2017 Budget – Creating Canada’s Clean Growth Economy

March 28, 2017

The 2017 Budget reiterated the Federal Government’s commitment to decarbonizing the economy with significant investments planned in green infrastructure and the growth of clean technology sector. This solidified the progress from 2015 and 2016 that started with Canada’s commitment to the Paris Agreement, followed by the Vancouver Declaration on Clean Growth and Climate Change and the subsequent Pan-Canadian Framework on Clean Growth and Climate Change. The budget also reiterated Canada’s commitment to the G20 and Asia-Pacific Economic Cooperation initiatives to phase out fossil fuel subsidies and proposed modifications to the tax treatment of some oil and gas related expenses.

The Budget addressed climate-related impacts through adaptation initiatives such as the plan to set up a Canadian Centre for Climate Services which will aim “to improve access to climate science and regional climate resilience centres.” There is also a plan to conduct risk assessments on federal transportation infrastructure assets “to ensure that Canada’s federally managed roads, bridges, rail systems and ports can withstand the effects of natural disasters, climate change and extreme weather events”. Climate change mitigation-related initiatives supported through this budget include energy efficiency improvements in the transportation and building sectors, accelerating the replacement of coal-generated electricity, and reducing Indigenous and northern communities’ reliance on diesel.

Following the Bank of Canada’s warnings and the project announced by the Canadian Securities Administrators this week, the 2017 Budget commitments for climate-related investments are yet another signal that Canada is transitioning towards a low-carbon economy, and it is time for the private sector to take note – what does this mean for each sector across the Canadian economy? How will this shift affect Canadian companies? Is this a risk, opportunity, or both? How does each company see itself fitting into a new low-carbon economy, and how does this view affect its strategy and business model?

Here are our top 10 climate-related budgetary highlights:

Accelerating the Replacement of Coal-Generated Electricity

  1. $11.4 million to support the accelerated replacement of coal-fired electricity by 2030 and setting leading performance standards for natural-gas-fired electricity generation (over 4 years, starting in 2018-19, to Environment and Climate Change Canada).

Adaptation and Climate Resilience

  1. $743.2 million to Indigenous and northern communities for adaptation and climate resilience generally, as well as to specific initiatives that include: reducing reliance on diesel south of the 60th parallel, addressing energy security north of the 60th parallel, and a climate change and health adaptation program (specific to First Nations and Inuit communities).
  2. $73.5 million to establish the Canadian Centre for Climate Services which will aim to improve access to climate science and regional climate resilience centres, and build regional adaptation capacity and expertise (over 5 years, starting in 2017-18).
  3. $47.0 million to develop and implement a national action plan to respond to the broad range of health risks related to climate change (over 5 years, starting in 2017-18, to the Canadian Centre for Climate Services).

Policy, Communications and Engagement

  1. $135.4 million to coordinate climate action across government agencies, including focusing on enhancing action on short-lived climate pollutants, decarbonizing the transportation system, and maintaining policy and coordination capacity, as well as to develop a legislative framework for offshore renewable energy projects (over 4 years starting in 2018-19 to Environment and Climate Change Canada and Natural Resources Canada).

Clean Technology

  1. $1.4 billion in new financing support for Canada’s clean technology sector. This will support research, development, demonstration and adoption of clean technologies, and will enhance the collaboration and establish new ways of measuring success, including increasing the workforce participation of women in this sector (over the next 5 years, to Canadian technology companies through the Business Development Bank of Canada and Export Development Canada).

Green Infrastructure, Buildings and Transportation

  1. $21.9 billion to advancing Canada’s efforts to build a clean economy by investing in green infrastructure, including initiatives that will support the implementation of the Pan-Canadian Framework on Clean Growth and Climate Change. Investments to support Canada’s transition to a clean economy will flow through three distinct streams: bilateral agreements between provinces and territories, the Canada Infrastructure Bank, and a series of other national programs (over the next 11 years).
  2. $67.5 million to renew and continue existing energy efficiency programs (over 4 years, starting in 2018-19, led by Natural Resources Canada).
  3. $56.9 million to develop GHG regulations in the marine, rail, aviation and vehicle sectors (over 4 years, starting in 2018-19, led by Transport Canada).
  4. $13.5 million to provide expertise to other federal departments in the best approaches to implementing energy efficiency and clean energy technologies, to retrofit federal buildings, and to reduce or eliminate emissions from vehicle fleets (over 5 years, starting in 2017-18).

For more information, you can visit this blog.

Co-written by Olena Kholodova and Bryan Zimmerman