Behind the headlines: cleantech and the federal budget
Updated: Apr 26, 2021
David Campbell, Director of NII's Bruce Power Centre for Next Generation Nuclear and Chad Richards, Director of the Clean Energy Frontier take us behind the headlines on cleantech and the federal budget.
On budget day
DC: You arrive at the room, have no idea what’s going to be in this budget. Your phone gets confiscated, all the internet access is blocked—it’s a very serious thing.
And then you’re handed this massive book with just a few hours to try and read it and be ready with all your takeaways to report back to your team. It’s really stressful but so exciting to be a part of.
CR: You’re trying as a staffer to cram everything that’s in these several hundred page-long documents into concise briefing notes to folks—and trying to figure out which initiative in that budget is going to connect with constituents the most.
So it’s really interesting—budget days are a crazy day for staffers and stakeholders alike.
Budget by the numbers
Budgets are a reflection of the government’s priorities, they reflect the issues of the day. So we wanted to take a look at some keywords through history. We examined the 2011 budget, the 2019 budget and then this budget for how often certain words are mentioned.
And again, it’s that really clear indicator of what the government’s talking about, what their priorities are.
2021 budget mentions: CLIMATE CHANGE
So when we looked at climate change, in 2011 it was mentioned a grand total of 12 times. Then you move on to 2019 and you get up to 41—and now in this budget, in 2021, we’ve got 114 references to climate change.
Now some of that, there’s now a Ministry of Environment and Climate Change, but when you piece all that out, it still is a drastic increase from 2011 to 2019 to 2021.
2021 budget mentions: NET ZERO
Taking a look at net zero, you’ve got a grand old zero in 2011, another zero in 2019 and all the way up to 20 references in the 2021 budget.
2021 budget mentions: CARBON
Moving on to carbon, you’ve got zero references in 2011, in 2019 we’ve got thirty three references—mostly talking about carbon pollution and a low-carbon economy—and then in this budget, a massive increase to 85 times.
So I think it’s a really clear indicator of where the government is moving on some of these climate change initiatives, the whole concept of net zero and getting to net zero by 2050—and also eliminating or phasing out the use of carbon-emitting sources.
2021 budget mentions: HYDROGEN
We did the same thing looking at some words around next-generation technologies, so hydrogen was one. In 2011, zero mentions of hydrogen; 2019, four—all in the context of hydrogen fuel cell vehicles.
This time around, there’s 40, in reference to a whole bunch of different programs: as fuels, as part of batteries, as part of electricity in industry. So another reflection that hydrogen has really taken off in the minds of government.
2021 budget mentions: NUCLEAR & SMRs
We also looked at nuclear and small modular reactors—neither has really appeared in any of the three budgets we looked at.
And that really prompted us to take a closer look at the types of initiatives announced in this budget—and most of them are pretty technology agnostic. So they focus on things like net-zero technologies, or on clean technologies.
It’s one thing to announce the program, but it’s when the details of the programs come out, the eligibility criteria—all of these things that are going to be rolled out in the coming weeks and months.
That’s going to be really important to telling us what kind of role can nuclear play in this clean-energy transition the government’s telling us about.
What’s so big about this budget?
DC: This is Canada’s first budget in two years. It’s also Minister Freeland’s first budget, as the Minister of Finance—by the way, the first-ever budget from a female minister.
It’s also setting out the government’s vision for the future and particularly right now, when we’re pre-election, this really sets out the Liberals’ platform for the next campaign.
So Chad, I know there was a lot of noise heading into this budget—did it deliver what you expected? What kind of things were you hearing going into it?
CR: Ya, that’s exactly it, David—it’s their first budget in two years, like you said; it’s probably their last budget before the next election, so do some of these measures become campaign platform planks?
And I think going into this budget, a lot of stakeholders were really expecting a heavy focus on cleantech—there’s been a lot of talk about a clean energy transition or building back greener and I think that there are some elements there in this budget.
What are your big takeaways from reviewing the budget?
DC: I think a couple months ago there was a lot of hope that this year’s budget would be a green budget, really focused entirely on a green recovery and on the next economy that Canada’s going to have.
But the third wave has really kind of derailed any opportunity for that. The focus in the budget—or at least the narrative in the media and in the Minister’s speech—really on pandemic response and recovery.
But for all that those things have been driving the narrative so far, buried in the budget there is a lot to be excited about in the cleantech front.
There’s a whole bunch of announcements—just to highlight a couple:
the 50% reduction in income tax for businesses working in zero-emissions technologies;
there’s also $5 billion in new funding over seven years for the Net Zero Accelerator Fund, which is part of the Strategic Innovation Fund, or SIF, to support productions reducing GHG emissions
So these are really big investments—they’re really big movements. A lot of it is going to come down to what we see coming up in how the program gets designed and how that money gets rolled out; what fits in the definition of a “business working in net zero”, for example—we’ll have to see. But there’s a lot to be excited about there.
CR: So for me, I really wanted to put a shameless plug for the Clean Energy Frontier’s weekly blog #3ThoughtThursday—we’ve had some themes emerging on the blog around net zero; zero-emission vehicles, about agriculture innovation and the role agriculture can play in a net-zero future.
Building on those things, I thought it was really interesting in Minister Freeland’s speech when she was talking about net zero and really putting that front and centre and saying this is no longer a matter of debate.
Net zero is critical, it’s not a right vs. left thing anymore—we need to leave a healthier planet for future generations.
And when I think about zero-emissions vehicles, there’s surprisingly not as much as I’d thought, but there is one interesting piece in the budget which is a commitment of $56.1 million over five years to Measurement Canada to develop and implement and coordinate with international partners on codes and standards for zero-emissions vehicle charging stations and refueling stations.
Which I think will ease those concerns about charging infrastructure and how to refuel a zero-emission vehicle—and hopefully that will lead to an accelerated adoption of zero-emissions vehicles, which would be really great for a net-zero future.
What does this budget mean for next generation nuclear?
DC: Well, on the hydrogen front, there’s a lot of excitement here. Hydrogen, as we talked about, is mentioned a lot; there’s new funding available. Hydrogen technologies are clearly very much on the mind of this government.
When it comes to nuclear, and small modular reactors, and fusion, none of them get mentioned explicitly in this budget. But there’s lots of money that’s allocated for net zero funds and clean technology funds, so where that really leaves nuclear is that we’re going to have to compete.
We’re going to have to compete with all the other technologies that are also going to want a piece of that pie.
And I think that’s a good spot for nuclear to be in. We’re confident in the role that this technology needs to play on the path to net zero—but we’re going to have to go out there and prove it to the government.
What does this budget mean for the Clean Energy Frontier?
We’re looking at the critical role that Bruce, Grey and Huron will play in a net-zero future—and I think that this budget’s commitment to that net-zero future is absolutely critical.
When you look at what we have in the region with Bruce Power providing 30% of Ontario’s electricity in the form of emissions-free nuclear power, that’s a really huge opportunity for the region.
And we’re just continuing to build on that in Bruce, Grey and Huron—and I think that this recognition of net zero being the future we need is a prime opportunity.
What does this budget mean for ag and net zero?
When I think of agricultural solutions and different innovations in the ag space, you mentioned the SIF funding and that’s mentioned in the budget as agriculture being eligible for some of this funding.
The government has also announced the Agricultural Climate Solutions Program which is a $200 million investment over two years to launch immediate on-farm climate action through this program. So, there’s reference to topics like nitrogen management on-farm, adoption of cover cropping, rotational grazing and normalizing that process. So, I think this is a really prime opportunity for agriculture with that program.
So we want to take a little bit more of a deeper dive on some of that stuff and see if some of these movements in the agriculture space could capitalize on that and really drive towards a net-zero future.
Looking at the budget big picture
CR: So it’s not always dollars and cents when we’re looking at this budget: one thing we noticed was that the government’s emissions targets have changed.
When we’re looking at the 2030 emissions reductions targets, they’re looking at 36% below 2005 levels* as compared to the original promise of reductions of 30% below 2005. And it’s interesting timing: later this week, the US is bringing countries together to talk about emissions reductions efforts and climate change.
DC: Ya, and it’s definitely not an accident, right? Whenever we’re thinking about these climate programs, we’re tending to think of them just in the context of Canada.
But the reality is that we’re competing around the world for the money, the investment to come here, for the talented people—that pool can only go so many places.
So we’re in competition with these other nations, and also the government itself wants to look good when we’re going out and we’re talking to our allies around the world.
Canada is setting itself up well to go out and talk to the rest of the world about the climate activity happening here.
*Note to the reader: Since the publication of the budget, the Canadian government has announced yet further reductions, now targeting 45% by 2030.
--David Campbell is the Director of the Bruce Power Centre for Next Generation Nuclear and Chad Richards is the Director of the Clean Energy Frontier.