2021 federal budget focuses on clean technology for climate spending
Other climate initiatives include a 50 per cent 10-year reduction on corporate and small business income tax rates for companies manufacturing zero-emissions technologies.
Pushing the private sector to develop clean technology — and heavy emitters to adopt it — is where billions in new money will flow from the Liberals’ 2021 budget pledge unveiled on Apr. 19 to tackle climate change.
Around $17 billion is promised to be spent in the years ahead to promote a “green” recovery out of the COVID-19 pandemic and create jobs.
Included in that is $5 billion more into a fund meant to be spent on projects used by industry to reduce their greenhouse gas emissions.
The government says that will be spread out over seven years and is on top of the $3 billion announced when the Liberals unveiled their plan to reach net-zero emissions by 2050.
Sarah Petrevan, a policy director at Clean Energy Canada, says the total $8 billion will help heavy industries like steel and cement decarbonize and grow their competitiveness.
“Government’s role is to kind of set the stage for then private markets to develop and shift in the direction, and this is kind of what (Liberals) are doing,” she said of the budget.
Making the country a hub for clean technology is among the priorities Prime Minister Justin Trudeau has outlined in his approach to climate. The Liberals also want to adopt policies that make Canada go over and above its international commitment to reduce greenhouse gas emissions by 30 per cent below 2005 levels by 2030.
“I don’t see a big ambitious program that will lead us to zero emissions with strict targets,” said Genevieve Tellier of the University of Ottawa, who focuses on budget policies and public finances.
She added a lot of the new climate spending comes in the form of grants, so it’s being left up to private businesses to come to government with ideas.
Other climate initiatives include a 50 per cent 10-year reduction on corporate and small business income tax rates for companies manufacturing zero-emissions technologies, such as solar panels and electric buses.
It will also establish the first federal green bond with an issuance target of $5 billion. The goal is to attract investors to finance ways to fight climate change, like through green infrastructure.
Getting more electric vehicles on the road is a priority for the Liberals under its net-zero emissions plan and the budget promises $56 million over five years to work with countries like the United States on bringing in standards for zero-emission vehicle charging and refuelling stations.
There’s also millions to fund research and decide on policy around how Canada’s mineral reserves can be used to support electric vehicle batteries and other net-zero technologies.