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30 Mar 2023
Canada's Budget Subsidizes Clean Energy Even as Work Remains to be Done
Canada has taken advantage of its immense hydroelectric potential, particularly in its two largest provinces, Ontario and Quebec. Hydroelectric plants now deliver 65% of Canada's electricity (compared to about 20% for the US). This performance helped push Canada into the world's Top 10 among 147 nations surveyed in the inaugural IDCA Smart Nations Digital Readiness Index (compared to 45th place for the US).
Th government's new budget also has $80 billion in estimated funding over several years to support clean-energy technologies. Even so, concerns have been raised by $10 billion in incentives in the government's new budget as a subsidy to fossil-fuel companies developing carbon-capture projects. A member of Canada's Senate, Rosa Galvez of Quebec, said that “rather than a handout to corporations with record profits, regulation could force the sector to fund their own emissions reductions according to the polluter pays principle.”
The budget document also expresses Canadian concern over the sheer scope of the Biden Administration's Inflation Reduction Act's more than $300 billion commitment to clean energy, fearing “the sheer scale of U.S. incentives will undermine Canada’s ability to attract (more clean-energy) investments” without swift action. If Canada does not keep pace, we will be left behind,” the document states.
Despite all of its progress, Canada's industrialized economy, use of cars and trucks, and cold-weather climate keeps it among the world’s Top 10 GHG producers, at more than 600 million tons annually, just behind Saudi Arabia and just ahead of Indonesia. Canada's heavy industrial base and heating requirements also produce almost 50% more emissions than the US in terms of ton of emissions per billion dollars of GDP. Per-person emissions in Canada are also slightly higher than in the US.
So there's much work to be done. Canada's overall EESG ranking, although brought down a bit by the GHG-related components of its Environment score, has a strong economy and the very strong social structures and government functionality it needs to be successful in continuing to address its carbon footprint.
Photo of Parliament building from Government of Canada.
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