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EXECUTIVE SUMMARY

Clean air, clean water, secure energy access, unique wildlife and world-famous parks are key elements that illustrate the fundamental importance of environmental sustainability to the prosperity and quality of life cherished by Canadians and admired and envied worldwide.

However, we can no longer take such ‘natural capital’ for granted. In recent decades, we have seen a rapid deterioration in the cleanliness of our air, mounting evidence of links between human illness and environmental pollution, greater uncertainty about climatic stability, and increasing threats to our remaining wild spaces and diversity of species.

Thankfully, Canadians have developed the intelligence, ingenuity, and practical ideas required to look ahead and implement homegrown strategies that will preserve our environment for generations to come, while simultaneously stimulating a more dynamic economy and healthier citizens. It is now time for Canada’s political leaders to draw upon such forethought, creativity and technology to craft an enduring integrated natural, economic, and social legacy for current and future generations of Canadians.

The Green Budget Coalition comprises 20 of Canada’s leading environmental and conservation organizations, which collectively represent over 500,000 Canadians, as members, supporters, and volunteers.

This document details five priority recommendations that the Green Budget Coalition believes to be the foremost budgetary and fiscal opportunities to advance environmental sustainability in Canada, while stimulating economic growth and protecting Canadians’ health. Four are strategic investments while one could avert hundreds of millions of dollars in tax losses.

1) Renewable Energy and Energy Efficiency: Commencing a Comprehensive Strategy
Accelerate growth in the renewable energy and energy efficiency sectors by implementing the following four fiscal strategies, as part of a comprehensive national strategy:

  1. Increased renewable energy production incentives,
  2. Additional transfers to provinces and municipalities for investments in energy efficiency and renewable energy.
  3. Continued support for buildings retrofit programs.
  4. Tax measures to support phasing out inefficient lighting by 2015.
    Such a strategy would steer Canada onto a sustainable energy path, generate economic opportunities, and protect our air, water, and climate.

2) The Mackenzie Valley, Northwest Territories: Supporting Healthy Ecosystems, Economies and Communities
Invest $25 million over five years, and then $4 mil lion annually, in a network of protected areas through the Northwest Territories Protected Areas Strategy, national parks proposals and regional land use plans. This must happen prior to approving any large-scale developments such as the proposed Mackenzie Gas Project, in order to support healthy ecosystems, communities, and economies in the Mackenzie Valley and surrounding regions of the Northwest Territories.

3) Species At Risk Act: Fulfilling its Mandate
Renew the Canadian government’s commitment to the Species At Risk Act (SARA), with a $275 million investment over five years, to permit, for the first time, the effective implementation of SARA’s mandate. A federally-funded independent evaluation of federal species at risk programs found that the Government has not sufficiently organized nor funded these programs in order to meet international commitments and legally-mandated deadlines. Federal reinvestment is required in order to credibly address the government’s responsibilities in this area.

4) Canadian Environmental Protection Act: Strengthening Implementation
Invest greater resources to implement the Canadian Environmental Protection Act (CEPA). CEPA is an important policy instrument that has been ineffectively implemented. Increasing exposure to toxic substances in our air and water is linked to serious threats to human health, especially for children. A toxics charge is a prime option simultaneously generate funding for CEPA implementation and deter the use, generation, and release of toxic substances.

5) Oil Sands: Leveling the Playing Field with Other Energy Sources
Advance a sustainable energy future for Canada by implementing a capital cost allowance (CCA) for oil sands that is consistent with conventional oil and natural gas (25%), in place of the expensive and unnecessary 100% Accelerated CCA that currently applies. Already, from 1995 to 2002, capital spending in the oil sands has increased by 1,649%, while oil sands production increased by 131%. Furthermore, over the last ten years, technical expertise related to the oil sands has improved, and oil prices have risen over 200%.

This document further outlines the following nine ongoing recommendations.

To protect Canada’s natural capital:

  • Restoring and Enhancing the Great Lakes and St. Lawrence Region
  • Advancing an Oceans Agenda for Canada
  • Preserving Canada’s Protected Areas
  • Extending Ecogift Tax Incentives to Inventory Lands
  • Conserving Our Migratory Birds

To advance a green economy through ecological fiscal reform:

  • Reducing Industry GHG Emissions with a Regulated Targets-and-Trading System
  • Drive Green: Company Car Tax Shift
  • Switch Green: Energy Star Appliance Feebate
  • Shifting Mining Incentives to Minerals Recycling

Looking beyond one-year budget cycles, the Green Budget Coalition strongly believes that Canada’s future prosperity requires forward-looking policies that integrate social and environmental values into market prices, and use market-based instruments that provide financial incentives to businesses and citizens to purchase goods and services with a more positive impact on environmental and human health. This approach is often called ecological fiscal reform (EFR). Levies should be gradually increased on activities that damage society, such as pollution and waste, and simultaneously reduced (or credited) on activities that benefit society, such as employment, savings, non-polluting economic activity, and the stewardship of private land. In this way, the prices of specific goods and services would better reflect the full environmental and social costs and benefits involved in their development, production, transportation, use, and subsequent disposal. This approach could be implemented through a mix of market-based instruments, such as taxes, fees, rebates, credits, and tradable permits, and implemented in a revenue-neutral manner.

Such policies reward environmental leaders amongst businesses and citizens, stimulate environmental innovations with global export potential, and expedite the development of economies where economic success brings concurrent environmental and human health benefits. Furthermore, such policies provide enhanced fairness to citizens and business through the “polluter pays principle”. Canada lags behind most other industrialized countries, including the United States and Australia, in utilizing market-based instruments.

We can only provide a healthy environment for our children through a careful mix of well-directed financial investments and strategic shifts in the fiscal incentives provided by prices throughout the economy.

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