Budget 2021 is a healthy dose for the clean economy, but climate measures lack potency

Finance Minister Chrystia Freeland just announced $101.4 billion in new spending.  It’s a stimulus budget with measures to quell the impacts of the pandemic as well as investment in Canada’s longer-term recovery, including the transition to a green economy.

We applaud the government’s intentions to build back better, but with Canada’s emissions on the rise, including here in the GTHA, there is just not enough new climate investment in this budget to get Canada and its cities on-track to our existing targets, let alone a new one (a new 2030 target is expected to be announced shortly).

Here are TAF’s highlights for urban climate action:

Support for greening homes

The government re-announced $4.4 billion for interest-free loans of up to $40,000 to help homeowners complete deep home retrofits. This will be paired with previously announced funding for Energuide audits and up to $5,000 in grants.  Following December’s announcement that Climate Action Incentive Fund rebates will switch from annual to quarterly payments, these measures will help Canadians reduce their energy bills and increase household budgets with a focus on reducing emissions. That said, today’s announcement did not include any approaches to assist Canadians in actually undertaking these retrofits, and ensuring we reach and support those facing energy poverty.

Zero emission vehicle charging and infrastructure

$56.1 million is committed to a set of codes and standards for retail ZEV charging and fueling stations to ensure Canadians and fleet managers can more easily transition to electric vehicles. This important regulation would include accreditation and inspection frameworks needed to ensure the standards are adhered to at Canada’s vast network of charging and refueling stations.

Mobilizing private capital for low-carbon solutions

This budget also provides significant funding towards innovation in Canada’s clean tech industries, including their supply chains, such as green hydrogen, minerals and mining for EV charging and solar panels, and carbon capture technologies. Funding for the implementation of the Clean Fuel Standard will also help to boost Canada’s competitiveness in the emerging global ZEV market.

Working in the new green economy

Investing in the Canadian workforce is a crucial part of Canada’s path to net-zero, The commitment to modernize procurement as a means to create economic opportunity for marginalized and equity seeking groups, $960 million for training and re-skilling, and $30 billion national childcare plan to support workers with children, especially women, is commendable and aligned with our vision of a fairer, more inclusive economy.

Energy efficiency and deep retrofits are glaring omissions

There is no way to reach our near-term or net zero targets without retrofitting practically all of Canada’s homes and buildings.  That’s why the lack of mention of energy efficiency and deep retrofits for buildings beyond single-family homes is surprising.  A national agenda for deep retrofits in multi-family residential buildings will deliver huge carbon reductions and other important benefits including address housing availability and affordability, improved health outcomes for residents, green investment opportunities and job creation in cities and communities across Canada. Ditto for commercial buildings.  Existing financing programs, such as the $2 billion Canada Infrastructure Bank allocation, are a step in the right direction but they fall short. We need more funding for deep retrofits, including strategic funding to originate, aggregate, standardize, and coordinate retrofit projects to accelerate the market and meet the pace and scale needed to hit our climate targets.

No incentives for new green construction

To reduce carbon lock-in we need to ensure that new construction is near-zero. There is no mention in the budget of strategic incentives or financing for municipalities or developers to ensure new construction is near-zero construction.

The announcement that a “climate lens” will be applied to all federal decisions is one way to make sure these investments will be effective, but one wonders if the climate lens was wholly applied to this budget. Beyond target-setting, deep investment in and regulation to drive implementation is essential. The budget announced yesterday carries promise on many fronts but lacks the strategy and programming to chart a greener, low-carbon course for Canada’s cities.