By Nia Williams
(Reuters) – Canada’s federal budget on Tuesday unveiled few emissions-cutting policies, but climate advocates say the key for Justin Trudeau’s Liberal government is to prioritize implementation of existing programs ahead of next year’s election that could see the Conservatives clinching power.
Canada, the world’s fourth-largest oil producer, has pledged to cut greenhouse gas emissions 40% to 45% below 2005 levels by 2030. Trudeau’s Liberals have announced a number of measures to hit that target, including an oil and gas emissions cap, methane regulations and investment tax credits in clean electricity and carbon capture and storage, but progress has been slow compared with other nations.
Opinion polls now suggest after nearly a decade in power the Liberals will be defeated in the next election by the opposition Conservative Party led by Pierre Poilievre, who has vowed to fight the oil and gas emissions cap and scrap a hugely unpopular carbon tax.
That would leave the Trudeau government at most 18 months to enact a number of key climate policies.
“The thing we most want is implementation,” said Dale Beugin, executive vice president of the Canadian Climate Institute. “It’s not like there’s a need for a bunch of new policies at this point, because the to-do list is still huge.”
Trudeau has staked his legacy on fighting emissions, yet some of his policies, including the signature carbon tax, have been opposed by many provinces. Poilievre is yet to outline a comprehensive climate plan, leaving some clean energy industry associations unsure of his party’s policy intentions.
“The biofuels sector needs to hear from the Conservatives where we fit in their climate action policies and economic development policies. We’re actively engaged with them now,” said Doug Hooper, director of policy and regulations at Advanced Biofuels Canada.
Fernando Melo, federal director of the Canadian Renewable Energy Association, said he was confident the Conservatives would be good partners for the renewable electricity industry, seen as key to helping Canada achieve its aim of a net-zero power grid by 2035.
TO-DO LIST
Tuesday’s budget included announcements on a new electric vehicle supply chain investment tax credit (ITC), more spending on biofuels and an Indigenous Loan Guarantee Program.
The government also said it would finalise legislation on other ITCs already announced, including for carbon capture and storage and clean electricity, by year-end.
Scott MacDougall, director of electricity at the Pembina Institute think tank, said time was ticking down towards 2030, irrespective of which party won the next election, and it would be good to see accelerated timelines for delivering the tax credits.
“ITCS are very important for Canada to meet its goals and crowd in the kind of private sector investment that we need, but they’re taking a long time,” he said.
Canada’s 2021 carbon emissions fell 8.4% from 2005 levels, the latest government data shows, while the U.S. cut emissions more than 15% over roughly the same period. Production from Canada’s oil and gas sector, the highest-polluting industry, is expected to rise in the coming years and the long-delayed Trans Mountain oil pipeline expansion project comes online next month.
Greenpeace energy strategist Keith Stewart said the government should focus on finalising legislation for the oil and gas emissions cap, methane regulations and a proposed 2035 electric vehicle mandate in the coming months.
According to the budget, other key measures such as a Canadian climate investment taxonomy and more deals on carbon contracts for differences, intended to backstop future carbon prices, are still being explored, he added.
“We need a sense of urgency for delivering these programs and not just promises,” Stewart said.
(Reporting by Nia Williams in British Columbia; additional reporting by Rod Nickel in Winnipeg; editing by Jonathan Oatis)
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