Budget 2019 provides modest funding for climate change improvements – Just Transition, electric vehicles, energy efficiency

budget2019No clean economy vision is evident in the  pre-election budget , Investing in the Middle Class, delivered by Canada’s Finance Minister on March 19.  The National Observer has a Special Report on Budget 2019 , composed of  twelve focused articles covering the range of notable provisions. Mitchell Beer provides a good summary of the Budget’s climate-related provisions, in “Morneau’s Pre-Election Budget Boosts ZEVs and Energy Retrofits, Extends New Fossil Subsidy”  in the Energy Mix (March 20).  Elizabeth May, leader of the Green Party is quoted in that article, and says that the climate provisions are “pathetic” – a similar reaction to that of Environmental Defence,which states more diplomatically that “funding for climate change in this budget does not match the scale of the challenge”. Similarly, the Canadian Centre for Policy Alternatives reaction judges the climate provisions as “modest efforts to move forward on greening the economy”, although calls the just transition plan “an important precedent.”  The Canadian Labour Congress reaction is a lengthly commentary on many worker-related initiatives  – including the issue of Just Transition.

On the issue of Just Transition:  The Budget plan text on Just Transition reiterates the previous Budget’s pledge of $35 million over five years for Just Transition of coal workers.  In its reaction, the Canadian Labour Congress  acknowledges the new pledge of  $150 million in infrastructure funding to directly assist resource-based municipalities, but quotes Hassan Yussuff, Co-Chair of Canada’s Task Force on Just Transition: “… Canada’s unions are looking forward to working with the Minister of Natural Resources as the newly named lead minister, but are disappointed to see that the government has not addressed key Task Force recommendations to support workers, in terms of income, training and reemployment needs. Without this, workers will be left behind.”

More details appear in  “Coal workers get cash in budget but lack of details risks ‘major blowback”  in the National Observer (March 19), including that the  $150 million infrastructure funding will not flow until the 2020-2021 fiscal year.  Funds  will be delivered by Western Economic Diversification Canada at a rate of $21 million a year over 4 years,  and the Atlantic Canada Opportunities Agency , at a rate of $9 million a year for 4 year.

Watch for a promised analysis by Hadrian Mertins-Kirkwood of the CCPA, whose March 12  blog assessing the Just Transition  Task Force Report  promised  to keep “a close eye” on Budget 2019 provisions.

On the issue of fossil fuel subsidies:  The government  reaffirmed its long-standing (and unfulfilled) commitments to phase out fossil fuel subsidies , and pledged to establish an expert committee to examine the issue. Here is the reaction from the Stop Funding Fossils Initiative: “This year marks the tenth anniversary of Canada’s G20 commitment to phase out fossil fuel subsidies. Yet, despite moderate progress in the 2017 budget, Canada remains the largest provider of fiscal support to oil and gas production in the G7 relative to the size of its economy…. the Government of Canada has doubled down on fossil fuels by introducing billions of dollars in new subsidies in the past year. Budget 2019 allocates a further $100 million over four years to the Strategic Innovation Fund, aiming to help the oil and gas industry reduce emissions. ”

(Coincidentally, the 2019 Annual Fossil Fuel Report Card  was released on March 20, revealing  that global banks have invested nearly US$2 trillion in fossil projects since the Paris Agreement was signed, and Canada’s Bank of Montreal, RBC, ScotiaBank and CIBC  are amongst the worst offenders. )

On the issue of electric vehicles: Budget 2019 included a number of policies  aimed at speeding  up EV adoption, including a  2040 deadline to phase out new internal combustion vehicle sales, and consumer rebates for purchases of electric and hybrid vehicles ($5000 for purchases under $45K).  Despite recent reports that EV supply is restricting purchases, the government did not institute a mandatory sales mandate for car manufacturers. Businesses will be allowed to deduct the full value of a new ZEVehicle  worth up to $55,000 in the year they purchase it.  The government also pledged $130 million over the next five years  to build electric vehicle charging stations – specifically including workplaces in the named locations.  The National Observer summarizes these proposals in “Canada proposes rebates for electric cars, voluntary sales mandate”. 

On the issue of infrastructure and the built environment:  The text of the government’s announcement relating to energy efficiency is here , and a Backgrounder: Strong Communities, Affordable Electricity and a Clean Economy  is also relevant.     Initiatives include $1.01 billion in funding, immediately, to increase energy efficiency in residential, commercial and multi-unit buildings – in the form of financing and grants to retrofit community buildings, financing for municipal initiatives to support home retrofits, and financing to improve energy efficiency and support on-site energy generation in affordable housing developments .  Funds will be administered through the Green Municipal Fund of  the Federation of Canadian Municipalities.   Macleans magazine summarizes this, as well as infrastructure funding, in “Cities are billion-dollar winners in Budget 2019”   which states that “the biggest single new spending item in the budget is a $2.2 billion “one-time transfer” through the federal Gas Tax Fund. That money doubles the usual federal-municipal transfer through that mechanism. The windfall is intended to address “serious infrastructure deficits” in municipalities and First Nations communities.”

 

U.S. energy employment report shows job growth in oil and gas, energy efficiency; decline in solar jobs

US energy jobs report 2019The U.S. Energy and Employment Report 2019 edition  (USEER) was released by the National Association of State Energy Officials and the think tank Energy Futures Initiative on March 6 , providing  detailed statistics about the energy workforce and the industrial sectors in which they work.  The 2019 USEER reports on the “Traditional Energy Sector” (composed of fuels; electric power generation; and electric power transmission, distribution and storage) as well as the energy efficiency sector. Those four sectors combined to employ approximately 6.7 million Americans, or 4.6 percent of the  workforce, with an employment growth rate of almost 7 percent in 2018, outpacing the economy as a whole.  The report also includes statistics on the motor vehicle and parts industry, (excluding automobile dealerships and retailers) – which grew at a rate of 3%, employing over 2.53 million workers. Of these, almost 254,000 employees worked with alternative fuels vehicles, including natural gas, hybrids, plug-in hybrids, all-electric, and fuel cell/hydrogen vehicles, an increase of nearly 34,000 jobs.

Noteworthy trends:  the number of jobs in solar decreased by 4.2% in 2018 (the latest Solar Foundation Census reported a decrease of  3.2% for 2017- 2018);  Oil and natural gas employers added the most new jobs in the fuel sector, nearly 51,000, most of which were in  mining and extraction; the energy efficiency sector  produced the most new jobs of any energy sector—over 76,000—with 2,324,866 jobs in total, and an anticipated growth rate of approximately 8%.

This is the second edition of the USEER Report to be published by the National Association of State Energy Officials and Energy Futures Initiative, and as before, it uses same the survey instrument and underlying methodology as was used when the U.S. Department of Energy was responsible, so that data is compatible for year-over-year comparisons. The survey was administered to over 30,000 employers across 53 different energy technologies in late 2018.  Data shows:  Employment numbers and trends; Employer hiring expectations for the next 12 months; Hiring difficulty by technology and industrial classification; High demand jobs and skills gaps; Workforce demographics by race, ethnicity, gender, and veteran’s status; highly detailed geographic location by state, county, congressional and legislative districts. A separate report on energy wage data is scheduled for release later in 2019.  Reports are available in several formats:   a  Full Report, Executive Summary, and reports by State, as well as individual sections for Fuels; Electric Power Generation Transmission, Distribution, and Storage; Energy Efficiency; and Motor Vehicles & Component Parts.

Reports on the future of Ontario’s auto industry: one by experts, one by the Ontario government

future of auto industryIn The Future of Canada’s Auto Industry , released on February 26, co-authors Charlotte Yates and John Holmes assess  the sector’s current state – focusing on trade agreements and technological innovation –  and recommend a suite of policies to boost competitiveness and avoid plant closures, especially timely in the aftermath of the “shocking” closure announcement of GM Oshawa.  Although concentrated in Ontario, the industry is important nationally: “The automotive industry contributes significantly to Canada’s economic prosperity through investment, employment and technological innovation. Currently, it is Canada’s second largest manufacturing industry, adding $18.28 billion a year to GDP, $86.58 billion a year to Canadian exports (17% of total merchandise exports), and employing over 126,000 people directly and half a million people indirectly.”

The authors acknowledge the importance of the future trend to electric and autonomous vehicles, and propose a green industrial policy with targeted supports for companies that commit to building green vehicles sustainably. They point out current  shortages of skilled workers and the aging workforce in the industry, and call for   a workforce development plan that will invest in engineering, technical and data analytic skills, including trades and apprenticeships and income supports for skills retraining towards a just transition for workers.  They acknowledge the challenges of global competitiveness and the need for research and development, and call for financial incentives, including tax credits and grants, and better access to capital for small- and medium-sized Canadian technology companies, as well as more focused R & D investments. In general, they call for deep collaboration between the federal and Ontario government, rising above bureaucratic and jurisdictional interests.  Flagged as the most important condition for future success for the industry:  “government policy needs to prioritize the North American automotive platform centered on the Great Lakes. Canada–U.S. auto production and trade could be further integrated to create even greater competitive advantages of efficiency associated with a larger regional production footprint. Canada continues to need preferential tariff access to the American market for finished goods for this model to succeed.”

The Future of Canada’s Auto Industry was published by the Canadian Centre for Policy Alternatives.  A summary article which appeared in the Toronto Star on February 26,   “Electric, driverless vehicles key to survival of Canada’s auto industry ” gives short shrift to the trade relationships and the complex global dynamics of the auto industry, which figure more prominently in the actual report.  The authors, John Holmes and Charlotte Yates, are both members of Canada’s Automotive Policy Research Centre (APRC), with long and deep knowledge of Canada’s  auto industry.

autostrategy_2019Ontario government discussion paper recommends less red tape and “pro-jobs labour reforms”: 

In a second report, the same issues are discussed but with much different emphasis and level of analysis.  The Ontario government’s  discussion paper, Driving Prosperity: the Future of Ontario’s Automotive Sector  was released in February under the “Open for Business” mandate.  The government describes the paper as:  “… a 10-year vision for how industry, the research and education sector, and all three levels of government, can work together to strengthen the auto sector’s competitiveness and bring new jobs to the province.”  In the introduction, the government states “We are driving prosperity in the industry and creating a pro-jobs environment by cutting red tape, eliminating the cap-and-trade carbon tax, allowing businesses to write off job-creating capital investments faster, and
embracing pro-jobs labour reforms.”

Although the government report acknowledges technological disruption and trade issues as challenges, there is no direct mention of the GM Oshawa plant closing – and in fact, most of the statistics provided are from 2017.   The issue of retraining and skills upgrading is raised in the general context of changing technologies, stating: “ We also want to minimize the disruption caused to workers and their families by technology and production mandate changes. We need to find new ways to respond to complex challenges. We need to establish new relationships with government partners in labour and academia to help Ontarians find faster and smarter training solutions.”

 

B.C. Budget delivers $902 million to fund Clean B.C. initiatives

BC government news open micThe government of British Columbia tabled its Budget on February 19- officially detailed in  Making Life Better- A Plan for B.C. 2019/20 — 2021/22 .  As summarized by the National Observer article, “B.C. provincial budget funds nearly $1 billion for climate action” , it included $902 million  over the next three years to support the 2018 Clean B.C. Plan . Here are some of the big-ticket items:  $107 million for transportation initiatives – mostly providing incentives for zero-emission vehicle purchases (up to $6000 per vehicle) and funding for new charging stations;  $58 million for making homes and commercial buildings more energy efficient – as a result, homeowners can get up to $14,000 for energy efficiency improvements such as  switching to high-efficiency heating systems or upgrading their doors or  windows. $168 million is dedicated to funding  an incentive program to encourage large industrial polluters to reduce their emissions; $15 million is dedicated to help remote communities transition to clean energy solutions, and  $299 million is unallocated as yet. In addition to the Clean B.C. funds, the budget includes $111 million over three years to fight and prevent wildfires, another $13 million for forest restoration, and $3 million for the BC Indigenous Clean Energy Initiative, to help First Nations communities build clean energy projects.

Reaction has generally been positive – for example, from Clean Energy Canada . The Canadian Centre for Policy Alternatives B.C. Office, in “Nine things to know about the B.C. Budget” commends the  $223 million which is  budgeted to increase the climate action tax credit for low- and middle-income earners, but says, “action needs to be ramped up further—and fast”.  CCPA’s  Special  Pre-budget Feature  included an essay by Marc Lee “Expand climate initiatives to reflect the urgency of the crisis”  (Feb. 1). Lee had called for the  reinstatement of  annual increases to the carbon tax, beginning in 2019 with an increase of $10 per tonne – but no such policy was announced. (Lee had also called for more realistic budget allocations for wildfire response, which was addressed).

Finally, the Pembina Institute response is generally positive, though it calls for an independent panel to publicly monitor accountability and report on progress annually, echoing the Op-Ed “wish list” it had released before the budget was handed down.  . That had  stated: “B.C.’s Climate Change Accountability Act needs more teeth. What’s required is a transparent process whereby the government forecasts carbon pollution (including reduction goals for each sector), tracks and publicly reports on our progress, submits this data for independent verification, and adjusts policies as necessary.”   Other key items which Pembina had called for include  stronger regulations than those announced in January to limit methane pollution, and a strategy to use clean electricity to power the controversial LNG production which threatens to make the province’s GHG emissions targets unreachable.

Electric vehicle policy in Canada stalled by provincial opposition – 2018 market share at 2.2% of vehicle sales

electric carArticle updated on February 12:

Just as the cost of solar energy has steadily declined, so too has the total cost of ownership of electric vehicles, according to new research from Deloitte  consultancy in the U.K. .  Deloitte’s forecast is that total cost of ownership of electric vehicles will match that of  internal combustion cars  as early as 2021 in the U.K., and by 2022 globally.   By 2030, Deloitte’s also forecasts global EV adoption will rise from two million units in 2018, to four million in 2020, to 21 million in 2030, driven by consumer demand and government incentives.

In Canada:  Electric Mobility Canada, a non-profit advocacy network, released 2018  statistics for sales of electric and hybrid vehicles on February 8.  Their report shows that ev sales amounted to 2.2% of all new car sales in 2018 – disappointing, but a 125% increase over sales in 2017.  There are now approximately 93,000 ev’s in Canada, with almost all concentrated in British Columbia, Ontario, and Quebec.

A federal Strategy for Zero Emissions Vehicles, promised for 2018,  was expected to be announced on January 21 at the meeting of the Council of Ministers Responsible for Transportation and Highway Safety.  The extent of a policy announcement was a quote which appeared in the Toronto Star article: “ Ottawa wants to increase the number of zero-emission vehicles sold in Canada to 10 per cent of new cars sold in 2025, 30 per cent in 2030 and 100 per cent in 2040.”  Frustrated by the lack of progress, the David Suzuki Foundation  is  hosting  a petition titled “Has Canada stalled on electric vehicles?” calling for mandatory targets for electric vehicle sales, ramping up to 30 per cent by 2030 and a temporary purchase incentive program.

Both Ontario and Saskatchewan opposed a national plan at the January Ministers’ meeting, as reported in the Toronto Star in “Ottawa Queens Park spar over federal plan for more zero emission vehicles”  (Jan. 22). The National Observer examines their opposition in “Electric vehicle strategy sputters as provinces battle it out on green policies” (Jan. 18).  The Ford government in Ontario cancelled the EV purchase incentive program in June 2018, and more recently, EV charging stations at the commuter parking lots of the GO regional transit have been removed.

BC ev charging stationsMeanwhile, on February 11, the federal government announced a $1.15-million investment to build 23 electric vehicle fast chargers across British Columbia , in partnership with funding from the provincial government.  The funding comes from the federal  Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI), which has budgeted  $182.5-million for fast-charging and natural gas stations across the country.  That program has recently been criticized in a National Observer article, “Close to half of Canadian program touted for electric cars is funding natural gas stations”(Jan. 25) .

Relevant international research:  An October 2018 Briefing paper from the International Council on Clean Transportation: Electric vehicle capitals: Accelerating the global transition to electric drive–  which identifies the 25 cities worldwide with the highest electric vehicle uptake through 2017, and discusses the policies, actions, and infrastructure that have enabled their success. And in December 2018, the ICCT also published  Using vehicle taxation policy to lower transport emissions: An overview for passenger cars in Europe, which highlights the need for taxation incentives at the point of purchase and for gas/electricity consumption, as well as the importance of company fleets “as they make up the highest proportion of new-car registrations in markets such as France, Germany, and the United Kingdom.”