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Budget 2016 (Part 2) Still to be determined: How big is the role of clean technology innovation in Keynesian economics given Canada's Paris Agreement commitments and ambition?
The Gandalf Group released survey results yesterday based on questions posed to C-Suite Executives in the days leading up to the federal budget.
The quarterly survey covered a range of hot topics for business leaders including confidence in prospects for the US and Canadian economy, investment in infrastructure, public budget deficits and the impact of declining commodity prices. Among these serious matters, the news was good for clean technology firms. Nearly three-quarters of business leader are in favour of public sector investment in clean technology as part of preparing the phase out from fossil fuels. There is no agreement nationally on the deadline for this phase out (e.g. 2050 versus 2100), but there is agreement on the need to invest in clean technology R&D as we get ready for this economic and environmental transition.
The 2016 Budget reflects the Federal Government's confidence in the support for investment in clean technology R&D as part of a demand-side economic blue print that replaces public budget deficit tracking with a variant gaining global support in the 21st century: managing the ratio of debt to GDP.
Within this demand-side approach, the Budget's focus for clean technology was focused on supply of innovation and demand for low carbon infrastructure.
For innovative clean technology firms there were a number of budget annoucements to consider:
- Water-focused municipal infrastructure: $1.5 billion
- Water-focused indigenous communities infrastructure: $700 million
- The Low Carbon Economy Fund: $2 billion over 2 years starting in 2017-2018
- Energy-focused cross-sectoral R&D Investments: $1 billion over 4 years starting in 2017-2018 with $50 million in 2016-2017 for investment in clean technology innovation including in the forestry, fisheries, mining, energy and agriculture sectors. Details forthcoming under the Innovation Agenda
- Air Pollution and climate change, protecting ecologically sensitive areas and restoring public trust in environmental assessment processes: $3.4 billion over five years
- Air Pollution: $345.3 million over five years starting in 2016-2017 for air quality management and to include Canadian clean technology
- Renewable Energy indigenous communities: $10.7 million over two years and starting in 2016-2017
- Energy Efficiency and Clean Energy policies and programs (products, buildings, industry and vehicles and a legislative framework for off-shore wind): $128.8 million over five years starting in 2016-2017
- Transportation: $62.5 million over two years starting in 2016-2017 for deployment of infrastructure for alternative transportation fuels
- Transportation: $56.9 million over two years starting in 2016-2017 for development of transportation regulations and standards to include participation in international emissions standards or aviation, marine and rail sectors
- Cleaner Oil & Gas: $50 million over two years starting in 2016-2017 for deployment of new solutions
- International Environmental Cooperation: $61.3 million over five years starting in 2016-2017 for participation in international standards forums
- All clean technology via Regional Economic Development Agencies: $100 million annually starting in 2016-2017, a doubling of current investment
For five years, through the Canadian Clean Technology Industry Report series, both firms and policy leaders have invested in a collective fact-base. Budget 2016 suggests that the presence of evidence has made a difference to the sector in terms of Canadian business leaders being willing to support clean technology R&D investment by the public sector.
It also suggests that there remains work to do to connect ready clean technology innovation with demand-side economic stimulus. The work still to do includes developing approaches to 21st century water and energy regulations, procurement practices and finance for both buyers and sellers of scaled up clean growth solutions.
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