The Conservative Federal Government ended its modest support for renewable energy in January 2010, a decision that it justified by the need for a balanced budget. Yet the Government maintained much larger subsidies to the fossil fuel industry – which at the time was benefitting from the high price of oil.
We suspected that the real reason for this decision was that the Government was not interested in assisting the development of renewable energy in Canada. We commented on this lack of interest In our blog “Feds short change renewable energy”. These policies much reduced the chances of Canada meeting its 2020 GHG emission reduction targets.
The recent change of Government has swept away such negativism towards renewable energy. The new approach will help Canada get back on track to meet these targets.
We base that projection on this year’s Federal Budget presented to the House of Commons on March 22. In introducing the Budget, Finance Minister Bill Morneau declared his government’s intention to be a “champion of clean growth and a speedy transition to a low-carbon economy”. Morneau added that the Budget funding for new programs was “just a start”.
The Budget set aside $7 billion for infrastructure investment that will reduce GHG emissions and improve energy efficiency. In addition, the Budget established a $2-billion low-carbon economy fund. This fund “will reward provinces and territories that ‘materially reduce greenhouse gas emissions’ and achieve significant reductions under Canada’s current emissions target.” Over the next two years the Federal Government will review projects that reduce the most emissions “at the lowest cost per tonne.”
The possibility of Federal financial assistance was first discussed at the Federal-Provincial-Territorial meeting earlier this month. Some provinces claim that mitigation steps to which they are committed should be considered as contributing to a low carbon economy. Such as Saskatchewan’s claim for financial support for carbon capture and storage? Or Nova Scotia’s claim for assistance to convert from coal to hydro-electric power? We won’t know how these issues will resolve until the next Federal Provincial meeting on Setting a Price on Carbon to be held in the fall of this year.