On the Reccord: Our Remarks to the House of Commons Standing Committee on Finance

This afternoon, Clean Energy Canada director Merran Smith presented the following remarks to the House of Commons Standing Committee on Finance:

Thank you for the invitation to present today.

I’m the Director of Clean Energy Canada, and I’m here with my colleague, Clare Demerse, our Senior Policy Advisor based here in Ottawa.

Clean Energy Canada is working to accelerate Canada’s transition to a clean energy economy. When I say “clean energy,” I’m talking about renewable energy sources like wind, solar, and hydro power as well as innovation in the way we consume energy.

I’d like to make three points in my comments to you today:

First, the clean energy sector is now very big business around the world. With almost a quarter of a trillion invested globally last year, this is no longer a “boutique” sector and Canada needs to take note of this rapidly changing industry.

Second, Canada’s clean energy sector has huge potential. We are producing both clean electrons and the clean energy technologies and services that are increasingly in demand around the world.

Third, the federal government could be doing much more to support the clean energy sector in Canada.

I’m going to start with the big story: The world is making a transition to clean energy at a pace that would have been tough to imagine just a few years ago.

A few facts help illustrate the scale of that shift:

1. Investors directed $207 billion dollars to clean energy projects in 2013, which is coming close to the amount invested in fossil-fuel power generation.
2. 144 countries now have some form of renewable energy targets, and mainstream brands like Walmart, IKEA, Starbucks along with Google and Facebook have committed to be powered 100% by renewables by 2020.
3. In the past five years, the price of a solar module has dropped—I should say plunged—by 83 per cent. This is a game changer for global solar uptake.
4. And finally, the big headline from China used to be that they were building a new coal fired electric plant every week. Now, they are building a new windmill every hour.
   • 2013 was the first time China invested more money in new renewable-energy capacity than it did in new coal- and gas-fired power plants.

This growing global commitment to clean energy has significant implications for the competitiveness of Canadian businesses.

Fortunately, Canada is already relatively well-positioned for success in the clean energy economy.

Analysis from McKinsey, done for Natural Resources Canada, found that our country has significant clean power potential.

We’re already the home of the world’s third-largest hydropower generation capacity. McKinsey also found that Canada could take a lead in sectors like solar power equipment, marine power, and energy efficient buildings, among others.

So it’s not like we’re starting from nothing.

Canada saw well over $6 billion invested in clean energy last year, moving us from 12th to 7th place among G20 nations.

But it’s essential to emphasize that in recent years, this investment has been driven by provincial—not federal—leadership.

So while provinces have jurisdiction over electricity generation, the federal government could make a huge contribution by actively and strongly supporting the growth of the clean energy sector.

In addition, clean energy is a core climate change solution.  Thus, progress in the clean energy sector could help the federal government meet the national climate target it adopted for 2020, a target that we are not on track to meet.

So we recommend two areas of investment to support clean energy in Budget 2015.

First, building on progress in previous budgets, add three more types of clean power technologies to Capital Class Allowance 43.1 and 43.2, which are designed to support clean energy directly:

• building-integrated photovoltaics, which replace traditional building materials like shingles and windows with solar materials
• investments to make buildings “solar panel ready”
• and power storage technologies that help close the gaps when the wind isn’t blowing or the sun isn’t shining.

Second, create more demand for clean power indirectly, by providing a rebate to Canadians who buy an electric car. This will also have direct benefits for the growing number of Canadian companies involved in the production and servicing of electric vehicles.

Electric cars are significantly cheaper to operate than conventional cars over their lifetime, but they cost more upfront. Rebates help reduce that sticker shock so Canadians can afford to drive cleaner cars.

Because the Government of Canada likes to be “harmonized” with the U.S. on vehicle and climate policies, as was reiterated by Minister Aglukkaq last week, we recommend matching the current U.S. federal rebate, which offers up to $7,500 for the purchase of an electric vehicle.

It’s clear that the American rebate is working: the U.S. has over 220 thousand electric cars on the road today while we have under 9 thousand—far fewer even on a per-capita basis.

Thank you, and I look forward to your questions.