Canadian Legislative Issues

Climate Change Seen As Pivotal Subject

Climate change was a central theme of last year’s federal election campaign, and the still-new government in Ottawa is planning large policy moves on the climate file in the coming years.

The first budget of the current government contained nearly $3 billion dollars in investments aimed at mitigating greenhouse gas (GHG) emissions and tackling the threat of a warming climate. Of note, the single largest budget item - $2 billion for a Low Carbon Economy Fund – won’t start to flow until fiscal 2017-2018, giving Ottawa another year to design how the money will be spent.

Far from being a prescriptive single national climate policy, the Fund will "support provincial and territorial actions that materially reduce greenhouse gas emissions", offering large financial incentives for provinces and territories to clean up their own acts on GHG emissions.

This could take many forms, and all potentially-impacted industries have to be ready for a potential onslaught of provincial-level climate targets that could indirectly or directly impact industry players. Tighter fuel economy regulations, zero-emissions mandates, or government-imposed sales floors for alternative-propulsion vehicles could all be on the table as provinces compete for funding under the federal program, and battle it out to show that they are the greenest of them all.

Though overall, transport represents a significant share of GHG emissions, the vast majority of them come not from new vehicles but older cars that have been on the road for years. Therefore any policy aimed at incentivizing consumers and industry to get old dirty vehicles off the roads would have a much more efficient and effective impact in terms of GHG emission reductions than policies aimed primarily or exclusively at the new vehicle market. As they compete for dollars in a new federal climate change fund, provinces should keep this in mind.