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For years, federal climate policy has been dogged by — if not defined by — missed opportunities.
A regulated phaseout of coal power that spurred a boom in fossil gas power. A carbon pricing system that included loopholes for oil and gas production. A “sustainable jobs” plan that did not guarantee new green jobs.
For climate advocates, these missteps have been endlessly frustrating. But in each of these cases and others, at least the federal government was taking a swing at the problem. It could fairly be said that for every step backward, the government was taking two steps forward.
That era of progress, inconsistent and incomplete as it was, now appears to be on thin ice.
Tuesday’s fall economic update — the latest edition of the government’s annual “mini-budget” — marked a strategic shift for the feds. While not a complete turn toward austerity, this update signals a new era of fiscal restraint.
In total, the update included only $3.5 billion per year in net new spending. That’s a pittance for a federal government with a half-trillion-dollar budget. It also marks a major departure from the government’s last few budgets and fiscal updates, each of which included significantly more new spending.
Instead of investing new public money to solve the biggest problems facing Canadians, such as housing affordability, the government has instead opted to repurpose existing programs, to offer loans in place of direct investments, and to promise new plans and policies at some point in the future. Basically, anything to avoid spending money right now.
Bay Street and the federal Conservatives have long called for the government to cut back on spending, despite Canada’s enviable fiscal position relative to our peers and, perhaps more importantly, despite the federal government’s strong fiscal position relative to the provincial governments who will be called on to pick up the slack. Nevertheless, the feds have taken the bait and shied away from strong public leadership at this critical juncture.
That abdication of responsibility is all the more remarkable given the public’s evident discontent with the current Liberal government. This fiscal update was an opportunity — another missed opportunity — to make ambitious investments that would be both impactful and popular on a number of files.
Which brings us back to the climate issue.
The crux of the problem is that the Canadian economy is drastically underspending on climate action. Depending on who you ask, we need to be investing $50 billion to $100 billion more per year to achieve a fully decarbonized economy by 2050.
To its credit, the federal government is already spending more than $10 billion per year on that front, but it’s simply not enough given the urgency of the crisis. And while it is not the federal government’s sole responsibility to make up that enormous investment gap, there is no doubt it has a key role to play.
And that’s precisely why this turn toward “fiscal restraint” is so dangerous. The government has not yet achieved a level of climate spending that permits it to rest on its laurels. We need significantly more money now and into the future to shift the economy away from the production and consumption of fossil fuels — and to do so in an equitable way.
For example, this fiscal update could have included a big push on energy-efficiency retrofits. Fronting the full cost of electric heat pumps for low-income households across the country would cut emissions from gas and oil heating, create a boom in installation jobs, and save those households money on their energy bills. All we got were details on a previously announced, and much more limited, program to help households in some parts of the country get off heating oil.
We could also have seen a scaling up of support for public utilities to build vital renewable electricity infrastructure, perhaps with ambitious federal equity stakes to help get more interprovincial transmission projects off the ground. Instead, the government extended its clean tech investment tax credit to systems that burn waste biomass, which is, at best, a marginal climate policy and hardly a structural solution for our long-term power and heating needs.
In the wake of yet another record-breaking wildfire season, you would be forgiven for expecting more climate urgency from this government.
We did get a price tag for the various subsidies the federal government has doled out to companies in the electric vehicle supply chain over the past six months. In total, the feds will hand out about $1.4 billion per year over the next few years. That’s the kind of industrial policy we need more of, though the details matter. Many of those agreements are no-strings-attached subsidies that may simply pad corporate profits, as opposed to public ownership stakes that pay back over time.
All in all, this fiscal update was more than just another missed opportunity. It reflects a government that feels it has done enough on climate change already or, at least, one that doesn’t feel like it can afford to do more.
Neither of those things is true. And as we turn our attention toward Budget 2024, let’s hope the government figures it out.
Hadrian Mertins-Kirkwood is a senior researcher with the Canadian Centre for Policy Alternatives.
Comments
Remember those $5000 EV rebates are less than the tax people pay for their EVs. So no they didn't spend $1.4 billion.
"It could fairly be said that for every step backward, the government was taking two steps forward."
It could fairly be said that for every step forward, the Trudeau Liberals have taken two steps backward.
A climate plan premised on fossil fuel expansion is a plan to fail.
When the IPCC issued its latest report, then-Environment Minister "Wilkinson reaffirmed Canada's commitment to phasing out fossil fuels and achieving net zero carbon emissions by 2050, but said achieving that target will require money generated by fossil fuels."
"Ottawa says it must maximize revenue from the Trans Mountain pipeline to fight climate change" (CBC, 2021)
Trudeau (2016): "There is growth to be had in the oilsands. They will be developing more fossil fuels while there's a market for it, while we transition off fossil fuels."
Trudeau (2017): "No country would find 173 billion barrels of oil in the ground and just leave them there."
Transitions start by moving in the direction you wish to travel. Doubling down on fossil fuels takes us in the wrong direction. Building fossil-fuel infrastructure locks us into a fossil-fuel future. When you're in a hole, stop digging.
Okay. Fair comment on the most recent Liberal quotations. But I wouldn't take the off base comments politicos made nearly a decade ago too seriously today, especially when economics is now starting to do the heavy lifting to erode the demand for fossil fuels.
All Canadian politicians seem incapable of walking forwards, so are we are left with the huge irony of actually measuring backward steps between parties?
Anybody hazard to guess how many steps backwards a Poilievre Conservative government will take us on the climate file? My guess would be five or more, which is an argument to NOT vote for them on this single issue alone compared to the others. But then you've also got full speed in reverse on social programs, like healthcare and childcare, on women's rights, on keeping religion out of the halls of government, not to mention on science and on fiscal management measured as policy during and after a worldwide pandemic (Liberal vaccine efforts saved thousands of lives; Conservatives were enraptured by conspiracies), and so forth.
To claim we "survived" Harper is not accurate, especially when portraying a Poilievre government as potentially the same. The damage to science by Harper was permanent in too may respects. Just ask medical researchers and climate scientists if they have overcome Harper's damage. Now we have the modern version of right wing extremist madness permeating his old party.
One has to ask, would some critics place punishing Trudeau / Libs above all other considerations in the next vote due solely to climate insincerity and weakness? In my view, especially when the system ignores democratic proportionality, why vote at all when the other big party is far, far worse?
In my riding the vote could go in any one of three directions. This necessitates analysis to figure out which candidate will not just walk us backwards the least, but who can actually win against the Conservative candidate who would clearly turn the ship around 180 degrees and hit full speed. In non-competitive ridings, for example Alberta's Yellowhead, the Conservatives have such a strong lock on the vote that it's a fortress. This frees climate fighters in, say, Rocky Mountain House to vote their conscience all they want, stay home, or slag voters who strategically vote for the strongest Liberal / NDP / Independent in distant swing ridings to keep the Conservatives from majority rule across the nation. The results will always, without fail, be the same in solid, near-totalitarian Conservative ridings where single issue climate warriors can afford to adorn themselves with sackcloth and ashes and criticize other's voting choices in other provinces with a holier-than-thou narrative.
We have just taken advantage of the federal government subsidy to install a heat pump. It is wonderfully efficient. We appreciate the fact that the federal Liberals have taken action on climate change in an unprecedented way. However, more bpneeds to be done. I think the government is reeling from the continuing poll results showing that Canadians are leaning toward Pollievre. The problem as I see it, is that the federal government has failed to advertise their fiscal success and positive policies. For example,, many have no idea they are receiving carbon rebates. The money goes into their bank accounts and they don’t even see it! Further, they have allowed the Conservatives to make people think we are in economic trouble, and that the cost of living due to the pandemic is because of failing government policies. They need to show that this is a global problem. The federal government needs to find a very effective way to inform public opinion and to increase, not decrease spending on lowering carbon emissions and supporting a green economy. And advertise their positive actions. Find the best media strategists and use them! Do not allow Pollievre, the liar to damage the coalition formed with the NDP. It is crucial to keep this alliance strong and for the public to see the Liberals and NDP working together for Canadians