Clean Energy Canada | Craving more details on the 2016 federal budget? Dig in.
March 24, 2016
We sent out a statement about the federal budget the day it came out (our quick verdict: thumbs up). And we put together an op-ed that offers some context.
But for the true clean energy connoisseur, those quick snacks may not have satisfied your appetite.
If you’re looking for the full menu of clean energy commitments from Budget 2016, this blog is for you. So grab a copy of the budget text—although, let’s be honest, you’ve probably downloaded it already—and let’s dig in.
In no particular order, here’s what the budget serves up for clean energy.
Tax support for top-priority clean technologies: The budget offers tax breaks to help businesses deploy two of the most critical clean energy technologies: “electric vehicle charging and electrical energy storage.” Businesses that invest in these technologies can now write them off at an accelerated rate, a tax break estimated to be worth $19 million from now to 2021.
In the case of electric vehicle (EV) charging, the benefit will be more generous for “chargers that provide enough power for long-distance travel.” And as per a longstanding request of the Green Budget Coalition, accelerated depreciation for power storage will now apply to a far bigger range of equipment—an approach that makes any kind of power more efficient, but is very likely to boost clean power over fossil. (p. 152)
But there’s more (for EVs): Natural Resources Canada also gets $62.5 million, starting this year, for “alternative transportation fuels” infrastructure: EV charging and natural gas or hydrogen refuelling. The funding will be allocated in partnership with municipalities, provinces/territories, and the private sector. (p. 151)
Off grid? Off diesel: Delivering on another longstanding Green Budget Coalition request—and in line with the recent Trudeau-Obama climate declaration—the budget provides $10.7 million over two years to power remote communities with renewables instead of diesel. (p. 158)
Small dollars, big potential: Natural Resources Canada gets $2.5 million over the next two years to study regional clean energy cooperation. The funding aims to identify “the most promising electricity infrastructure projects with the potential to achieve significant greenhouse gas reductions.” (p. 154) That kind of planning will help Canada to take full advantage of our existing clean power resources, and we’re going to need to make smart grid and transmission investments under a national climate plan. If it’s used wisely, this funding will lay essential groundwork for cleaning up Canada’s electricity sector.
Better spreadsheets: The budget commits $2.1 million (over two years) in funding for data that will quantify “the clean technology sector’s economic contribution to Canada’s economy.” The lack of public clean tech data has been a longstanding gap in Canada, and it’s great news that, as the budget promises, we’re moving closer to understanding “the contributions this sector is already making to the Canadian economy.” (pp. 154–155)
There will be cost curves: The budget adds a new wrinkle to the Low Carbon Economy Fund, which was a platform commitment to provide $2 billion for provincial and territorial actions to cut emissions. (As the platform indicated, the dollars are to be allocated over two years, starting next year.) This week’s budget specifies that the funding “will be allocated towards those projects that yield the greatest absolute greenhouse gas reductions for the lowest cost per tonne.” (p. 157)
R&D, inside and outside government: The budget provides three kinds of support to clean research and development:
- New dollars for Sustainable Development Technology Canada’s SD Tech Fund, which has been called “one of the most successful cleantech funding programs in the world” by Ontario-based Morgan Solar. The funding is $50 million over four years, starting in 2017. (p. 150)
- Two new research chairs at Canadian universities “in fields related to clean and sustainable technology.” The $20 million in funding starts later—in 2018—and is spread over eight years. (pp. 152-153)
- While the previous two commitments support clean tech as a whole, Natural Resources Canada receives $82.5 million over two years, starting this year, for clean energy specifically. The funding aims to help commercialize new clean energy technologies. (p. 151)
Nuts and bolts, part 1: The team at Environment and Climate Change Canada gets new resources to get climate work done. It’s not glamorous, but it is essential. A total of $109.1 million over the next five years will fund science, data collection, policy development and regulations for Canadian climate action. (p. 157)
Nuts and bolts, part 2: Work by Canadian officials on international climate action—both via the UN climate convention, and in North America—also received new funding, for a total of $61.3 million over the next five years. (p. 159)
Nuts and bolts, part 3: Natural Resources Canada gets $128.8 million over five years, starting this year, “to deliver energy efficiency policies and programs”—notably stronger standards and codes—and for “clean energy policy capacity.” Under the previous government, this department was pre-occupied with oil and gas pipelines, so dollars for clean energy capacity are an essential investment to deliver on a different agenda. (p. 158)
Cleaning up abroad: Clean tech firms can tap into a renewed Canadian Technology Accelerator Initiative, which aims to boost exports to the U.S., U.K., France and India by providing connections and desk space for eligible companies—a value of $4 million over the next two years. (p. 123)
Jobs, jobs, jobs: A one-year, $ bump in funding will be used in part to “create new green jobs for youth” so that young people can “contribute to economic growth in environmental sectors.” (p. 70)
It’s a very long list, and it could be even longer: there are commitments for adaptation to climate impacts, green infrastructure, reducing greenhouse gas emissions from federal buildings, and more.
The Next Course
Some have critiqued the climate portions of this budget for a lack of focus: instead of a single cohesive approach, you find clean energy’s footprints all over the place.
But we see that as a strength. Clean energy is big business globally. Here in Canada, it has now (finally!) grown beyond a few pages in the “green” chapter of the budget to be treated as a full-fledged economic strategy. So it’s entirely appropriate—and encouraging—to mention clean energy when you talk about job creation, trade, university research, or Northern Canada.
Of course, the words the government used to describe this budget won’t buy you anything at all. But their wording does, perhaps, offer a glimpse of the way the government sees the world.
So to round out the meal, two final bites of budget rhetoric:
- At the start of the document, the government lays out the five priorities that it says shaped this budget. “A clean growth economy” is among them, and the budget describes this year’s spending as “strategic investments” in clean tech (p. 22)
- On p. 150, possibly the best line of all for clean energy: “The investments made in Budget 2016 are just the start and additional actions will be coming.”
In other words, better save room for the next course.