March 26, 2007

Federal budget directs $4.5 billion to environmental initiatives

The 2007 federal budget, presented March 21 by Finance Minister Jim Flaherty, directs a total of $4.5 billion toward measures to improve air and water quality, reduce greenhouse gas (GHG) emissions and address climate change, and to protect Canada's natural environment. Combined with over $4.7 billion allocated in 2006, this brings Ottawa's environment-related investment to over $9 billion.

Recognizing Canada's position as an emerging energy superpower, the budget supports a number of initiatives intended to ensure that the country's energy resources are exploited in ways that will be both environmentally and economically sound. A highlight of this commitment is the proposed phase-out, by 2015, of the accelerated capital cost allowance for general investment in the oil sands.

The 2007 budget also includes a plan to provide over $1.5 billion through the Canada ecoTrust for clean air and climate change to support major environmental projects with provinces and territories, and a commitment to seek additional measures to promote promising new clean energy technologies such as carbon capture and storage.

Hand in hand with clean energy and energy efficiency investment are measures to promote cleaner transportation. Based on the acknowledgement that cleaner, more efficient fuels and vehicles will help reduce GHG emissions and air pollution, the 2007 budget allocates:

1) an additional $2 billion over seven years to support the production of renewable fuels, including:

*$1.5-billion incentive to support the production of renewable biofuels, such as ethanol and biodiesel.

*$500 million for Sustainable Development Technology Canada to invest with the private sector in establishing large-scale facilities for the production of next-generation renewable fuels.

2) a vehicle efficiency incentive structure that will include a new rebate of up to $2,000 for the purchase of a new fuel-efficient vehicle, and a green levy on new fuel-inefficient vehicles.

3) $36 million over the next two years for "scrappage" programs to retire older vehicles; and

4) extension of the public transit tax credit to innovative fare products such as electronic fare cards and weekly passes used on a continuing basis.

Finance Minister Flaherty, along with Environment Minister John Baird and Transport, Infrastructure and Communities Minister Lawrence Cannon, elaborated on the budget's green transportation initiatives during a tour of a Transport Canada facility where vehicles are tested under the recently announced ecoTechnology for Vehicles program.

The ecoAuto Rebate, a performance-based program, will offer up to $2,000 for the purchase or long-term lease of a new fuel-efficient vehicle. Conversely, a new "Green Levy" of $1,000 to a maximum $4,000 will be attached to gas-guzzling vehicles, i.e. new passenger vehicles (excluding trucks) with fuel-efficiency ratings of 13 or more litres per 100 kilometres.

The budget's $36 million in vehicle retirement activities will include $6 million over the next two years for a seven-fold increase in current annual federal government support for programs such as the Clean Air Foundation's Car Heaven program, plus $30 million over the next two years for incentives to be designed by Environment Canada and Transport Canada in consultation with stakeholders to remove older vehicles from Canadian roads.

The Automotive Recyclers of Canada association commended these funding announcements. "Providing the structure for a unified program available to all Canadians, along with incentives to encourage early retirement, will take programs like Car Heaven to the next level. As professional automotive recyclers, we are committed to supporting the initiative and ensuring the vehicles are retired in a responsible and efficient manner," said Steve Fletcher, the association's managing director.

A further measure, said Cannon, will respond to the needs of small communities and large cities by investing $33 billion in infrastructure, including public transit.

Canada has the third-largest supply of fresh water in the world. Recognizing the need to preserve and protect the quality of this water supply, the budget will fund a number of critical cleanups as part of a new National Water Strategy. These include:

*$12 million over two years to support the cleanup of southern Ontario's Lake Simcoe, whose water quality has been deteriorating due to excessive phosphorus levels;

*$11 million over two years to accelerate the cleanup of the Great Lakes and $7 million for the Lake Winnipeg basin;

*$19 million to advance the health of the oceans and support greater water pollution prevention, surveillance and enforcement along Canada's coasts;

*federal support for investments by provinces, territories and municipalities to improve water and wastewater infrastructure, including treatment facilities, sewage collection and water distribution;

*$39 million for fisheries science research programs to strengthen management and conservation; and

*$324 million over 10 years to the Canadian Coast Guard for six new large vessels to support its role in fisheries science and enforcement.

In a subsequent statement marking World Water Day, March 22, federal Environment Minister John Baird, Minister of the Environment, said the National Water Strategy, to which the 2007 budget has allocated a total of $93 million, sets the direction for a concrete action plan that will improve the quality of drinking water, clean up polluted waters, help maintain water levels in the Great Lakes and protect ecosystems. The federal government has also renewed its commitment to extend the co-operative work under the Canada-Ontario Agreement Respecting the Great Lakes Basin Ecosystem (COA-see following story). This initiative will ensure continued improvement and protection of the Great Lakes, their waters and their ecosystem.

The budget also builds on recent measures to help protect Canada's Natural Heritage, including the investment of over $250 million for initiatives such as the Natural Areas conservation program and the safeguarding of the Spirit Bear rainforest on British Columbia's central coast of British Columbia. New funding will provide:

*$10 million over two years to conserve ecologically significant lands in the Northwest Territories, which will protect an important part of Canada's boreal forest and advance work under an agreement aimed at permanently protecting a national historic site the size of Prince Edward Island;

*$110 million over two years for more effective implementation of the Species at Risk Act.

*$22 million over two years to improve the enforcement of environmental protection laws, including a 50% increase in the number of enforcement officers.

More federal budget information is available on-line at www.budget.gc.ca.

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