Monday’s 2007 budget will be a watershed moment in demonstrating the credibility of the federal government’s commitment to a clean environment and a stable climate.
It seems likely that this budget will be draped in green. The important question is whether Finance Minister Jim Flaherty will make the wise choices.
A credible environmental budget must include the following commitments. If implemented together, they would help Canada make strategic progress in developing a cleaner, more efficient economy; in protecting Canadians’ health; in preserving healthy economies, communities and ecosystems in the North; in protecting species at risk; and in reducing wasted tax subsidies.
Canada’s fiscal policy must incorporate two fundamental elements to effectively advance a clean environment and address climate change. We must sufficiently fund smart environmental programs. We must also utilize fiscal incentives and disincentives to better align market prices with full environmental and social costs, so that environmentally friendly choices clearly save money, increase profits and provide a competitive advantage. Similarly, profitable and cost-conscious behaviour should serve to preserve and restore environmental health.
Canada cannot be a clean energy superpower without harmonizing its fiscal policy with its environmental objectives.
Maximizing energy efficiency and supporting a transition to renewable energy is the most effective way of cleaning Canada’s air, protecting the health of Canadians, and meeting our climate change responsibilities. Energy efficiency measures and renewable sources of energy reduce air emissions, have water and land-use benefits, improve energy security and local control, provide employment and economic opportunities in all parts of the country, and prepare business and consumers for the inevitable transition away from fossil fuels.
If Canada is serious about reducing greenhouse gas emissions, the 2007 budget needs to include significant new financing for a national energy efficiency action plan that would transform how each of us use power, heat and fuels. It should also include new funding support that would make renewable energy the primary energy source of the 21st century. The recently announced Eco-Energy and Eco-Trust programs do not even bring funding support for renewable energy and energy efficiency back to where it was before the 2005 election.
At the same time, we should be cutting subsidies to the oil and gas sector, and using these funds to support renewable energy and energy efficiency. The first step should be to eliminate the expensive and unnecessary accelerated capital cost allowance (ACCA) for the oil sands. This ACCA allows 100 per cent of capital costs to be written off in the year in which they are incurred, which facilitates a pace of development that is unsustainable, and wastes taxpayers’ money to the tune of $5 million to $40 million for every $1 billion invested.
To ensure a healthy harmony between economic activity, environmental protection and vibrant communities in the Mackenzie Valley, it is critical that Canada act now to invest in a network of protected areas through the Northwest Territories Protected Areas Strategy, national parks proposals and regional land-use plans, before approving any large-scale developments such as the proposed Mackenzie Gas Project. Northern communities themselves have identified 30 sites for environmental protection, working with industry, conservation groups and all levels of government.
Canada is also at a crossroads with respect to protecting species at risk. The Species at Risk Act (SARA) was passed in 2002 following an unprecedented level of collaboration between resource industry associations and environmental non-governmental organisations. Yet an independent, federally funded, evaluation of species at risk programs found that the government has not sufficiently organized or funded these programs in order to meet international commitments and legally mandated deadlines. A $275-million investment over five years would permit, for the first time, the effective implementation of SARA’s mandate, particularly in habitat protection.
Canadians need further protection from toxic substances in their air, water and food. The government made important progress regarding the protection of human health from toxic substances with its new chemicals management plan in December. However, there still needs to be an increase in annual funding of $300 million per year starting in 2009-2010, in order to effectively protect Canadians. An important complement to the chemicals management plan would be a toxics charge on persistent, bio-accumulative and toxic substances. While some substances can be banned immediately, it is important to provide a tangible financial disincentive to the use of other undesirable substances, to reduce their use and find alternatives.
We are at a critical juncture when both the public and the environment are demanding effective action. This cannot be achieved without good fiscal policy, astute financial allocations and strong regulation.
This article was written by Julie Gelfand, president of Nature Canada, Marlo Raynolds, executive director of Pembina Institute, and Dr. Rick Smith, executive director of Environmental Defence, on behalf of the Green Budget Coalition. The coalition comprises 20 of Canada’s leading environmental and conservation organizations, that collectively represent over 500,000 Canadians, and have been preparing and refining budget recommendations together since 1999.