Canada Budget goes big on green spending as environmentalists criticize tax credits for carbon capture
Conservatives to reveal climate plan with a carbon tax ‘personal savings account’
The plan is a major shift in policy, as the party has previously threatened to scrap the program introduced by Prime Minister Justin Trudeau in 2018. The 15-page document, obtained by The Canadian Press, proposed the carbon price at $20 per tonne, rising no higher than $50 per tonne. Read more: How carbon pricing works across the country The Tories would work with provinces to create a "Personal Low Carbon Savings Account.
As the world confronts a warming climate, the federal Liberals are committing billions more dollars to a variety of measures meant to reduce greenhouse gas emissions across the economy and help drive a "green recovery" from the pandemic-induced economic slowdown.
Finance Minister Chrystia Freeland tabled a budget today that sets aside $17 billion in new direct spending and tax relief measures that the government hopes will decarbonize heavy industry, build a cleaner economy and create jobs.
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On the day Erin O'Toole tacitly gave up his party's opposition to carbon-pricing ("We recognize," he said, "that the most efficient way to reduce our emissions is to use pricing mechanisms") he struggled to explain why his proposal for a lower price on carbon was more altruistic than the policies Conservatives have spent more than a decade condemning. "I have said it is a pricing mechanism for consumers," O'Toole told reporters on Thursday. "It is not a tax." O'Toole surely knows that Conservatives would never accept such dissembling from a Liberal or NDP leader.
"We are at a pivotal moment in the green transformation," Freeland said in a speech to the House of Commons.
"We can lead, or we can be left behind. Our government knows that the only choice for Canada is to be in the vanguard."
Freeland said the measures will help the government meet its greenhouse gas reductions targets under the Paris climate agreement, achieve net-zero emissions by 2050 and preserve 25 per cent of land and marine conservation targets by 2025.
But environmentalists said the budget measures fall short of the transformative change needed for Canada to become a climate leader.
In what appeared to be the announcement of a new federal emissions reduction target, Freeland said the new measures will help reduce greenhouse gas emissions in Canada by 36 per cent compared to 2005 levels by 2030 — well beyond the government's current target of 30 per cent.
How would the Conservative carbon price points card work? Here’s what we know
The Conservatives have released a new climate plan that would create a new low-carbon savings account for Canadians. Economists say it's a cumbersome idea - and it might not work.O'Toole's plan would instead institute a $20 per-tonne-carbon price that would fund what he called a “national personal low carbon savings account.
Environment Minister Jonathan Wilkinson's office later clarified that the 36 per cent number represents the floor for a new target — not the actual target. Prime Minister Justin Trudeau is expected to unveil a more ambitious national emissions reduction target at a climate summit hosted by U.S. President Joe Biden this week.
Targeting industry, retrofitting homes
Much of the proposed spending focuses on giving private sector companies incentives to develop and adopt clean technology.
Five billion dollars over seven years will go to a fund that helps large-emitting companies reduce their greenhouse gas emissions. The government says the Net Zero Accelerator will help steel, aluminum and cement producers and the auto and aerospace sectors cut pollution and invest in clean technologies.
To help foster a domestic clean technology manufacturing sector in Canada, the government said it will offer companies that manufacture zero emission devices, like solar panels and electric vehicles, a 50 per cent cut to their corporate or small business taxes for the next 10 years.
5 things to watch for when the Liberals unveil the federal budget
After a year that saw federal spending reach levels not seen since the Second World War, the Liberal government will release a long-awaited budget Monday that will offer a roadmap to a post-pandemic economic recovery. Deputy Prime Minister Chrystia Freeland's first budget as finance minister will attempt to balance measures meant to reduce the severity of COVID-19's third wave with efforts to set the stage for an economic rebound. The budget will account for record emergency spending driven by measures to fight the pandemic and blunt its economic impact.
For homeowners and landlords, the budget includes a $4.4 billion plan to retrofit residential buildings to make them more energy efficient. The money will flow through the Canada Mortgage and Housing Corporation (CMHC) and will take the form of interest-free loans of up to $40,000 for projects like replacing oil furnaces with higher-efficiency furnaces, installing better wall insulation, adding solar panels or replacing drafty windows and doors.
The government estimates more than 200,000 households could take advantage of that program.
Another initiative targeting heavy emitters is a tax credit for companies that invest in technology that captures carbon dioxide emitted by fuel combustion or other industrial processes and stores it in the ground instead of releasing it into the atmosphere. The budget said the government will undertake a 90-day consultation process to determine the rate of the incentive for capital investments in carbon capture, utilization and storage (CCUS).
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"Canada is a leader in CCUS, with domestic projects that currently capture 4 megatonnes of carbon every year, but we have the technical and geological capacity to capture and store much more," the budget document said.
Alberta Premier Jason Kenney, who is a strong proponent of carbon capture technology as a way of reducing emissions from the province's energy sector, recently asked the federal government for $30 billion in funding to explore CCUS technologies. But in addition to the tax credit, today's budget pledges only $319 million over seven years for the federal natural resources department for carbon capture research and development.
Other climate initiatives include the establishment of a federal "green bond" designed to attract investment to projects that can help Canada meet its climate goals, like green infrastructure and nature conservation.
Getting more electric vehicles on the road is a priority for the Liberals under their net-zero emissions plan and the budget promises $56 million over five years to work with countries like the U.S. on bringing in standards for zero-emission vehicle charging and refuelling stations.
Monday's budget also promises $2.3 billion in funding to federal departments like Parks Canada and Fisheries and Oceans to conserve up to one million square kilometres of land and inland waters to meet the country's 2025 conservation targets.
Post-COVID-19 Canada: What the federal budget tells us about the end of the pandemic
In the first budget in over two years, the Liberals laid out their vision for a post-COVID Canada -- and dropped some hints about when a post-COVID Canada could become reality.From childcare aimed at paving the way for women to re-enter the workforce to a new hiring program that would help foot the bill of giving Canadians new jobs, the budget offered small glimpses into the government’s vision of a post-COVID Canada – and a timeline for when that might come to pass.
Environmentalists reacted with a mixture of praise and criticism to the climate portion of the budget. Many said they were happy to see increased investments in things like clean technology and home retrofitting. Others criticized the fact that some of the funding would go to oil and gas companies.
"Some investments made by budget 2021 are extremely helpful — particularly investments in clean transportation, energy efficient homes, resilient agriculture and Canada's first green bonds," said Teika Newton, a spokesperson for Climate Action Network Canada.
"Some investments made by budget 2021 are extremely worrisome — investments in carbon capture and storage risk perpetuating our dangerous addiction to fossil fuels, and some of the forestry investments perpetuate a transactional relationship with nature that treats it like a commodity we can trade."
Julia Levin, the climate and energy program manager at Environmental Defence, criticized financial support for the energy sector.
"Hiding in the details of this budget were some concerning elements, including a new commitment of more than $6 billion in financial support and new tax breaks for high-emitting sectors, including oil and gas," said Levin. "We need to be starting the wind-down of the oil and gas sector in order to ensure that we have a liveable planet. These supports do the exact opposite."
Experts say money for green recovery a good start, but is it enough? .
Finance Minister Chrystia Freeland said Canada is at a "pivotal moment in the green transformation."However, experts are critical of the tax credits geared toward the oil and gas industry. They also say while the federal spending is a good start, the effort to combat climate change can't stop here.