Recommendations for Budget 2005
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Executive Summary

The environment and the economy are inextricably linked. Decisions taken in either realm will inevitably have a lasting impact on both. With that in mind, the Green Budget Coalition offers four key budget proposals that are designed to enhance both Canada’s long-term economic competitiveness and to protect our environment.

Global events are moving quickly. The Kyoto Protocol is coming into effect and Canada will have to take meaningful steps to abide by its international treaty commitments in earnest. The Organization for Economic Cooperation and Development has, in a recent report, once again revealed that Canada is embarrassingly under-performing on the environment in comparison to other OECD countries.

Europe has an important head start — and thus an advantage — on Canada regarding greenhouse gas reductions and the handling of toxic chemicals such as polybrominated flame retardants. Even the United States, which has rejected Kyoto, has nonetheless taken far more effective steps than Canada in curtailing greenhouse gas emissions.

Once again, Canada finds itself in the role of environmental laggard. Now is the time to act. Other nations are taking creative steps to get on top of global environmental problems.

They are finding that the imperative of meeting environmental objectives also drives creativity, innovation and competitiveness.

While there is no substitute for regulations to backstop environmental protection measures, Canada must begin to embrace the greater use
of market-based instruments as well.

The true cost of using Canada’s natural resources is not reflected in what consumers are paying. The health costs, the quality of life costs and the costs in terms of competitiveness by failing to “consume wisely” leave Canada at an environmental and economic disadvantage.

Pollution Dividend
Now is the time to account for the real cost of conventional energy consumption by collecting a Pollution Dividend on fossil fuels — which can be used toward the health care sector and the development of 21st Century technology. This is the type of measure that countries such as Sweden already have in place.

Green Car Initiative
A Green Car initiative is more than just an environmental requirement, it’s an economic must if we are going to protect Canadian jobs. Canada’s auto industry is facing global competitors who are producing greener vehicles that meet strict international fuel efficiency standards. China, for example, has introduced new vehicle fuel efficiency standards that are stricter than Canada’s.

Toxic Substances Tax
Mounting exposure to toxic substances in our air and water is linked to serious threats to human health. Children, in particular, are most susceptible to illness and death from environmental contaminants. To meet the challenge of protecting Canadians, it is critical to take a co-ordinated, preventative approach to eliminating environmental contaminants that compromise human health. A Toxic Substances Tax on chemicals listed under the Canadian Environmental Protection Act is an effective way of protecting the health and quality of life of Canadians.

Oceans Action Plan
Canada’s vast coastlines and precious ecosystems are an integral part of our identity and a key part of our economy. For many of these areas, the opportunity to ensure their survival rests with our generation. Tomorrow will be too late.

This government must meet its Throne Speech commitment to move forward on its Oceans Action Plan by establishing a network of marine protected areas.

Other Recommendations

Transit Renewal and Sustainable Cities Strategy
Establish a National Public Transit Renewal Program by allocating an annual $1.5 billion fund from revenue generated from the excise tax on gasoline, and subject all urban infrastructure grants to strong criteria to ensure transit investments enhance human health and the environment.

Shifting Tax Incentives from Virgin Mineral Extraction to Recycling of Metals
The federal government should shift tax incentives from the extraction of virgin
minerals to measures favouring the recycling
and conservation of metals.

Assessing the Sustainability of Federal Budget Measures
Assess selected fiscal measures announced in the 2004 federal budget with a view to determining their environmental effects; and use this information in revising fiscal measures in future budgets.

National Green Power Strategy
Low-impact renewable energy is the fastest growing source of energy in the world. It has the technical potential to meet half of Canada’s electricity needs in the long-term. To catch up with other countries that are developing their green power resources and take advantage of tremendous international and domestic market opportunities, Canada should establish and implement a National Green Power Strategy.

National Energy Efficiency Strategy
The federal government should establish stable funding for the commercial and institutional retrofit program to realize the program objectives. Re-design the residential retrofit program as a permanent annual investment and strengthen delivery of the auditing portion by using community-based non-profits that deliver other educational programs. Enhance NRCan’s Office of Energy Efficiency capacity to update efficiency standards and codes for appliances, equipment, and buildings.

Shifting Subsidies from Fossil Fuel and Nuclear Power to Renewable Energy and Energy Efficiency
Phase out government subsidies and tax exemptions for fossil fuel and nuclear power and shift support to new incentives for the research and development of renewable energy and energy efficiency.

Building Capacity for Municipalities to Protect Water from Source to Tap
As part of the “New Deal” for cities and communities, the federal government should provide financial assistance to municipalities for building the capacity to develop and implement watershed based source water protection plans.

Removing the GST Pesticide Exemption
The government should remove the zero-rated GST status for all pesticides, and only permit agricultural pesticide users to claim the Input Tax Credit. It can then use the revenue generated from the GST on pesticides to create a national non-essential pesticide reduction program.

Clean Canada Fund
The government should create a federal/provincial program to assess and remediate high-risk toxic sites and relocate communities at risk. The long-term goal is to clean up all contaminated sites across Canada.

National Wildlife Areas
The federal government should invest in Canada’s network of National Wildlife Areas, with a focus on delivering on the Throne Speech commitments to a northern strategy and a Great Lakes/St. Lawrence Program. This proposal will result in 10 new National Wildlife Areas by 2006, an additional 11 NWAs by 2009, as well as provide the effective capacity to manage this protected areas network.

Realizing the Full Potential of the Ecological Gifts Program
The federal government should amend the Income Tax Act to:1) reduce the capital gains inclusion rate for taxable income on ecological gifts from 25 per cent to zero; and 2) recognize all donations of ecologically significant lands as ecological gifts, including the donation of lands held as inventory.

Biodiversity Conservation Data Network
The government should establish a national network of federal, provincial and non-government agencies and organizations that collectively constitute the Canadian Biodiversity Conservation Data Centre — an accessible, coordinated, distributed, electronic and spatial database on the species, habitats and ecological systems of conservation concern across Canada.

National Conservation Trust
The federal government should make a leadership investment of $250 million into a highly leveraged National Conservation Fund. This initial investment should be matched by all levels of governments, non-governmental organizations, community groups and others by a target of 3:1. The fund would support priority conservation initiatives on the ground on a project-by-project basis.

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