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Recommendations
for Budget 2005 Assessing the Sustainability of Federal Budget Measures Summary Investment
Benefits for Canadians
Background
and Rationale Recent budgets have included many green fiscal measures, including significant funding to implement the Kyoto Protocol, establish and protect National Parks, and clean up contaminated sites. However, budgets have also included other measures (e.g. extension of the Mineral Exploration Tax Credit for the mining industry, tax reduction for company cars) likely to have adverse environmental effects, yet which have been subject to no transparent or rigorous assessment of their sustainability. The
Green Budget Coalition notes that a 1999 Cabinet Directive issued by
the Privy Council Office provides that “Ministers expect that policy,
plan and program proposals of departments and agencies will consider,
when appropriate, potential environmental effects.” In our view,
the Cabinet Directive applies to the federal budget, usually the most
important federal policy in In 2004, the Commissioner of the Environment and Sustainable Development decried the failure of the Finance Department, in carrying out its pledge under the Sustainable Development Strategy, to give “greater consideration in its analysis to the environmental impacts of proposed tax measures.”41 Cabinet confidentiality and budget secrecy requirements represent a serious constraint on departments, including Finance, that seek to undertake strategic environmental assessments before decisions are made under the Cabinet Directive. Sharing of information on environmental effects of proposed policies or budget measures with the public is difficult if not contrary to important principles of Canadian governance. To circumvent this difficulty, the Green Budget Coalition proposes that the Department of Finance adopt an approach to strategic EAs modeled on that of Agriculture and Agrifood Canada with respect to crop insurance programs under the Farm Income Protection Act. Strategic EAs of these programs are done after the program is in place, with a view to learning what environmental harm has been caused, so that the next generation of crop insurance programs are more environmentally sustainable. Strategic EAs conducted following budget announcements do not run afoul of Cabinet or budget confidentiality issues, so information can be shared publicly. These after-the-fact strategic EAs recognize a crucial distinction between projects on the one hand, and policies, programs and plans on the other. An environmental assessment of a hydroelectric dam project must be completed before construction begins; once the project is constructed environmental damage is done, and reversing the project is typically impossible. Policies, programs and plans change frequently and are usually reversible, so that it is feasible to carry out strategic environmental assessments after the fact. Recommendation A strategic environmental assessment would then be carried out for certain fiscal measures, with public participation. It is likely that these strategic EAs would take one to two years to complete, depending on the complexity of the issues and availability of information. Once the reports are completed, information and recommendations to enhance, eliminate or continue the fiscal measure would be used to develop future budgets. Alternative
and Complementary Policies Contact
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