Photo: Absence of environmental spending in federal budget may not be fatal

Many policy makers are under the impression that the environment is an expense, not an asset. (Credit: City of Edmonton via Flickr)

By Pierre Sadik

What successive federal governments haven't acknowledged is that we can't just "buy our way" to a cleaner environment, particularly not with taxpayer dollars.

Environmental spending was almost nonexistent in last month's federal budget. While many stakeholders were up in arms about the dearth of money, the day will come when near zero spending on the environment denotes a government that actually understands the relationship between Canada's economy and the environment.

As I've noted before, many policymakers are under the mistaken impression that the environment is an expense — when in fact it is the greatest asset Canada has.

The annual budget is the main vehicle for announcing new spending initiatives as well as revenue generating measures. Most often budget items pertaining to the environment come under the rubric of expenditures, when they should be treated as revenue raising opportunities as we draw down Canada's natural capital.

Recent federal budgets have relied too heavily on spending alone to try to solve Canada's environmental problems. For instance, on climate change the government allocated almost $1 billion in budget 2009 for carbon capture and storage after previous climate change allocations of over $2 billion in the last few budgets. It is telling that as the spending to combat climate change has continued to rise, Canada's greenhouse gas emissions have also continued to rise, essentially in lockstep.

The reason for this is fairly straightforward, federal governments have shown a marked reluctance to do anything beyond making spending commitments to address pollution and protect the environment. What successive federal governments haven't acknowledged is that we can't just "buy our way" to a cleaner environment, particularly not with taxpayer dollars.

But more fundamentally, governments have failed to use the budget to set our economic system right in a way that makes the economy work with the environment, not against it.

Governments need to use the full range of policy tools to do an effective job of protecting the environment and the health of Canadians. Canada places an inordinate reliance on subsidies and voluntary measures to try to do so; more than most other developed countries according to the OECD. There is entrenched at the federal level an unwillingness to make polluters pay for using our air and water. What appears to be lost on policymakers is that payment for use typically results in wise use.

Governments raise revenue by taxing labour, by taxing profit, and in some instances by collecting royalties for the extraction of natural resources. But instead of being taxed, many of Canada's most valuable assets are still being given away in a manner that, at base, is nothing less than a subsidy to polluters. The use of our atmosphere, our bodies of water, and Canada's ecosystems and the services they provide are being given away for a song. For instance, a recent report by the David Suzuki Foundation calculated that the Ontario greenbelt provides non-market ecosystem services values at $2.6 billion per year.

I realize change won't happen overnight, but this budget was overdue for the introduction of meaningful pollution charges and environmental pricing to help protect the environment.

There are, of course, a handful of exceptions where the environment still requires a modicum of budget spending. The creation and maintenance of new parks and protected areas will always require the allocation of some financial resources for the stewardship of areas that are off limits to development. Meanwhile other, ostensibly green, budget items like the EcoENERGY Renewable Power Program are actually job creation subsidies that serve, not so much to protect the environment, but to compete with other governments offering generous incentives to the private sector to locate the jobs of the future in their jurisdiction.

The federal government is long overdue to start recognizing that the environment is not an "expense", as some provinces, including Ontario, BC and Quebec, have started to do. Likewise, stakeholders need to gradually steer away from asking government to "pay" for the environment and, instead, focus on the implementation of long-term structural changes that will help bring the economy into line with the environment.

This column first appeared in The Hill Times.

April 20, 2010

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