Electric Mobility Canada CEO Daniel Breton digs into this week’s federal budget and finds a lot to like in a document that successfully addresses the simultaneous economic and environmental crises Canadians face today
Considering the fact that the world is presently dealing with the COVID crisis and the climate crisis, Finance Minister Chrystia Freeland this week had to present a budget for 2021 that would address both these crises — no mean feat. But that is what she did, poising Canada for not only a strong post-COVID recovery, but also a secure future in a cleaner, greener environment. It must have been a hard week, not to mention year, for all branches of the government trying to craft this budget. But by and large, it’s been a successful one.
Budget 2021 proposes to provide $17.6 billion towards a green recovery to create jobs, build a clean economy, and fight and protect Canadians against climate change. It also proposes to provide $5 billion over seven years (cash basis), starting in 2021-22, to the Net Zero Accelerator.
And in addition to the budget, Prime Minister Justin Trudeau and United States President Joe Biden are participating today and tomorrow in a Climate Summit where both Canada and the U.S. will be announcing new, more aggressive GHG emission-reduction targets.
Regarding our specific field of work, the 2021 budget is of great interest to people whether or not they are directly interested or invested in electric mobility. Many of the budget announcements have been designed to help workers, private businesses and NGOs to get through the crisis and build a resilient recovery through clean technology and electric mobility. It’s a commitment to a better future for all Canadians.
Helping Canadian workers
Many Canadian workers are presently dealing with job loss, job insecurity or insufficient employment and are looking for a job in a new sector. That’s why we fully support the government in its will to help these young and not–so–young workers get through this crisis and find good quality jobs in the cleantech sector with:
- The wage subsidy;
- The Canada Recovery Hiring Program;
- $960 million over three years in the new Sectoral Workforce Solutions Program for sectors like health, clean energy, as well as construction;
- $55 million for Employment and Social Development Canada for a Community Workforce Development Program with one stream focused on priority areas, like de-carbonization and supporting a just transition for workers in transforming sectors like energy;
- $250 million over three years to help workers transition to new jobs to scale-up proven industry-led, third-party-delivered approaches to upskill and redeploy workers to meet the needs of growing industries;
- $708 million over five years through the Mitacs program for students that bring cutting-edge scientific and technical knowledge from universities and colleges to strengthen the innovation capabilities of industry.
Getting the Canadian workers up-skilled in order to meet the needs of a zero emission transportation world is of vital importance to a successful transition. In taking these positive steps towards providing good jobs with the right training the government is demonstrating an awareness of the need to future proof the national workforce.
Supporting the environment and the economy
To accelerate investment in the cleantech and zero-emissions space, the government is pledging to temporarily reduce by 50 per cent the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies. These include companies that are: manufacturers of wind turbines, solar panels, equipment used in hydroelectric facilities, geothermal energy systems, electric cars, buses, trucks and other vehicles, batteries and fuel cells for electric vehicles, green hydrogen, electric vehicle charging systems and certain energy storage equipment.
It will also enhance Canada’s supply of critical minerals needed for electric vehicle batteries and solar panels, along with other low-carbon technologies needed to reach net-zero, with a pair of investments. The first, $9.6 million over three years, starting in 2021-22, will be used to create a Critical Battery Minerals Centre of Excellence at Natural Resources Canada. The second, another $36.8 million over three years, starting in 2021-22, with $10.9 million in remaining amortization, will go to Natural Resources Canada for federal research and development to advance critical battery mineral processing and refining expertise.
In addition to these important announcements, the government will provide:
- $56.1 million over five years to Measurement Canada for establishing charging and fuelling for zero-emission vehicles standards
- $13 million per year, ongoing, to Measurement Canada to develop and implement a set of codes and standards for retail ZEV charging and fuelling stations in coordination with international partners such as the United States;
- $104.6 million over five years, starting in 2021-22, to Environment and Climate Change Canada to strengthen greenhouse gas emissions regulations for light- and heavy-duty vehicles and off-road residential equipment;
- $5 billion in the first Federal Green Bond;
- $67.2 million over seven years will be provided to implement and administer the Clean Fuel Standard;
- $1.5 billion over five years to support the production and use of clean fuels;
- $14.9 billion over eight years for the permanent Public Transit Fund; and
- $22.6 million over four years to Infrastructure Canada to conduct Canada’s first ever National Infrastructure Assessment.
The $5,000 federal rebate for EVs with a base manufacturer suggested retail price (MSRP) under $45,000 is still in effect, but a new “luxury tax” for cars over $100,000 will be added, which means that some models of EVs (and combustion vehicles), for personal use, will be more expensive.
Still a lot of work to do
Between 2005 and 2019, Canada’s GHG emissions decreased by a minuscule one per cent. Obviously this statistic throws into sharp relief the problem: Canada has a very steep mountain to climb to lower GHG emissions by another 20 to 30 per cent by 2030 — a mere eight and three-quarter years away.
Suffice to say, Canada really needs to embrace electric mobility for three key reasons:
- 25 per cent of GHG emissions come from transportation compared to 26 per cent from oil and gas;
- Canadian GHG emission volumes from transportation got closer to oil and gas GHG emissions in 2019 because while transportation GHG emissions increased by two megatonnes between 2018 and 2019 (to 186 megatonnes), oil and gas GHG emissions held at 191 megatonnes;
- By adopting the electrification of transportation, we can both decrease GHG emissions from transportation and GHG emissions from oil and gas, which are often used in transportation.
We expect more details on the different programs announced in the budget over the next few days during the Climate Summit and, perhaps, even more clarity over the next few months should there be an election. But one thing is certain: this budget is a very encouraging step towards the acceleration of the fight against climate change, the adoption of electric vehicles and the transition towards a greener economy.
Daniel Breton is President and CEO of Electric Mobility Canada (EMC), a national membership-based not-for-profit organization dedicated exclusively to the advancement of e-mobility.