The federal government is allocating billions of dollars to supporting a post-pandemic “green recovery”. In total, $17.6 billion has been earmarked to reduce greenhouse gas emissions and support a low-carbon economy.
The overarching goals of the budget are to reduce greenhouse gas emissions by 36% below 2005 levels by 2030 (a small increase from 30% below 2005 levels) and to conserve 25% of lands and oceans by 2025.
Here’s a partial breakdown of how that $17.6 billion will be portioned out:
- $5 billion on top of $3 billion already pledged to the Net Zero Accelerator for helping large-emitting companies (e.g. oil and gas, steel, aluminum, cement, etc.) to reduce emissions and transition to low-carbon alternatives;
- $1 billion for attracting private investment to Canadian clean technology businesses;
- Halve corporate tax for clean energy and electric vehicle manufacturers;
- Business tax credit for carbon capture, utilization, and storage (CCUS) as part of a goal to increase annual carbon capture from 4 Mt to 15 Mt;
- $319 million for CCUS research;
- Issuing a “green bond” for funding conservation, clean technology, and green infrastructure;
- $4.4 billion program for interest free loans of $40,000 for homeowners and landlords for retrofitting homes with green improvements;
- $1.4 billion for climate resiliency projects (e.g. wildfire mitigation, stormwater management, ecosystem restoration);
- Support for Indigenous Guardians and partnerships with Indigenous peoples to conserve lands and species at risk;
- $200 million to Natural Infrastructure Fund to support green and hybrid infrastructure projects, and;
- Increase carbon price to $170 per tonne of emissions by 2030.
Many of these measures, such as the loans for homeowners and partnerships with Indigenous peoples, are good steps in the right direction. It is especially heartening to see a government that is willing to spend money on public infrastructure after years of governments tending to decry the institution of government and slashing budgets and services across the board.
But the opposition and many environmental groups say that this budget does not make bold enough moves to create the transformative change that is necessary for a swift transition to a low-carbon economy. First, the reliance on the public sector along with investments in oil and gas could slow down transition efforts. Second, while CCUS, offsets, and net-zero plans may reduce emissions at home, the companies that participate in these programs often just unload them somewhere else. Finally, aside from the green bond, there is little to no plan for how the government will pay for all of this, especially since they voted down a robust wealth tax recently and did not include it in the budget.
The moves laid out in the budget are welcome and necessary, but we need bigger, bolder strides if we are going to effectively tackle the climate crisis.
- Department of Finance Canada. (2021). Budget 2021 A Healthy Environment for a Healthy Economy. https://www.canada.ca/en/department-finance/news/2021/04/budget-2021-a-healthy-environment-for-a-healthy-economy.html
- Ballingal, A. (19 Apr., 2021). Budget bolsters federal climate plan with $17.6B in new spending. https://www.thestar.com/politics/federal/2021/04/19/budget-bolsters-federal-climate-plan-with-17b-in-new-spending.html
- Jones, R.P. (19 Apr., 2021). Budget goes big on green spending as environmentalists criticize tax credits for carbon capture. https://www.cbc.ca/news/politics/liberal-federal-budget-2021-reaction-1.5991419