December 3, 2007

Environmental protection spending holds steady at $6.8 billion, says StatsCan

The dollar value of investments in environmental protection by Canadian industry remained virtually unchanged between 2002 and 2004, at a total of $6.8 billion. This followed a substantial increase in spending between 2000 and 2002, says Statistics Canada in its latest Environmental Protection Expenditures in the Business Sector report.

What did change, however, was the nature of the expenditures, with more investment directed toward pollution prevention (P2) and site reclamation and decommissioning projects and less spent on end-of-pipe pollution abatement and control projects.

Total capital expenditures and operating expenses also remained more or less the same for the two reporting periods, with the former totalling $2.9 billion between 2002 and 2004 (down 1%), the latter totalling $3.8 billion (up 0.1%).

P2 investments rose to 53% of all environmental capital expenditures in 2004, for a total of $1.5 billion, up from 50% in 2002. Pollution abatement capital spending declined from 32% to 25% as a proportion of total capital expenditure, for a total investment of $710 million. Companies across Canada directed a total of $345.5 million in capital spending toward site reclamation and decommissioning, the bulk of this expenditure ($234 million) occurring in Alberta.

The petroleum and coal industry sector continued to increase their capital spending, largely to upgrade refineries in order to meet new sulfur content regulations: the total investment in 2004 was $933 million, up 15% from the $811 million spent in 2002 (which was 35% over the 2000 figure). The largest investments were for P2 equipment ($779.5 million) and pollution abatement and control equipment ($93.1 million), says the report.

Canada's mining industry also increased its capital spending, directing $85.9 million toward pollution abatement and control equipment in 2004 (up from $49.6 million in 2002) and $51.8 million toward P2, an increase of $20.6 million from 2002. Site decommissioning activities and water treatment were the main focus of these capital expenditures.

StatsCan further notes that businesses spent $955 million in 2004 on technologies to reduce greenhouse gas (GHG) emissions, down from $1.1 billion in 2002. Operating expenditures in this area rose from $523 million to $575.8 million between 2002 and 2004, but this increase was more than offset by a 35% decline in capital investments in GHG reduction, from $583.3 million in 2002 to $379.3 million in 2004.

The oil and gas sector accounted for the largest proportion of GHG reduction capital spending of the 15 industry groups surveyed, reporting a total of $124.8 million in 2004. This, however, was down 46% from the total investment in 2002. Other leading sectors in GHG reduction expenditure were wood products ($45.9 million, up from $19.3 million in 2002) and electric power generation, transmission and distribution ($21.2 million, a sharp drop from the $98.8 million reported in 2002).

This sector reported a significant overall decline in environment-related capital spending, from $837.7 million in 2002 to $507.8 million in 2004. Although the electric power generation, transmission and distribution industry spent more on environmental assessments and audits ($96.3 million, up from $69.4 million), investment in most other areas was reduced, with the largest decline recorded for capital expenditures; the total dropped from $511.9 million in 2002 to $282.5 million in 2004. Much of the decline, says the report, was due to smaller investments in end-of-pipe and P2 capital projects.

The report (No 16F0006X) may be viewed on the StatsCan Web site, www.statcan.ca.

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