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02/03/2005 - The Goodale Budget of 2005 marks
a turning point for Canada: it launches the
country well on the road to competitiveness
within a sustainable economy. This budget
does more than inject $5.2 billion (including
3 billion in new, incremental funding) into
federal environmental policy. It sends a clear
message: in order for Canada to succeed in
this new industrial revolution – the sustainable
economy – our environmental and economic signals
must both point in the same direction: one
which moves us forward to a better quality
of life for our people, a more competitive
and prosperous economy, and enhanced protection
of our natural environment.
This is what I want to talk about today before
such a prestigious audience as the Toronto
Board of Trade, whose mission, since 1845,
has been to put Toronto and Canada “ahead
of the competition”. Well, my friends, it
is organizations like yours – that helped
Canada reach the forefront of competitiveness
during each industrial revolution, from the
development of the steam engine to the emergence
of the knowledge economy – that must now work
hard to help Canada succeed just as brilliantly
in the new sustainable economy.
We know the most profitable technologies
are also increasingly the least polluting
and the least wasteful of resources. We realize
that the intensive search for environment-friendly
production methods has given rise to a new
leading-edge entrepreneurship and a very dynamic
market. We cannot ignore that our very abundance
of natural riches has led us to tolerate too
much waste, compared to many other industralized
countries that compete with us. And we know
that our businesses must respond to increased
consumer demand for products that are healthy
and more respectful of nature.
We know all this. So let us act accordingly.
Let us discard the old mentality that sees
protection of the environment as a hindrance
to economic development. Let us firmly link
environment and economy. This is the message
of the Goodale budget, this is the vision
of our Prime Minister, the Right Honourable
Paul Martin, a vision shared not only by the
Cabinet but also by the entire Liberal caucus.
This osmosis between environment and economy
is also the philosophy that inspires our refined
plan to meet our Kyoto objectives, a plan
that updates the 2002 Climate Change Plan
and that the Government of Canada will soon
make public.
I would like to review some of the environmental
initiatives contained in the Goodale Budget
to illustrate how beneficial they will be
for our economy. I will start with the measures
that affect the environment in general, then
deal with those related to climate change.
I will conclude with some comments on one
innovation – the creation of a climate fund
that will help us achieve our Kyoto targets.
1. The environment and the economy
Since I am here in Toronto, I will start with
the Great Lakes. The Goodale Budget devotes
$40 million to improving the ecological integrity
of the Great Lakes ecosystem. This is, of
course, good news for the environment, but
let’s not forget that Canada’s very competitiveness
is linked to the quality of this great ecosystem,
which, from the Great Lakes to the Gulf of
St. Lawrence, includes 55 per cent of the
Canadian population, 16 of our 30 largest
cities, 75 per cent of our manufacturing industry
and 25 per cent of our agriculture. Think
about the economic consequences of the threats
to this ecosystem: possible out-of-basin water
diversions would reduce water availability
for industry and hydroelectric power generation;
decreasing water levels would affect the $6
billion marine transportation industry; bacterial
and chemical contamination threaten commercial
and recreational fishing.
In the same way, by investing $85 million
in a strategy to combat invasive alien species,
such as the sea lamprey, the zebra mussel
or the Asian longhorn beetle, the Goodale
Budget defends our economy as much as it defends
our natural environment. The cumulative cost
associated with 16 of these invasive species
is estimated to be between $13.3 to $34.5
billion per year, affecting private property,
forestry, fisheries, agriculture, wildlife
and industry.
The same reasoning applies to the $28 million
that the Goodale Budget devoted to the first
phase of the government’s Oceans Action Plan:
this is as necessary for the economy as it
is for the environment, as Canada’s oceans-related
industries contribute significantly to the
gross domestic product.
The Goodale budget allots $269 million in
additional, much-needed funds to our National
Parks. This is good news for the preservation
of our natural environment, and good news
for our economy. Parks Canada administers
$7 billion in national assets, ranging from
canal locks to buildings to exhibits to monuments.
Our National Parks are not only magnificent,
they also contribute $1.2 billion to Canada’s
GDP - the equivalent of 38,000 full time jobs
- and are an essential source of revenue for
our tourist industry, for many of our communities,
and for Canada’s aboriginal people.
As science is an obvious link between environmental
policy and economic policy, both our environment
and our economy will benefit from the $60
million that the Goodale budget has set aside
for geographic information, the $111 million
devoted to the development of a new generation
of remote radar sensing satellites, and the
$200 million allocated to the development
of a Sustainable Energy Science and Technology
Strategy.
Another significant measure in the Goodale
Budget is the transfer to municipalities of
$5 billion from the gas tax. This transfer
targets support for environmentally-sustainable
infrastructure projects such as public transit,
water and wastewater treatment, community
energy systems and the handling of solid waste.
This too, is good for the environment and
good for the economy. Added to the $300 million
the budget invested in the Green Municipal
Funds, this New Deal for cities and Communities
is itself a green plan that will raise our
quality of life and make our cities and communities
more attractive and competitive. In addition,
the strong emphasis on the development of
public transportation will contribute to reducing
our greenhouse gas emissions and help us reach
our Kyoto objectives.
2. Climate change and the economy
The Goodale Budget devotes $4 billion, of
which 2 billion is new money, to reducing
our greenhouse gas emissions. Here again,
I can demonstrate that this great environmental
endeavor is also a wonderful opportunity to
improve our economy.
I am convinced that the Kyoto Protocol, which
requires signatory developed countries to
reduce their greenhouse gas emissions, is
not only an ecological necessity aimed at
reducing changes in climate due to human activity.
Kyoto is an opportunity to transform – for
the better – our economy and our way of life.
In the search for the most practical ways
to reduce the emission of gases like methane
and CO2 we find an additional incentive to
make our economy less wasteful, more efficient,
and based increasingly on renewable energy
sources.
We have had a plan to meet our Kyoto objectives
since 2002. Prime Minister Martin committed
to Canadians in the two most recent Speeches
from the Throne that we would review this
plan carefully, refine it and implement it,
and he wants it to be made public very soon.
This improved plan will ask each of us to
do our share. It will assign targets to the
large companies that produce high levels of
emissions. But these targets will be realistic
and designed to generate greater energy efficiency.
The Government of Canada will also do its
share. Between now and 2012, the plan will
provide for the injection of billions of dollars
into sustainable development and economic
productivity.
I can guarantee that these climate change-related
investments will make the economy more resource-
efficient and productive, and that they will
help position Canadian companies to compete
in the emerging carbon-constrained global
economy. Through this improved plan, the Government
will stimulate investment in traditional and
new sources of energy and will support innovative
technologies to ensure the long-term competitiveness
of the Canadian economy. The plan will allow
us to meet our Kyoto targets in a way that
will lead to further and deeper results while
building a more prosperous economy. It will
position Canada as a world leader in energy
efficiency, renewable energy and the conservation
of nature.
The plan we have devised to reach our Kyoto
objectives will be beneficial for the Canadian
economy. The Goodale Budget is proof of this.
All the measures devoted to climate change
will benefit our economy.
Thanks to the Goodale Budget, Canadian households
will save money by reducing their energy consumption.
In fact, an additional $225 million will help
quadruple the number of households who take
advantage of the very popular Energuide for
Homes Retrofit Incentive Program. With the
new funding, it will reach 500,000 homes by
2010.
Thanks to the Goodale budget, the use of
clean, renewable energy will be encouraged:
as well as committing the funds necessary
to quadruple wind energy production, the budget
creates a new Renewable Power Production Incentive
to stimulate other sources of renewable energy
such as small hydro, biomass and landfill
gas. Do I even need to point out, here in
Toronto, how much events like the Blackout
of summer, 2003 underscore our interdependence
and the serious consequences of cascading
power outages for both the economy and the
security of our population? Through enhanced
incentives for renewable energy, the Government
is moving to support the diversification of
our power system.
Another important measure in the Goodale
Budget is the creation of a partnership fund
that is expected to grow to $2 or $3 billion
over the next few years. This fund is aimed
at helping the Government of Canada and the
provincial and territorial governments to
co-finance their common priorities with regards
to climate change. It is not hard to imagine
many projects with clear environmental and
economic benefits. I am sure that the Toronto
Board of Trade would be pleased if this fund
were to help create an east-west electricity
transmission grid that would ensure the safety
of electricity supply in Ontario.
While the Government will continue to rule
out the use of a carbon tax, the Goodale Budget
opens the door to the use of the tax system
to support the achievement of environmental
objectives. It begins with bold fiscal measures
that will allow entrepreneurs to amortize
more quickly their investments in energy efficiency
and renewable energy, such as cogeneration
plants, wind turbines or the capture of biogas
from landfill sites. Additionally, the Finance
Minister has committed to study how other
tax measures could simultaneously promote
both economic and environmental objectives.
I invite the Toronto Board of Trade to join
this discussion on a topic so fundamental
to our economic future; a discussion that
will be led by the National Round Table on
the Economy and the Environment.
But it seems to me that the Goodale Budget’s
greatest innovation is the creation of a new
kind of fund, with an initial contribution
of $1 billion. This will be a climate fund;
and from now on, this is what it will be called.
Acting as a sort of investment bank, it will
purchase reductions in greenhouse gas emissions
resulting from concrete projects. For Canadians,
opportunities will be available in all sectors
of the economy. Potential examples of who
could benefit from this fund include farmers
who adopt low-till practices; forestry companies
that engage in state-of-the-art forest management
practices;property developers who include
district heating and renewable energy elements
in their plans for new sub-divisions; businesses
that develop innovative ways to reduce emissions
through recycling and energy efficiency; municipalities
that capture landfill gas and use it to generate
electricity; or courier companies that retrofit
their fleets.
I am convinced that this new instrument of
transformation, the Climate Fund, will be
the distinguishing feature that marks the
greatest difference between our new approach
to fighting climate change and previous ones.
This market-based approach will be critical
to integrating climate change considerations
into the day-to-day decisions of Canada’s
citizens and businesses, and unleashing the
power of innovation for the good of our environment
and our economy.
For that reason, I am convinced that we will
be in a position to meet most of our Kyoto
target through emission reductions achieved
here in Canada. But it will also be in our
interest to act offshore, not only to serve
an environmental cause that knows no borders,
but also to expand our economic networks.
The Climate Fund will be able to purchase
international emission reduction credits tied
to specific projects in other countries, but
only when such projects truly reduce greenhouse
gas emissions. To qualify, a project will
have to have at least one of the following
characteristics: apply Canadian technology,
improve Canada’s international competitiveness
or otherwise advance our national interest.
Our businesses will benefit from this opportunity
to develop their expertise in the fields of
environmental technologies and services and
to deploy it around the world. They will seize
the opportunity to win new market shares in
emerging economies and economies in transition.
Conclusion
In one sentence, David Runnals, President
of the International Institute for Sustainable
Development, has summarized the gist of my
remarks today. Of Budget 2005, he said: “It
is not just a bunch of money for environmental
programs. There are lots of different incentives
to do good things that make the economy greener.”
(Toronto Star, 2-24-05).
I believe I have shown that the vision in
this budget is that of a Canada actively working
towards economic success based on a healthy
environment. In my view, the most significant
remark in Mr. Goodale’s Budget is this:
“Our great challenge – and our primary responsibility
– is to bring the same focus, the same determination,
and the same iron will to the protection and
enhancement of our environment as we devoted
to restoring the health of the nation’s finances.
Canadians do not want to mortgage their children`s
future, nor do they want a heavy environmental
debt to be the legacy of this generation to
the next.”
It’s quite something when, as Paul Martin’s
Finance Minister, you refer to the battle
we fought and won against the deficit. Yes,
Canada commits itself -- more than ever --
to the fight so that we can also bequeath
to our children a healthier environment and
a more prosperous economy. It will take more
than one budget to win this battle. It will
require a truly long-term effort.
The winners of the 2004 Nobel Prize for Economics,
Professors Edward Prescott and Finn Kydland,
have said : perseverance in the pursuit of
clear objectives is essential for an economic
policy to be successful. Let us all work to
reconcile our environment and our economy,
for ourselves, and for the greater well-being
of future generations.
Speaking notes for the Honourable Stephane
Dion, P.C., M.P. Minister of the Environment,
to Address the Toronto Board of Trade
Speech delivered by the
Hon. Stéphane Dion P.C., M.P., Minister
of the Environment
