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

budget2019Updated March 25, 2019 with reactions.

No 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.

UPDATED: Hadrian Mertins-Kirkwood weighed  in with his overall analysis, in “Budget fiddles while climate crisis burns” (March 20), judging the initiatives as modest and inadequate to the urgent task – with the greatest disappointment being the ongoing support to the oil and gas industry.  Similarly, Climate Action Network Canada  states that “business as usual policy is no longer acceptable to respond to the climate crisis and the level of climate action that citizens, students, workers and communities are urgently demanding.”

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.

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”. 

UPDATED:  Unionists and local politicians staged a protest rally at the Windsor plant which manufactures the Chrysler Pacifica Hybrid on March 22. CTV Windsor  reported  that leaders of Unifor Local 444 and local  NDP politicans are  infuriated that the consumer incentives carry a price limit set at $45K  – excluding the Canadian-built Pacifica Hybrid, priced at $54,000.  The  CBC also reported  “Federal rebate on electric cars will push consumers to buy American, NDP says” .  And an Opinion piece by Will Dubitsky,  “Stalled: why North American lags as China and Europe lead the way on electric vehicles”  in the  National Observer (March 20)  calls the EV purchase incentives “a halfway measure offering less than the consumer rebate programs elsewhere,” and judging the $130 million over five years  for charging and refuelling stations “mediocre” compared to equivalent commitments in California and the EU.

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.”

 

Reducing emissions from Canada’s built environment – what is the government thinking?

green bibliotechqueIn 2015, Canada’s building sector  accounted for approximately 12% of the country’s total greenhouse gas emissions, according to Reducing Greenhouse Gas Emissions from Canada’s Built Environment , a November 16 report from the Senate Committee on Energy, the Environment and Natural Resources.   The report discusses “a wide range of policy tools and technology solutions that could lower building sector GHG emissions, including: national building codes; energy efficiency standards and labels; technology research, development, and demonstration; fuel-switching for space heating; federal investments in buildings; and, the role of cities and urban design.”  In its concluding statements, the Committee notes that the existing federal Build Smart Strategy faces pressures of climate-change related urgency, as well as the need to harmonize and work with the various provincial jurisdictions. In the discussion of energy efficiency, the report cites the testimony of David Lapp of Engineers Canada,  in which he states that each $1 million invested in energy efficiency improvements is estimated to generate up to $3 to $4 million in gross domestic product and up to 13 jobs.   The report provides links to the testimony of all witnesses who appeared before it – no unions or worker representatives appeared.

Reducing Greenhouse Gas Emissions from Canada’s Built Environment  is the last of five interim reports by the Senate Committee regarding Canada’s transition to a low-carbon economy. A final report is scheduled to be released later in 2018, compiling all five studies and issuing recommendations for the government.

The government has already received recommendations on the topic, from the June 2018 report of the House of Commons Standing Committee on Environment and Sustainable Development:  Better Buildings for a Low-Carbon Future , and in French, De Meilleurs Bâtiments Pour un Avenir À Faibles Émissions de Carbone .   In October, the  Government released its  Response report  (French version here),  which included reaction to the Committee’s Recommendation # 4,  that “Employment and Social Development Canada ensure that programs exist or are established to address the labour transition required so that skilled personnel are available to implement net-zero energy ready codes.”  The Government response offers only a reaffirmation of its commitment to existing  skills training, upgrading and apprenticeship programs. What little new thinking there is comes in the statement regarding green jobs: “The Government is also supporting the development of specific skills required for employment in green jobs. For example, the Green Jobs Science and Technology Internship program is investing more than $16 million to create 1,200 jobs as part of Canada’s Youth Employment Strategy. This program provides opportunities for post-secondary graduates to gain relevant work experience through green jobs in science, technology, engineering and math fields in the natural resources sector. NRCan is also exploring opportunities to collaborate with non-government organizations, trade associations and provincial and territorial governments to develop training resources to support implementation of net-zero energy ready codes by 2030.”

 

How best to boost Electric vehicle sales in Canada?

In his remarks  at the launch  of  the Transportation 2030 policy in November, Minister Garneau stated  “The future of transportation will be in electric cars and vehicles using zero-emission fuels like hydrogen.”   Yet in Canada, electric vehicles are still rare, representing  only 1% of all new vehicle sales and just over 18000 cars in  total in 2015, according to the Global EV Outlook Report 2016 .  A CBC article in August 2016  reported on an internal federal government  report that recommended tax incentives and cash rebates as the best policy means to encourage Canadians to buy cars.   In November,  the  Sustainable Transportation Action Research Team  at Simon Fraser University  published   Canada’s Electric Vehicle Policy Report Card , evaluating  whether existing  provincial  policies are likely to be sufficient to  boost electric vehicle sales to the  levels needed to achieve Canada’s emissions targets.  The report provides  policy “ report cards”  for each province and concludes that  the most effective policies include a Zero Emission Vehicle mandate (as  in California and Quebec), strong and long-duration financial incentives (as in Norway and Ontario), and strong taxation on gasoline or carbon pricing.   The report also notes that municipal governments can also play a role through building regulations and public charging infrastructure deployment.