Federal budget gets high marks for conservation initiatives but disappoints on green economy spending

Budget 2018, Equality + Growth: A Strong Middle Class   was tabled by the federal government on February 27.  The Globe and Mail published a concise overview in  “Federal budget highlights: Twelve things you need to know” .  A compilation of reaction and analysis from the Canadian Centre for Policy Analysis is here , including statements from CCPA partner organizations such as the United Steelworkers   and the Canadian Labour Congress.

budget_analysis 2018The section of the Budget which relates most to a low carbon economy is in Chapter 4: Advancement .  The Budget commits an unprecedented $1.3 billion over 5 years for conservation partnerships and the protection of lands, waters, and species at risk – prompting the Pew Trust in the U.S. to call the biodiversity targets “an example to the world” in  “With earth in peril, Canada steps up” .  Responses from the 19 environmental advocacy members of the Green Budget Coalition are compiled here , applauding the  “historic” and “landmark” investments in the Budget.  DeSmog Canada summarizes the provisions, which aim to protect 17 per cent of land and 10 per cent of oceans by 2020 under the United Nations Convention on Biological Diversity, and commit to recognizing  Indigenous leadership.

But on the climate change front?

The National Observer writes: “Budget delivers new conservation fund but avoids climate commitments” (Feb. 27) , highlighting the Budget allocations announced for the  the  $2.6 Billion Low Carbon Economy Fund  (announced in 2016) : $420 million will go to Ontario, for retrofitting houses and reducing emissions from farms;  $260 million will go to  Quebec for farming and forestry best practices, as well as energy retrofitting, and incentives for industry;  $162 million will go to British Columbia, partly for reforestation of public forests; $150 million will go to Alberta for energy efficiency programs for farmers and ranchers, for  renewable energy in Indigenous communities, and for restoring forests after wildfires;  $51 million is going to New Brunswick and $56 million to Nova Scotia for energy retrofitting. Allocations for Manitoba will be announced later, and for Saskatchewan if it signs on to the Pan-Canadian Framework.

The Pembina Institute reaction is also fairly positive in  “Budget 2018 builds on last year’s commitment to climate change” . “We are pleased to see that Budget 2018 allocates $109 million over five years to develop, implement, administer, and enforce the federal carbon pollution pricing system. …Another $20 million over five years is allocated to fulfill the PCF’s (Pan-Canadian Framework on Clean Growth and Climate Change) commitment to assess the effectiveness of its measures and identify best practices. ”

Less positive reaction:  “Council of Canadians disappointed by Trudeau government’s budget 2018” (Feb.27), which  points out that the government has allocated $600 million to host the G7 summit in June 2018 in Quebec,  yet the Budget fails to phase out subsidies for the fossil fuel industry, as it committed to at the G20 meetings and in the October 2015 election.  Elizabeth May of the Green Party also “laments squandered opportunities” and points out that “Budget 2018 does not touch subsidies to fossil fuels in the oil patch and for fracked natural gas”.

In advance of Budget 2018, the Canadian Labour Congress published “What Canada’s unions would like to see in the federal budget” – a broad perspective which included a call for “a  bold green economic program of targeted investments over the next five years for renewable energy development and infrastructure” … and “ the establishment of Just Transition training and adjustment funds for workers affected by climate change and the transition to a low-carbon economy, automation, the digitisation of work, and job losses caused by trade agreements like CETA.” The CLC response  to the actual Budget emphasizes the positive  developments on issues like pharmacare and pay equity, but is silent on the green economy issues. Canadian Union of Public Employees’ reaction is similar.


Clean Tech investment in Canada held back by a “fossil fuel comfort zone” and lack of financial disclosure

Canadian cleantech startups get ready for a breakout year”  appeared in the Globe and Mail on January 3, 2018 citing a 2017 report by Cleantech Group, which ranked Canada  “fourth in the world as a clean-technology innovator – and tops among Group of Twenty countries – up from seventh place in 2014.” Then on January 24, the San Francisco-based company Cleantech Group  released its ninth annual Global Cleantech 100 list for 2018 ; the List includes 13 Canadian companies, and the full Report is here (free; registration required).   Sure enough, Canada has improved its showing.  And on January 18, the Government of Canada announced that the federal government  will invest $700 million over the next five years  through the Business Development Bank of Canada (BDC) “ to grow Canada’s clean technology industry, protect the environment and create jobs “, as part of its larger Investment and Skills funding.  The same press release also announced the launch of the Clean Growth Hub, the government’s “focal point for clean technology”, which will focus on supporting companies and projects that produce clean technology, as well as coordinate existing programs and track results.

Yet in reaction to the government’s announcement,  the president of Analytica Advisors, which publishes an annual review of Canadian clean tech, had this to say in the National Post : “A $700-million investment to help clean technology firms expand and develop new products won’t turn Canada’s clean-tech industry into the “trillion dollar opportunity” the government keeps touting until we get out of our fossil-fuel comfort zone”.  She also co-authored an OpEd in the Globe and Mail, “Canada’s financial sector is missing in action on climate change” (Jan. 23)   where she berates the Canadian financial community for sitting on the sidelines amidst international initiatives for more climate-risk disclosure so that those risks can be priced into investment decisions.   For an update on the Canadian scene regarding this issue, see “Modernizing financial regulation to address climate-related risks” by Keith Stewart,  in Policy Options (Feb. 2).


Clean Technology Employment in Canada – new data from two Statistics Canada releases

Aerial view of the National Wind Technology Center; wind turbines

A December 15 article in Energy Mix reported   “More Canadians working in green jobs than in oil patch”; the National Observer wrote   “ There are nearly 300,000 high-paying clean tech jobs in Canada”.      Both articles  were based on data released by Statistics Canada on December 13 from its new  Environmental and Clean Technology Products Economic Account survey.  Statistics Canada estimates that  274,000 jobs were attributable to environmental and clean technology activity in 2016, accounting for 1.5% of jobs in the Canadian economy.   This represents a growth of 4.5% since 2007 – but at a time when employment in the economy as a whole grew 8.4%.  The good news of the data shows higher than average annual labour compensation per job (including benefits) for environmental and clean technology jobs –  $92,000, compared with an economy-wide average of $59,900.  This is largely because of the inclusion of electricity and waste management – without those two sectors, the average compensation per job was $82,000.

Environmental and Clean Technology Products Economic Account, 2007 to 2016   is a 3-page summary report; full, interactive data is provided in  CANSIM tables , including a separate table for employment .

Smaller employment numbers are reported by the  Survey of Environmental Goods and Services (SEGS), most recently published on December 12, 2017, and providing data from 2015.  Amongst the findings: “Ontario ($600 million) and Quebec ($247 million) businesses exported almost $850 million worth of environmental and clean technology goods and services in 2015. This accounted for 71.7% of all Canadian exports in this sector…..  In 2015, about 11,000 people held environmental and clean technology positions in Ontario, while almost 4,000 people were employed in this sector in Quebec. Waste management services provided jobs for another 15,000 people in Ontario and 7,000 people in Quebec.”  CANSIM Tables for the SEGS are here , including a table showing employment by region of Canada.

How to explain the differences? The Environmental and Clean Technology Products Economic Account includes clean energy, waste management, environmental and clean technology manufacturing industries, and technical services, which gives it  a broader scope than the Survey of Environmental Goods and Services (SEGS), as explained here .

First year progress report on the Pan-Canadian Framework lacks any mention of Just Transition

pan-canadian framework on clean growth coverOn December 9th, the Governments of Canada and British Columbia jointly announced the first annual progress report on the implementation of the Pan-Canadian Framework on Clean Growth and Climate Change – officially titled,  the First Annual Synthesis Report on the Status of Implementation – December 2017 (English version)  and Premier rapport annuel du cadre pancanadien sur la croissance propre et les changements climatiques (French version).     The report summarizes the year’s policy developments at the federal and provincial/territorial  level – under the headings pricing carbon pollution ; complementary actions to reduce emissions;  adaptation and climate change resilience ; clean technology, innovation and jobs; reporting and oversight; and looking ahead.  It is striking that the report is up to date enough to include mention of the Saskatchewan climate change strategy, released on December 4, as well as the Powering Past Coal global alliance launched by Canada and Great Britain in November at the Bonn climate talks – yet in the section on “Looking Ahead”, there is no mention of another important outcome of the Bonn talks: a Just Transition Task Force in Canada.  As reported by the Canadian Labour Congress in “Unions applaud Canada’s commitment to a just transition for coal workers”,  “Minister McKenna also announced her government’s intention to work directly with the Canadian Labour Congress to launch a task force that will develop a national framework on Just Transition for workers affected by the coal phase-out. The work of this task force is slated to begin early in the new year.”  No  mention of that, nor in fact, any use of the term “Just Transition” anywhere in the government’s progress report.

Environment Canada touts ‘good progress’ on climate after scathing audit” appeared in the National Oberserver (Dec. 11), summarizing some of the progress report highlights and pointing out that not everyone agrees with the government’s self-assessment that “While good progress has been made to date, much work remains”. Recent criticism has come from the Commissioner of the Environment and Sustainable Development in her October report ; from Marc Lee at the Canadian Centre for Policy Analysis in “Canada is still a rogue state on climate change”  (Dec.11) ; and from the Pembina Institute in  State of the Framework: Tracking implementation of the Pan-Canadian Framework on Clean Growth and Climate Change .  The Pembina Institute report calls on the federal government to speed up on all policy fronts, with specific recommendations including: “extend the pan-Canadian carbon price up to $130 per tonne of pollution by 2030, implement Canada-wide zero emission vehicle legislation, ban the sale of internal combustion engines, and establish long-term energy efficiency targets.”

How the government’s new procurement program could cut emissions and grow clean tech jobs

One of the commitments stated in the Pan-Canadian Framework on Clean Growth and Climate Change was to “modernize procurement practices, adopt clean energy and technologies, and prioritize opportunities to help Canadian businesses grow, demonstrate new technologies and create jobs.” In Budget 2017, the government announced measures to support technological innovation;  the section entitled ” A Nation of Innovators”  includes the allocation  of $50 million to launch Innovative Solutions Canada , a procurement program modelled on the U.S. Small Business Innovation Research program .  On April 7, Clean Energy Canada stepped up on this issue with a policy primer to suggest best practices from around the world:   The Power of Procurement: How the government can drive growth, cut carbon and create jobs

The Power of Procurement cites a 2016 OECD report which states that in Canada, the procurement of goods and services by the federal government alone accounts for approximately 13% of Canada’s GDP.  With Canada`s current Green Procurement Policy  established in 2006, and with our clean tech export market share declining, Canada has a lot of catching up to do.  The Clean Energy Canada report offers five Best Practices for consideration as the federal government  fleshes out its new Innovative Solutions Canada program .   Included in the Best Practices: a focus on low-carbon as a  clearly defined parameter in decisions; lifecycle costing which includes the purchase price, installation cost, operating costs, maintenance and upgrade costs, and residual value; target-setting for specific outcomes;  and support for commercialization and exporting capability for small and medium sized businesses (SMEs), which dominate Canada’s cleantech sector.