Market News

 December 16, 2014
Canada feds leave $321-million unspent for green programs.

 The federal government failed to spend a total of $321-million Parliament approved for "environmentally responsible" programs last year---nearly one-third of the money that was available for that purpose---while spending more than the $438-million that had been set aside to fund programs that primarily supported the oil and gas sector through scientific research, market development and government advertising.

Details of a spending report Natural Resources Canada submitted to Parliament through Treasury Board show the department did not spend, or "lapsed" in government accounting terms, a total of $298.6-million on programs for renewable energy development, alternative transportation fuels, energy efficiency and technology innovation.

The lapses in spending on green programs or technologies that would ultimately serve to reduce greenhouse gas emissions included a further $1-million the department left unspent from $10.9-million that had been earmarked for a Climate Change Adaptation Program, and $21-million for innovation in forestry.

The $298.6-million in lapsed spending for renewable energy development, alternative transportation fuels, energy efficiency, and technology innovation was spread across a number of programs.

The department failed to spend almost all of the $22-million that had been allotted for a satellite earth observation program that the report says provides fundamental data on the "baseline condition of lands, water and vegetation in Canada" and focuses on "the oil-sands region as well as other oil/gas regions, including the North."

The department spent only $1.78-million on the program, titled "Earth Observations for Responsible Development of Natural Resources," and the document attributes the lapse in spending to the fact that the money was spent on another program that is responsible for gathering Earth and geographic data as part of preparedness for potential natural disasters and also to prevent legal or social turmoil in certain circumstances.

"Many socio-economic and environmental decisions, such as land-use, elections planning, emergency preparedness and response, transportation and real estate, would generate inconsistency, disputes or turmoil without authoritative geographic information," the report says in its description of the program that used the $20-million the department transferred from the program charged with developing an ecological baseline to measure environmental harm caused by resource extraction and development.

The lapse in spending on programs aimed at ensuring natural resource sectors and consumers are environmentally responsible included several large amounts in individual programs---including $39.6-million that was not spent in a program for radioactive waste management because of delays in a cleanup of waste from nuclear reactor uranium refining at Port Hope, Ont.

The report said another $113-million in planned spending on green programs lapsed because of a lack of demand for biodiesel production due to "poor production economics and uncertainty around blending mandates and incentive programs in the U.S.," said the Natural Resources Canada Performance Report that the government tabled in Parliament.

The department spent a total of $438,319,980 on programs that primarily support the oil and gas industry through research and marketing development, with support also for mining and forestry. The total was $41,618,530 more than the department had planned through its main estimates for the 2013-2014 fiscal year.

The department spent another $139,363,326 on programs that include research and development of strategies to respond to catastrophic oil spills, the legal survey and geographic program to respond to natural disasters and other turbulence, and $9.5 million on a Polar Continental Shelf Logistics project that promotes the exercise of Canadian sovereignty in the Arctic.

That program included eight Canadian sovereignty projects during which Natural Resources Canada provided the Department of National Defence with 5,390 person days of accommodation at a research centre in Nunavut.

Opposition MPs accused the government of giving priority to the natural resource sector---particularly the oil and gas industry and the oil sands---at the expense of spending more to develop alternative energy sources and reduction in greenhouse gas emissions from carbon-based fuels.

"It's a perfect demonstration of the modus operandi of this government," said NDP MP Megan Leslie (Halifax, N.S.). "They put all of their eggs into one basket, and it is the oil and gas sector basket."

"We're going to pay the price for it, in lots of ways," Ms. Leslie said. "I'm not just talking greenhouse emissions. Think about the fact that we have an economy built on one staple, one thing."

She said the Conservatives cut in areas that the government should have strengthened---particularly in light of the recent collapse in world petroleum prices.

"It's not that they've missed the boat, because they're doing this on purpose. This is intentional, so it's not about missing the boat. Is it irreversible? I don't think it's irreversible in the short term even. I've watched energy efficiency programs. We have an energy efficiency program in Nova Scotia, up and running, snap, like that," Ms. Leslie said.

Liberal MP John McKay (Scarborough-Guildwood, Ont.) said the report is evidence the government of Prime Minister Stephen Harper (Calgary Southwest, Alta.) has favoured Alberta's oil and gas industry at the expense of other sectors.

"We're not nearly dead last in climate change progress for nothing, we worked at it, and we worked at it by emphasizing the oil sands in preference to everything else," he said.

"So when we have this impending oil deflation, the price of oil deflation, all of our eggs are in that basket and because all of our eggs are in that one basket, we're just watching that basket sail down the river, and there is no plan B," Mr. McKay said.