Under the banner "Building a Strong the Middle Class", the Government of Canada delivered a budget that was firmly rooted in demand-side economics; based on the premise that investment will lead to greater confidence, which in turn will stimulate economic growth.
From a policy perspective, the 2017 Budget was presented under five themes:
- Skills, Innovation and Middle Class jobs
- Communities Built for Change
- A Strong Canada at Home and in the World
- Tax fairness for the Middle Class
- Equal Opportunity: Budget 2017's Gender Statement
Scaling up Clean Innovation
Following the $1 billion commitment to clean technology in the 2016 Budget, the 2017 Budget made a commitment of $2.37 billion over four years to Canada's clean technology industry.
Under Canada's Innovation Economy, clean technology presented as formal sector in Canada's innovative economy along with the Digital Economy and Agri-food.
Canada's clean technology leaders will have reason to be closely engaged with BDC and EDC.
BDC will take the lead on a new four year, $380 million clean technology equity fund and a new $570 million working capital fund. These funds are allocated on a cash basis over 4 years.
EDC will administer a $450 million project finance fund for high capital projects.
These three funds represent two thirds of the funding for the Canadian clean technology industry.
SDTC will receive $400 million over five years for the SD Tech Fund to continue its vital work.
NRCan will take the lead on two funds for Clean Technology in Natural Resources as well as Clean Energy & Transportation. These two funds for a total of $429 million over 4 years are closely aligned with investment in regulation.
The federal government will engage with provincial governments via Green Infrastructure Bilateral Agreements for which $1.6 billion is allocated over four years. There will also be Smart Cities Challenge with $42 million over 4 years and similar challenges for Diesel, both North and South of the 60th parallel.
In addition, clean technology firms should be aware of the $800 million fund for Improving Indigenous Communities and $160 million Arctic Energy Fund.
This budget proposes the following investments in markets through regulation and through infrastructure:
- Transport Canada will lead the development of regulations for a more energy efficient transportation sector including GHG regulations for marine, rail, aviation and vehicles. $56.9 million over four years has been allocated for this.
- Environment and Climate Change Canada will lead the development of Heavy-duty vehicle regulations with a $17.2 million budget over 4 years.
- Natural Resources Canada will lead the development of Industrial and Building Energy Efficiency regulations with a budget of $67.5 million.
These funds should enable demonstration of energy efficiency as well as work to establish stronger regulations.
International Markets, Data and Clean Growth Hub
Also proposed in the budget are three funds to enable Canadian clean technology firms to access international markets ($15 million), a clean technology data strategy ($14.5 million) and a clean growth hub ($12 million). All of these budgets will be spread over 4 years.
The clean growth hub will be established within the new Innovation Canada single-window service.
The Budget set out $950 million for superclusters to be developed on a competitive basis. Clean technology may be one of those sectors. Specific mention was made of the need to improve the participation of women in the sectors that are potential candidates for superclusters including manufacturing, agri-food, clean technology, digital technology, health/bio-sciences and clean resources as well as infrastructure and transportation.
The Budget was silent on any criteria for best available technology or GHG emissions criteria for Canada's Infrastructure Bank or the Green Infrastructure Fund. This will be an opportunity to ensure that Infrastructure Bank investments do not lead to stranded assets.
The budget proposed the first steps, albeit small steps to the phasing out of fossil fuel subsidies currently valued a $3 billion, half of which are within the scope of the federal government.