OTTAWA — Environment leaders are warning the federal Liberals not to turn away from their plan to build the next federal budget around climate change, despite global economic uncertainty as the COVID-19 crisis deepens and oil prices plummet.
Catherine Abreu, executive director of the Climate Action Network Canada, was on Parliament Hill March 10 with representatives from other environment, social justice, and Indigenous organizations, hoping to convince the federal Liberals to hold firm on their plans.
“The fact that we’re facing a variety of uncertainties in the global market right now shouldn’t dissuade us from having a climate budget,” she said. “It should actually make us more encouraged that a climate budget is the way to go for Canada.”
But Goldy Hyder, the president of the Business Council of Canada, said the upcoming budget can’t focus solely on the environment when there are multiple economic threats from the spread of the novel coronavirus and the falling price of oil.
“The government wants to do a quote-unquote environmental crisis budget. You must be kidding me if that’s the next budget,” Hyder said in an interview. It better be an economic budget because we need to respond to the economic crisis people are feeling.“
Signals from both Prime Minister Justin Trudeau and Finance Minister Bill Morneau in the last week suggest their intention is very much to use the budget to fulfil the government’s promise to start transitioning to a cleaner, greener economy.
Morneau said the budget would both provide measures to respond to the economic impact of COVID-19, as well as focus on climate action. He said the government has the fiscal room to respond and that the federal budget is not the only way to help Canadians affected by the outbreak.
The Liberals campaigned on a promise to cut Canada’s greenhouse gas emissions to net zero by 2050, meaning whatever emissions are produced are absorbed rather than being left in the atmosphere. There is no plan yet to get there but among the specific promises to help were interest-free loans for home energy retrofits, and a “just transition” law to ensure workers in industries diminished by climate change can get retrained for jobs in a more sustainable economy.
But then came COVID-19, and the oil price decline, resulting from both a drop in global travel and a row between Saudi Arabia and Russia over how much oil should be produced.
Many Canadian oil projects, in particular open-pit oil sands mines, are not profitable when oil prices are so low.
That, said Abreu, is an opportunity for the environment and climate action to take centre stage in the upcoming budget, shifting government subsidies from oil production to the expansion of clean-energy solutions like energy efficiency construction. It is also a chance, she said, to invest in clean-up efforts, like those for orphan oil wells, which could create thousands of jobs for several years.
Toby Sanger, director of Canadians for Tax Fairness, said the budget “absolutely” needs to include stimulus spending but that the crisis presented by COVID-19 is also an opportunity.
“Our economy absolutely needs some stimulus spending in the coming budget,” he said. “It’s more important now than ever and we need that stimulus spending to make the transition to a low-carbon economy and to provide jobs and training to those who have lost their jobs as a result of the oil price decline and challenges in the oil and gas sector.”
But Hyder said he fears a government spending spree is not the right way to go. He urged Morneau to resist pressure from the provinces, various stakeholders and even fellow Liberal MPs to increase spending in his upcoming budget to deal with current crises.
“We want to back him up in being prudent and being measured in the response,” said Hyder.
“What no one knows is: where is this going? So, if you go out and you empty the bank, what do you do if it gets really bad? We have to be very careful here you don’t wake up and realize one day, ‘oh my God, we’ve completely lost control of the deficit and the debt.’ And, yes, there’s room, but it can go away very quickly depending on the magnitude of this crisis.”
— With files from Mike BlanchfieldNews from © Canadian Press Enterprises Inc. 2020