Centre for Civic Governance

The Harper government has taken a pause in financing federal action on climate change.

In his budget speech Thursday, Finance Minister Jim Flaherty was literally silent on the issue – climate change was not mentioned, though the government has in the past described it as one of the major challenges of the age.

Rather than provide new spending for programs to reduce Canada's greenhouse-gas emissions, the government is standing pat as it prepares to regulate emission reductions in transportation, electricity and industrial sectors.

Environmental groups say Ottawa is failing to stimulate the development and adoption of the technologies that are needed if Canada is to meet its emission targets.

“Just when we thought that it couldn't get any worse, [Thursday's] budget is a monumental failure of this government to do what it takes to address climate change in a meaningful way,” said Graham Saul, executive director of Climate Action Network Canada.

Environment Minister Jim Prentice said the government intends to impose regulatory limits on emissions in concert with the United States, and will not provide additional incentives for companies to meet their legal obligation, beyond some “clean energy” funds established in last year's budget.

“The government will be moving forward on a regulatory basis with initiatives to deal with greenhouse-gas emissions,” Mr. Prentice said. That includes imposing new Canada-U.S. emission standards for automobiles this month, and then regulations for heavy trucks, ships, trains and planes.

The government will also move aggressively to reduce emissions in the power sector, but the minister said it will move more cautiously on regulations in the industrial sector, including the oil sands, to ensure the new rules don't drive jobs and investment out of the country.

Although it is not included in the budget, Ottawa will also contribute an as-yet unspecified amount toward a $10-billion-a-year international fund to assist poorer countries in reducing emissions and adapting to the impacts of climate change.

The Harper government has pledged to reduce Canada's greenhouse-gas emissions by 17 per cent from 2005 levels by 2020, a goal that critics say will require significant investment in clean technology as well as regulations to limit carbon dioxide emissions.

In the U.S., President Barack Obama has committed major spending on emerging renewable and conservation technologies as part of a global race to stimulate clean-tech job creation. Environmental groups say the U.S. is outspending Canada 14 to 1 on a per capita basis.

“It's frustrating because it seems like the government still sees the economy and environment as being adversarial when that doesn't seem to be the mindset of a whole lot of other governments globally or even provincial governments,” said Tim Weis, director of renewable energy for the Calgary-based Pembina Institute.

While the budget boasts that Canada is a leader in clean electricity, the government has effectively ended federal investment in renewable power by failing to extend an ecoEnergy program. EcoEnergy provided a subsidy of one cent per kilowatt/hour for electricity generated from wind, biomass and other renewable sources.

Ottawa also rebuffed a request from Sustainable Development Technology Canada, an arm's-length government agency, to replenish its climate-change fund. The agency helps finance clean-tech business startups that have emission-reducing technology.

It has, however, provided $25-million a year and some tax incentives to the forestry industry to invest in new bio-energy product at mills across the country. The forestry sector has been a leader in generating power from wood waste, but a recent study from the Forest Products Industry Association argued that the industry could dramatically increase its renewable energy output – and get more value from its wood supply – with the proper government incentives.

Shawn McCarthy