On April 16, Canada’s Deputy Prime Minister and Minister of Finance, Chrystia Freeland, released Budget 2024: Fairness for Every Generation.
“Our government first came to office with a vow to strengthen and expand the middle class. We delivered on that pledge by reducing poverty, especially for children and seniors, and creating millions of good jobs for Canadians. Our work isn’t done,” said Freeland. “We will drive our economy toward growth that lifts everyone up. That is fairness for every generation.”
As Canadians face increasing and costly climate impacts, the federal budget is an opportunity to deliver much needed investments to ramp up decarbonization but also to support a globally competitive green economy. When it comes to environmental initiatives, Budget 2024 advances some aspects of climate action and support for clean energy, but misses some key opportunities to drive optimal sustainability and economic competitiveness.
Last year, Canadians faced an unprecedented season of wildfires across the country. The federal government has a plan to reach net-zero emissions by 2050, using the most cost-effective means possible, such as carbon pricing. Credit: Government of Canada/NRCan.
Budget 2024 focus areas for environmental expenditures and climate action include the following:
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Providing more than $3.6 billion to protect nature and species at risk, and more than $1 billion to protect marine and coastal areas.
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Keeping people and communities safe from the impacts of climate change, with more than $1.6 billion to support Canada’s National Adaptation Strategy.
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Committing $800 million to support Indigenous-led conservation within Canada and best practices for implementing traditional Indigenous knowledge to protect the environment.
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Banning the manufacturing of harmful single-use plastics, and working with provinces and territories towards a goal of zero plastic waste by 2030.
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Introducing the new Electric Vehicle Availability Standard, which will improve the availability of new electric vehicles across the country.
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Providing more than $2.1 billion to make zero-emission vehicles more affordable, and more than $1 billion to build more charging stations across Canada.
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Developing and releasing an implementation plan to phase out public financing of the fossil fuel sector, including by federal Crown corporations, by fall 2024.
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Putting a price on carbon pollution, to make big polluters pay while ensuring eight out of ten families in provinces where the federal fuel charge applies get more money back through the Canada Carbon Rebate than they pay, with lower-income households benefitting most.
Mixed reactions on Budget 2024
Industry associations and environmental organizations are sharing mixed reactions for Budget 2024, with some claiming it falls far short of spending the necessary resources to address the climate crisis, while continuing to let big polluters and the fossil fuel industry off the hook.
“The commitments outlined in Budget 2024 will continue to advance climate progress in ways that drive growth and economic competitiveness while keeping energy affordable,” states Rick Smith, president of the Canadian Climate Institute. “In particular, this budget confirms the federal government is working to implement a range of measures to unlock clean growth and help companies invest in low-carbon innovation, such as investing in critical minerals development, renewable energy, carbon contracts for difference, and various investment tax credits (ITCs).”
While Smith welcomes additional detail on the coverage, timelines, and conditions for accessing the Clean Electricity ITCs, he says the proposed conditions for access represent a significant missed opportunity. “Making access to these ITCs conditional on provincial energy roadmaps—as the Canada Electricity Advisory Council has called for—represents a pragmatic path forward that we hope the government considers as it consults on the final design in the coming months.”
According to Smith, supporting communities to prepare for escalating climate damages requires sustained focus and investment. “Unfortunately, this budget continues a trend of under-investing in crucial preventative measures, such as delivering on federal responsibilities under the National Adaptation Strategy. And despite the significant funding committed to addressing Canada’s housing crisis, this budget misses an opportunity to ensure new homes are built to be more resilient to climate hazards, which will drive up the costs of home ownership over time as climate-fuelled disasters escalate.”
Caroline Brouillette, executive director of the Climate Action Network – Réseau action climat Canada (CAN-Rac), welcomes steps towards linking housing and climate, and establishing a Youth Climate Corps.
“But let’s be real: confronting the converging crises we face requires a massive scale-up of resources in solutions and a scale-down of investments in the problem – which Budget 2024 does not deliver. Instead, today’s budget showcases a double standard when it comes to pinching pennies: stinting on climate investments while continuing to spend billions to support the fossil fuel industry and caving on a windfall profits tax,” emphasizes Brouillette.
“Minister Freeland must step up her game to protect people from worsening floods, fires, droughts, storms – and the fossil fuel industry’s nefarious influence on our democracy.”
Meanwhile, the Canadian Renewable Energy Association (CanREA) appreciates the positive steps for the renewable energy and energy storage industry regarding the ITCs, the Indigenous Loan Guarantee Program and the Green Choice Program.
According to CanREA, Canada’s refundable ITCs for clean technologies, such as wind, solar, storage and green hydrogen, represent a Canadian response to the American incentives for credits for renewable energy and green hydrogen, per the Inflation Reduction Act 2022.
CanREA particularly commends the feds for the commitment to Indigenous economic empowerment in Budget 2024. The introduction of enabling legislation for the Indigenous Loan Guarantee Program marks a significant step towards fostering economic opportunities for Indigenous communities across the country.
“We are pleased to see that the enabling legislation for the Indigenous Loan Guarantee Program has been tabled as part of the Budget,” said CanREA’s president and CEO, Vittoria Bellissimo. “This program is a gamechanger that will boost opportunities for Indigenous communities and companies to build the renewable energy and energy storage projects that Canada needs, both as equity partners and as developers in their own right.”
There was also promising news on the timeline for the Clean Technology ITC, according to CanREA’s federal policy director, Fernando Melo, who was on site for the introduction of the Budget. “It is reassuring to hear that the government anticipates Bill C-59 receiving Royal Assent before June 1, 2024. The passage of this bill will enable CanREA’s member companies to access the Clean Technology ITC, which will spur growth in Canada’s renewable energy and energy storage sectors,” said Melo.
CanREA concedes that while Budget 2024 did not provide the implementation legislation for other ITCs, it provides an update to the timeline for these to be legislated. CanREA states it will continue to advocate for accelerating the rollout of Canada’s ITCs.
Featured image credit: Government of Canada
