The budget and our place in the world

Good Sunday Morning,

A federal budget is a complex document. Much of it is locked up in non-discretionary spending, maintaining services, programs and policies that have been entrenched over many decades. This year's 280 page budget is no different. It really is very much a political document, signalling the priorities of this government. Many considerations go into setting these priorities. They include the voting public's expectation to fulfill campaign promises, the changing global political and economic climate, the current and projected resilience of our Canadian economy, and the public's appetite for change. Some would argue that they also include the persuasive arguments of lobbyists, bureaucrats and consultants that make a full time living influencing government policies to suit their own agenda.

eonpp.jpg Since a budget is by it's very nature a forward looking document, it signals intent and so tells only part of the story. Sometimes programs are announced and moneys are allocated but funds are never actually spent. Budgets are a primary tool for governments to project their vision for the country and indicate the trajectory they would like us all to be on. That's why a budget vote is recognized very much as a confidence vote and in minority or coalition governments serves as the linchpin for parliament's approval of the government as a whole.

Even though Bill Morneau called it "an instrument of change," what this government presented was very much a Liberal vision; prepared to invest in Canada's future but not bold enough to act quickly or decisively on climate change. With feet planted firmly in the past and hopeful arms reaching out to the future, it's very easy to lose your balance and fall flat on your face. This budget didn't preempt the looming threat of draconian tax cuts south of the border. But it also didn't signal a bold defiance of the retrograde policies currently being hatched in the White House. Instead it promises a protracted delivery of programs leaving lots of wriggle room to 'adapt'.

The Liberal government has repeatedly pledged to discontinue fossil fuel subsidies. While not abandoning the promise, this budget kicked that commitment down the road some more. As Elizabeth points out "When you're trying to reduce greenhouse gas emissions you need to stop funding, with government funds - public funds, the companies that create greenhouse gas emissions, particularly in the oil-sands and in fracking for liquefied natural gas." Nevertheless it's great that Canadian cities are seeing infrastructure and mass transit prioritized and that Via Rail is receiving a major boost. We are also starting to see commitments to funding Climate Change adaptation where, as Elizabeth writes in her last Island Tides piece, we are already in uncharted territory.

In her weekly review from the Hill Elizabeth points out that "...we cannot measure Prime Minister Trudeau against years of inaction under the Harper administration... The commitments to funding toward protection of the Great Lakes Area and Lake Winnipeg are welcome, but still fall far short." As MP for Saanich-Gulf Islands, Elizabeth is of course delighted to see $80 million in funding for the the Centre for Plant Health, a research facility in North Saanich that she fought hard to keep open during budget cuts under the previous administration.

“Yet this budget misses other low-hanging fruit, like the renewal of the eco-energy retrofit grant, and rebates for electric and hybrid vehicles. These programs would empower Canadians to take individual action in the collective fight against climate change. We’re also seeing little movement on the administration’s plan to ‘phase-out’ fossil fuels, and we will maintain subsidies to the LNG industry through 2024. This budget needed to more aggressively target the elimination of the deficit by implementing simple revenue generating policies, such as a tax on sugary beverages. This tax would also go a long way toward improving the health of the Canadian population, and in particular children.”

As outlined in Vision Green, Elizabeth continues to champion the idea of balancing budgets through sources of revenue that incentivize responsible behaviour. It's important that government spending circulates through Canada's economy as much as possible. Flow through shares and CEO remuneration through stock options that are subject only to low capital gains taxes, sadly were not touched. Instead the Finance Minister removed the tax credit for transit passes while not offering any incentives for solar, wind or electric vehicle purchases.

This budget does not get us to the Paris Agreement numbers. "The Paris Agreement numbers require a full, all hands on deck moment where we decide we're serious about reducing greenhouse gasses," Elizabeth tells Don Martin in the foyer of the House of Commons. "One of the things that gives me hope, even in the face of Trump, is that the markets are already leaning in that direction. Smart money is moving away from fossil fuels and we need to be in the forefront of that."

solar_in_florida.jpgAn American ex-pat who currently serves on a Green EDA Executive in Vancouver sent me an email the other day which read in part: "The challenge is to convince the people who have always been able to rest their livelihood on extractive industries of the past -- and there are a lot of them in Canada. China and India do not have anywhere near the carbon infrastructure that we do in North America. They do not have the entrenched economic and political power of companies that have accrued enormous wealth from that 20th century model and who are using all that clout to try and hold on to what they've had.  As a result, China and India (and Africa, for that matter) have vastly less resistance to the new paradigm and they very likely will sail right past us if we, like the U.S., continue to dither around with the outmoded platforms. 

"Moving beyond fossil fuels will happen in any case, of course, because it's an unstoppable trend.  Sustainable energy technologies are going to improve efficiency and lower costs going forward in a manner very similar to Moore's Law.  Carbon technologies simply cannot and will not keep up, so they will -- in time -- fade away.  The question is how much time and money will Canada throw away by continuing to subsidize the old ways rather than taking the lead on the new?  And how far will we fall behind the countries that have no problem jumping into the future right now because they had so little stake in the past?"

While editing this I took a break to observe Earth Hour. We turned off all the lights and went for a walk around our neigbourhood, joining millions around the globe in this simple, symbolic act. The world is coming to grips with climate change and we have a choice to make as a nation. We can cower in the shadow of the elephant occupying the Oval Office or we can build alliances with the states and cities that refuse to be dragged back into the last century. There is a lot of push-back to the Trump agenda and a huge sector of the American economy is not prepared to circle the drain with Trump. They are on the move and looking for global partners that are determined to embrace a new future. The state of Georgia for example, has become the third-largest utility-scale solar installer with no government subsidies or tax incentives. "No political party can deny how much progress has been made on prices for wind and solar in the last few years."

Orcas02.jpgCarbon tycoons and pipeline companies in Calgary, on Bay Street or in Washington are not going to let a few Orcas struggling for survival in Haro Strait stand in their way. But as Dubai, Shanghai and Mumbai embrace a new solar economy they will be exposed as the laggards that they are.  According to the head of Dubai's Electricity and Water Authority which has just completed the $326 million second phase of the largest power plant in the region, "the state has begun early in preparing to say goodbye to the last drop of oil, through a clear strategy including investments in power generation plants that use various solar power technologies."

Germany, the powerhouse of the EU, is already a recognized leader in this field. Volkswagen recently launched Moia, a standalone company that will focus on mobility that goes beyond individual vehicle ownership. While at the same time there is increasing pressure in Germany to eliminate the super inefficient Internal Combustion Engine altogether. The simple fact that ICEs squander ~80% of the energy contained in the fuel by producing waste heat, leaves them vulnerable to the highly competitive efficiency of the electron. Even electric airplanes are being developed now.

We don't have to continue to threaten our environment and be a major contributor to greenhouse gas concentrations in our atmosphere. There are alternative opportunities and we can be one of the leading countries in the world to embrace them. Let's share these opportunities with our fellow citizens and remind our government that the future belongs to Canada.

Have a fantastic week and remember that there is a by-election underway were we stand a good chance of electing a second Green MP to champion our vision in parliament. You can help by visiting this web site or emailing support@greenparty.ca


Until next week,
Thomas


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