthened climate action applauded the new green spending, but some also raised concerns about the measures announced in the budget.

Julia Levin, climate and energy program manager with Environmental Defence, told the Star she sees problems “hiding in the details” and worries the billions earmarked to help heavy industries reduce emissions will slow the transition away from oil and gas production. Levin also echoed concerns from some climate activists who oppose carbon capture spending for the same reason.

For Michael Bernstein, executive director of Clean Prosperity, the green budget measures are clearly not enough to get Canada all the way to net-zero. He welcomed money for home retrofits but said there are “millions and millions” of buildings in Canada that need energy-efficient renovations, and argued much more money is needed to make carbon capture a viable weapon in the country’s effort to slash emissions.

“We have a very long road to travel, and at least we’re moving down the path,” he said.

Alex Ballingall is an Ottawa-based reporter covering federal politics for the Star. Follow him on Twitter: @aballinga