The federal budget released this week marked the first opportunity for the new Liberal government to make its mark on public policy where it counts most: in the pocketbook. Let's take a look at what this could mean for resource economy issues.
Energy policy watcher Brian Woods shared this analysis of the budget with Resource Works.
Highlights of Canada's 2016 federal budget
Chapter 4 - A Clean Growth Economy
Introduction
- Protecting the environment and growing the economy go hand in hand.
- Countries around the world are looking for new ways to expand and green their economies and create opportunities for their citizens.
- The global clean technology market is growing rapidly, presenting Canadian businesses with an immense opportunity to showcase their ingenuity and support sustainable prosperity for all Canadians.
- At the recent United Nations Climate Conference (COP21) in Paris, alongside 194 other participating countries, Canada agreed to take steps to support the transition to a global low-carbon economy by limiting the global temperature increase to less than 2 degrees Celsius above pre-industrial levels.
- The Government also announced its participation in Mission Innovation, a public-private initiative to dramatically increase global investments in clean energy.
- Acting on these commitments, in partnership with provinces and territories, the Government is now developing a pan-Canadian Framework on Clean Growth and Climate Change.
- Pricing carbon emissions will drive Canada's transition to a stronger, more resilient, low-carbon economy and help Canada address the global climate change challenge.
- Supporting a clean economy will help position Canada to take advantage of opportunities in the new global economy by diversifying the economy and opening up access to new markets, while reducing emissions and generating well-paying jobs for Canadians.
- The investments made in Budget 2016 are just the start and additional actions will be coming.
Investing In Clean Technology
- Clean technologies are a key component of the Government's approach to promoting sustainable economic growth and will play a critical role in Canada's transformation into a low-carbon economy.
- The global clean technology market presents a promising opportunity for Canadian businesses, a source of new clean jobs for the middle class and a driver of prosperity for all Canadians.
- As a first step, Budget 2016 proposes to provide early strategic funding for clean technology projects to take advantage of this growth opportunity and enhance environmental performance, which are outlined in the following sections.
- To support future investments, Budget 2016 proposes to provide over $1 billion over four years, starting in 2017–18, to support clean technology, including in the forestry, fisheries, mining, energy and agriculture sectors.
- Further details about the allocation of this funding will be provided in the coming months as part of the implementation of the Government's Innovation Agenda.
Specific issues addressed:
Accelerating Clean Technology Development
- $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.
- $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.
Investing in Electric Vehicle and Alternative Transportation Fuels Infrastructure
- Budget 2016 proposes to provide $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 refuelling stations.
Expanding Tax Support for Clean Energy
- Budget 2016 proposes to expand eligibility for accelerated CCA in two important emerging areas: electric vehicle charging and electrical energy storage.The deferral of tax associated with these measures is expected to reduce federal revenues by $19 million over the 2016–17 to 2020–21 period.
Investing in World-Leading Researchers in Clean and Sustainable Technology
- The Canada Excellence Research Chairs Program strengthens Canada's ability to attract and retain world-leading researchers in areas of strategic importance to Canada. Canadian universities receive up to $10 million over seven years for each Chair hosted at their institution.
- Budget 2016 proposes to provide $20 million over eight years, starting in 2018–19, to create two additional Canada Excellence Research Chairs in fields related to clean and sustainable technology. These Chairs will be selected, in addition to the anticipated 20 new Chairs, as part of the upcoming competition to be launched in the spring of 2016.
Increasing Federal Support for Clean Technology Activities in All Regions
- Canada's six Regional Development Agencies support economic and community development by leveraging local networks and capabilities. The Agencies' combined support to clean technology activities amounted to $50 million in 2015–16. Budget 2016 announces that the Regional Development Agencies will double their annual aggregate support for clean technology to $100 million per year, from existing resources, starting in 2016–17.
Advancing Regional Electricity Cooperation
- Budget 2016 proposes to provide $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
Developing Cleaner Oil and Gas Technologies
- Budget 2016 proposes to provide $50 million over two years, starting in 2016–17, to Natural Resources Canada to invest in technologies that will reduce greenhouse gas emissions from the oil and gas sector.Improving Data on the Clean Technology Sector
- Budget 2016 proposes to provide $2.1 million over two years, starting in 2016–17, to Natural Resources Canada to enhance clean technology data, in collaboration with Statistics Canada and Innovation, Science and Economic Development Canada.
Securing a Cleaner, More Sustainable Environment
- Protecting the environment and growing the economy are not incompatible goals.
- A clean environment and a strong economy go hand-in-hand.
- The Government is committed to leaving future generations of Canadians a sustainable and prosperous country.
- To this end, Budget 2016 proposes to provide $3.4 billion over five years, starting in 2016–17, to address climate change and air pollution, protect ecologically sensitive areas and restore public trust in the environmental assessment processes.
Specific issues addressed were:
Addressing Climate Change and Air Pollution
- Budget 2016 proposes to provide almost $2.9 billion over five years, starting in 2016–17, to address climate change and air pollution issues.
This funding will:
- Support the development of the pan-Canadian Framework, including a Low Carbon Economy Fund;
- Help ensure that Canada meets its international obligations;
- Take action to reduce emissions from Canada's largest sources—transportation and energy;
- Advance science and programming activities to better understand and adapt to the changing climate; and
- Enable evidence-based decisions to address air pollution.
Supporting the Pan-Canadian Framework on Clean Growth and Climate Change
- In the context of the pan-Canadian Framework on Clean Growth and Climate Change, the Government has committed to create a Low Carbon Economy Fund. Budget 2016 proposes to provide $2 billion over two years, starting in 2017–18, to establish the Low Carbon Economy Fund.
- Budget 2016 also proposes to provide $109.1 million over five years, starting in 2016–17, to Environment and Climate Change Canada to continue to advance the Government's domestic climate change objectives.
Moving to a Cleaner Transportation Sector
- Budget 2016 proposes to provide $56.9 million over two years, starting in 2016–17, to Transport Canada and Environment and Climate Change Canada to support the transition to a cleaner transportation sector, including through the development of regulations and standards for clean transportation technology.
Supporting Energy Efficiency and Renewable Energy Development
- Budget 2016 proposes to provide $128.8 million over five years, starting in 2016–17, to Natural Resources Canada to deliver energy efficiency policies and programs, and maintain clean energy policy capacity.
- Budget 2016 also proposes to provide $10.7 million over two years, starting in 2016–17, to Indigenous and Northern Affairs Canada to implement renewable energy projects in off-grid Indigenous and northern communities that rely on diesel and other fossil fuels to generate heat and power
Adapting to Climate Change Impacts
- Budget 2016 proposes to provide $129.5 million over five years, starting in 2016–17, to seven federal departments and agencies to implement programming focused on building the science base to inform decision-making, protecting the health and well-being of Canadians, building resilience in the North and Indigenous communities, and enhancing competitiveness in key economic sectors.
- Budget 2016 also proposes to provide an additional $40.0 million over five years, starting in 2016–17, to integrate climate resilience into building design guides and codes.
Ensuring International Environmental Cooperation
- Budget 2016 proposes to provide $61.3 million over five years, starting in 2016–17, to Environment and Climate Change Canada, Natural Resources Canada and Global Affairs Canada to continue international environmental engagement to advance Canada's climate change and air pollution objectives.
Reducing Air Pollution
- Budget 2016 proposes to provide $345.3 million over five years, starting in 2016–17, to Environment and Climate Change Canada, Health Canada and the National Research Council to take action to address air pollution in Canada.
Tax Treatment of Emission Allowance Regime
- Budget 2016 proposes specific income tax rules to clarify the income tax treatment of emission allowances and ensure the appropriate tax treatment of transactions under these regimes.
See the complete Federal Government Budget Plan here.