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Protection From Higher Fuel Prices Through
Energy Efficiency

Recommendations for Budget 2006

Recommendation Summary
Provide Canadians with enduring protection from higher fuel prices, and reduce Canada’s long-term energy dependence, by enhancing current programs for promoting and implementing energy efficiency and conservation in homes and small businesses, and by advancing green mobility.

Benefits for Canadians

  • Cushion the impacts of higher prices for gasoline, home heating oil and natural gas on Canadians and vulnerable small businesses, with a long-lasting solution.
  • Limit the additional cost to the economy posed by higher fossil fuel prices.
  • Create new employment opportunities for Canadians.
  • Achieve substantial reductions in greenhouse gas emissions in Canada.
  • Reduce other air pollutant emissions, and associated human health impacts and healthcare costs.

Background and Rationale
Recent dramatic increases in the price of gasoline, home heating oil and natural gas are already causing distress among low-income and fixed-income Canadians, as well as for small businesses that are high users of fossil fuels. Some have suggested that federal excise taxes on gasoline and diesel oil be reduced in order to cushion the impact of higher fuel prices. The Green Budget Coalition believes that comprehensive energy efficiency measures together with targeted support for renewable energy sources are better responses by the federal government to address this issue.

Implementing energy efficiency measures and renewable energy sources provide employment in all parts of the country in all sectors, they are the cornerstone for a low-carbon economy, and provide many other co-benefits such as energy security and reduced air and water pollution. It is time to adopt national strategies on energy efficiency and renewable energy that transform our energy using infrastructure and markets. The energy efficiency strategy should build on the successful programs being run by the Office of Energy Efficiency, and utilize new complementary financing instruments like the Partnership Fund and Offset System.

Recommendations
The Green Budget Coalition proposes ramped up federal programs to promote and implement energy efficiency and conservation in homes and small businesses, as well as a federal green mobility program as a means to reduce fuel costs.

National Energy Efficiency Strategy
The Green Budget Coalition recommends that the federal government commit sufficient resources to develop a national energy efficiency strategy involving all levels of government, building on the current work of the Council of Energy Ministers ADM Steering Committee on Energy Efficiency, and incorporating non-government stakeholders from all sectors.

National Energy Efficient Buildings Program
The Green Budget Coalition recognizes the important measures announced October 7, 2005 to establish an EnerGuide for Low-Income Households and financial grants program, and to expand existing residential retrofit programs. We also welcome the progress being made to coordinate federal, provincial and territorial buildings efficiency programs through the Energy Efficiency/Demand-Side Management Working Group and through discussions on a national buildings efficiency road map.

We recommend further measures as follows:

  • Implement the early action recommendations of the Assistant Deputy Ministers Steering Committee to update the model energy code for buildings, harmonize and collaborate on energy using equipment regulations, and establish energy efficiency programs in each province and territory for low income housing6 and outdoor lighting.
  • Enhance the capacity of Natural Resources Canada’s Office of Energy Efficiency to comprehensively update efficiency standards and codes for appliances, equipment, building components, and buildings and to strengthen integration with social marketing, taxation, and industrial innovation programs, within Natural Resources Canada and other departments.
  • Establish a national residential renovator energy efficiency certification program in cooperation with private sector and community-based stakeholders. Certified renovators would be eligible to carry out recommendations from EnerGuide for Houses audits and improvements carried out as part of a municipal financed energy efficiency program.

Green Mobility

  • Establish a 100,000 “Green Car” campaign providing $4,000 to consumers as well as a $500 incentive to dealers for the purchase of a low-emission vehicle (any car that emits less than 130 grams of GHG per km7). This performance-based rebate would be eliminated when Canada ’s regulations limiting greenhouse gas emissions from passenger vehicles come into effect in 2010. This measure would cost approximately $450 million over 5 years.
  • Apply the National Round Table on Environment and Economy’s recommended criteria (Environmental Quality in Canadian Cities: The Federal Role Recommendations 4 and 6) for investments in support of urban transit and sustainable infrastructure to all allocations of federal infrastructure funding, including the portion of federal fuel tax revenues committed in the February 2005 budget.
  • Amend the Income Tax Act to make employer-provided transit passes a non-taxable benefit. The federal government encourages the use of the private automobile by treating employer-provided parking spaces for employees as non-taxable benefit. However, employer-provided transit passes are treated as taxable benefits.

Alternative and Complementary Policies
The preceding energy efficiency and green mobility recommendations would be best financed through the phase-out of the $1.4 billion in annual tax expenditures to the oil and gas industry. The Green Budget Coalition believes that these government expenditures are not warranted to a sector experiencing record profits and that these financial resources can now be more effectively utilized to help drive the Canadian economy towards a sustainable energy future. (See Ongoing Recommendations, page 20, for more details.)

An important complement to these energy efficiency initiatives would be the establishment of a National Renewable Energy Expansion Program to guide and support a long-term expansion of Canada ’s renewable energy production. (See Ongoing Recommendations, page 19, for more details.)

Energy efficient buildings could be further supported by:

  • Establishing stable funding and national support for an innovative financing program for existing residential, commercial and institutional buildings, using tools such as local improvement charges and green mortgages. Use this program to work with provinces, territories and municipalities to increase the efficiency improvements in targeted buildings beyond the current 10 per cent level established in the 2002 Climate Change Plan for Canada.
  • Strengthening the delivery of EnerGuide for Houses by using community-based groups delivering rich educational programs on high efficiency equipment and renewable energy systems.

The Green Budget Coalition supports the maintenance of the current ten cents per litre gasoline fuel tax and the four cents per litre diesel fuel tax. Reductions in these fuel taxes would provide minimal benefits to consumers, and yet may stimulate demand for fossil fuels. Furthermore, any such tax reductions would reduce the funds currently being allocated to municipalities for important public transit and green infrastructure programs.

Car-sharing operations have the potential to provide car access to millions of Canadians without the capital and maintenance costs necessary for car ownership, and to continuously introduce low-emission vehicles into frequent circulation. The federal government should investigate options for expediting widespread access to car-sharing, with particular attention to guaranteeing their car loans, and providing promotional assistance.

Contacts:
Andrew Van Iterson, Green Budget Coalition
613-562-8208 ext. 243

Stephen Hazell, Sierra Club of Canada
613-241-4611

Marlo Raynolds, Pembina Institute
403-269-3344 ext. 113
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6. These low income programs would build on the measures announced by the federal government October 7, 2005. back to text

7. This emission level approximates the emissions from hybrid vehicles. back to text

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