2023 BUDGET: DUST ON CRUST

3 minute read

Last week, Finance Minister Chrystia Freeland released the 2023 Federal Budget, and when it comes to climate change, the news is good, with a couple of shortfalls and exceptions. Here’s our 3 minute summary (short enough to read on a chairlift).

The Dust

This budget has earmarked $28.2 billion for climate and clean economic measures, fully funding the emissions reduction plan. This is a big win, especially when a lot of commentators were expecting conservative spending. Just a few highlights include:

• $15 billion for the Canada Growth Fund, which will invest in low carbon industries and new technologies, with the aim of achieving emission reductions while boosting the economy;
• Investment tax credits of up to 30% for cleantech including battery storage solutions and clean hydrogen;
• Infrastructure investments to help establish a critical minerals supply chain here in Canada, so we know batteries are being made with fair and safe working conditions;
• $547.5 million for Transport Canada to launch an incentive program for the purchase of medium and heavy duty electric vehicles (that’s trucks and vans to you and me);
• $900 million to improve charging infrastructure in suburban and remote communities as well as urban and commercial charging stations;
• $850 million to increase clean electricity supply and modernise Canada’s grid.

The Crust

The budget leaves plenty of room for fossil fuel subsidies, including $2.6 billion over the next five years—and then $1.5 billion annually until 2030, for companies that invest in carbon capture, utilisation and storage (CCUS).

The government has been pegging its hopes on CCUS as an emissions reduction strategy for a long time. Unfortunately, the tech isn’t working, with most major facilities putting out more emissions than they capture. Moreover, most fossil fuel companies propose to use captured carbon to extract more oil, which isn’t exactly solving the problem and amounts to the government giving fossil fuel companies taxpayer money to continue to pollute. 

For a great breakdown on the science behind CCUS, check out this article from the Sierra Club. Or if you like your science with a healthy dose of F-bombs and humour, this Honest Government Ad sums things up nicely.

There’s also quite a bit of money going to clean hydrogen energy, another new technology area that has exciting promise, if it’s the right kind of hydrogen. Green hydrogen comes from renewables and could represent an excellent, emissions-free energy source once the tech has scaled and becomes affordable. So investment in this area is great, as long as it's paired with emissions reduction strategies that work right now, because there’s no time to lose.

Reading between the lines

Overall, this budget shows the government genuinely putting its money where its mouth is when it comes to the climate. It’s probably more blower pow than dust on crust, but we liked the catchy headline.

The passing of the massive Inflation Reduction Act in the US has very likely sped up real, meaningful funding for green infrastructure to prevent investments and jobs from being siphoned across the border. It was certainly no coincidence that Minister Freeland wore all green to announce the budget, while the PM wore a green tie. We think there was probably a snapchat to coordinate outfits.

Jokes aside, this budget is likely a first, strong step into climate investment for Canada. The fact that it’s been praised by economists and hard for opponents to find fault with suggests Minister Freeland has found a good middle ground between balancing the budget and investing in a climate-safe future. 

With luck, this should mean we can expect more climate-first budgets in the future. BUT, next year will be the last budget before the next Federal Election, when it can be tempting for governments to put money to popular but unhelpful boosts for taxpayers instead of making bold choices. 

At POW we’ll be keeping up the pressure. Research shows that the Feds should be allocating 2% of GDP over the next 6 years in order for Canada to achieve its climate commitments, and we’ve got some pretty good ideas for the next budget that we think will be great for outdoor recreation in Canada, great for the environment, and great for jobs. 

Our campaign launches next week, and we’re going to need all hands on deck to make sure the rubber hits the road and that climate spending stays on track.