Build the foundations of a dynamic sustainable economy

GPC 2015 platform background paper

The need for sustainability, energy efficiency, and secure energy supplies is changing the way we think about and do business.  The shift to a sustainable economy and increasing demand for environmentally friendly products and services creates new opportunities to build on our strengths and develop a wide array of new businesses and jobs. Small businesses and sole proprietorships in Canada represent 70% of private sector employment.  The Green Party supports a much larger focus on nurturing small business as an important way to strengthen a dynamic sustainable economy.

Whatever the economic sector, from manufacturing goods to delivering services, Canada needs economic diversification. We also need a national energy strategy and energy policies that serve both Canada’s economic prosperity and the planet’s goal of carbon neutrality by the end of the century, encouraging the development of cleaner energy sources, and rationalizing Canada’s fragmented electricity market. For a secure future, we need to think like a country, diversify our energy portfolio and maximize value added to production in Canada. Our solutions lie in renewable energy, clean technologies and energy productivity.

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The need for sustainability, energy efficiency, and secure energy supplies is changing the way we think about and do business.  The shift to a sustainable economy and increasing demand for environmentally friendly products and services create new opportunities to build on our strengths and develop a wide array of innovative businesses and jobs.

Promoting a robust economy requires a healthy environment to be sustainable. The two goals are complementary, not in conflict.  We must stop referring to the economy, energy and the environment as separate issues. They are intricately interrelated. Within the federal government, the Minister of Finance must be on a par with the Minister of the Environment, and they must always be jointly mandated to work in close collaboration with their counterparts with any portfolios involving the environment and sustainable living, notably those with Industry, Natural Resources, Energy, Forests, Fisheries, and Navigable Waters.

Small businesses and sole proprietorships in Canada represent 70% of private sector employment.  The Green Party supports a much larger focus on nurturing small business as an important way to strengthen a dynamic sustainable economy. This means doing more than implementing a significant reduction of the small business corporate tax rate to 9% by 2019.  The Green Party recommends establishing a mandatory review of all federal legislation to consider the potential impact on small business of any proposal in a bill or regulation that is designated by the Ministry of Industry.  This initiative was put forward in May 2015 as a private member’s bill entitled The Creation of Small Business Impact Assessment Act. 

Such a review and sensitivity on the part of the federal government are essential. Small business must have easy access to information, expertise and resources to comply with the increasing volume of environmental and related legislation introduced both here in Canada and by government authorities in our export markets.  The federal government is best positioned to provide mechanisms to help small businesses implement sound environmental management and therefore fully exploit the opportunities for increased efficiency, competitiveness and innovation.

The clean technology sector is a particular growth area for Canada’s economy and requires much more attention from the Minister of Industry. Employment in the clean technology sector now exceeds that of the aerospace and automobile manufacturing sectors. Clean technology comprises ten disparate areas and is certainly not confined to the production of renewable energy. These areas include bio-refinery products; power generation; energy infrastructure (smart grids); energy efficiency and green buildings; industrial processes and products; extractive processes and products; transportation; recycling, recovery and remediation; water and wastewater; and agriculture.

The potential expansion of the clean tech sector is very promising.  Key regions in Canada are planning the creation of green transportation and energy infrastructure corridors: there will be a massive reinvestment in public transit, pedestrian, cycle and car-sharing infrastructure. The international market for clean tech goods and services is also expanding rapidly and Canadian firms have to get better at increasing their market share. In fact, Canada’s global share of the clean tech goods and services market has actually been declining since 2008.

Countries like Germany, Mexico, China and South Korea provide their respective clean tech sectors with considerable support.  Canada’s clean tech exports are on a par with those of mining, wood, livestock and processed food. Among other things, the federal government should consider ways to help qualified clean technology companies with critical access to both debt and equity financing. In this connection, it is interesting to note that a lot of investment in Canada’s clean-tech expansion comes from outside Canada. Of the top five investors since 2009, only Manulife Financial Corporation is Canadian. Two were Japanese, and two were German.

There is an urgent need for substantial government support for basic unbiased scientific research, independent of industry, the kind that drives the leading edge of technological change in the clean-tech and other high-technology sectors. We need to facilitate increased access to early-stage financing for Canadian entrepreneurs to help good ideas and technology get off the drawing board and the lab bench and into the market, where they can help grow our sustainable economy and create employment. We must examine all the existing programs addressing the links between research and commercialization, and propose a more robust and coherent role for the federal government in facilitating access to financing, for both the seed stage and for capacity building, especially to support small green business start-ups. (The 2006 Expert Panel on Commercialization put forward many useful suggestions for these kinds of initiatives, such as recommending a business-led Commercialization Partnership Board be the lead advisory body to the Minister of Industry.)

Tourism is another growth sector but one that has been abandoned by the current Conservative government. In addition to dramatically cutting the budget of the Canadian Tourism Commission (CTC) to half of what it was in 2001, the current government removed the GST/HST rebate on purchases by foreign visitors and eliminated all funding for tourism promotion in the U.S., at least until conveniently it was time for another election. Under significant pressure from the Green Party, the Conservative Minister responsible for Tourism recently announced a small “reinvestment” in the CTC for promotion in the U.S. and further added that he would be asking each province to ante up $1.25 for every $1 Ottawa contributed.  This measure is too little too late.

The Green Party believes the federal government must take more action to boost the tourism sector which currently represents about 2% of Canada’s overall GDP and directly employs 594,500 people.  The U.S. remains by far the largest source of visitors, but the growth in the number of visitors from the U.K., China and Latin America is much faster and posted significant increases in March 2015 compared to March 2014.  The most rapidly developing sector of global tourism is ecotourism, something in which Canada can excel. We need a separate Department of Tourism to coordinate all aspects of tourism more effectively.  In this era of consumer-driven tourism and Trivago man performing critical content aggregator roles, the CTC must change its focus. It must establish itself as “knowledge-central” for all things related to tourism in Canada, and play the role as “part-advisor, part-investor, part-steward, and support consumers and industry partners through an advisory role in research, education and experience-building.”

Saving energy and getting off fossil fuels

A pragmatic approach to sustainable economic development would put at least as much emphasis on saving energy as on producing it. As Amory Lovins pointed out decades ago, “a barrel of oil saved is just as valuable as a barrel of oil discovered.” Efforts to increase energy conservation and efficiency cannot be centralized.  Already a growing number of energetic and innovative local entrepreneurs across Canada are pursuing the development and use of alternative energy sources. The federal government should help such endeavours by providing a clearinghouse to allow the vital sharing of information and skills; by funding mechanisms to expand our sustainable development technology infrastructure, such as Sustainable Development Technology Canada; and by assisting with adequate financing for start-up investments that broaden the pool of investors and lower the cost of capital. (It is an unfortunate but accurate fact that our private sector lags behind terribly in research and development of all kinds compared with our G7 counterparts.) The federal government should also set energy efficiency standards that will drive the necessary innovation that is definitely within our technological grasp.

We need to focus on obtaining more mobility, lighting, heating, and cooling from less energy and with less waste, especially as the world population rises by 2 billion to reach 9.6 billion by mid-century. The assumption still prevails that we have to consume more in order to grow, but the planet is telling us otherwise. We must reduce consumption and enhance efficiency. Direct incentives could be useful, for example, to encourage industry to invest in pollution abatement measures and to motivate consumers to reuse, recycle, and relinquish energy-wasting and polluting machines such as old cars, outboard motors, and lawnmowers.^[1] Life-cycle producer responsibility creates more profits and less waste.

Communities – whether cities, towns, or villages – should be seen as the major focus of smart energy usage and of significant efforts to achieve greater efficiency and increased conservation. Our cities use at least 50% of all energy in Canada; they must develop integrated energy systems involving on-site renewable energy, district energy, and combined heat and power. Other steps to urban sustainability would include massive investments in expanding public transit, rebuilding municipal infrastructure, and finally moving forward on developing high-speed rail links. Better regional and municipal planning is essential so that investments in energy and transportation infrastructure are consistent with curbing GHG emissions.

Canada urgently needs to reduce the energy wasted through inefficient infrastructure. We need a massive energy retrofit plan that employs skilled trades across the country.  Among other things, the Green Party supports a Home Energy Retrofit program with the goal of cutting building emissions 80% by 2040, and retrofitting 100% of all Canadian buildings to a high-level of energy efficiency by 2030. We must stop wasting money and energy, heating the outdoors in winter and cooling it in summer. Insulation, green roofs, LED lighting, high efficiency furnaces, and geo-thermal energy – all can make Canada more productive and less polluting.

The Green Party approach to Canadian energy policies is clear: reduce energy development that results in fossil fuel expansion and the acceleration of climate change, and expand energy development that allows us to lower GHG’s and mitigate climate change. The Green Party favours a climate change strategy and policies that rapidly reduce CO₂ emissions from our energy supply and our energy exports, including the implementation of a revenue-neutral Carbon Fee and Dividend [A serious climate change agenda]. Our goal is to maintain oil sands production at the current level of approximately 2 million barrels of bitumen a day, and eventually to transition off oil altogether; we strongly oppose the existing plan to triple production for export to 6 million barrels per day.

The Green Party is also firmly against the expanded use of pipelines, rail cars, and tanker traffic for the purpose of getting raw bitumen (dilbit) from the oil sands to export markets. The Green Party supports developing refinery capacity in Alberta with “refineries of tomorrow” that will produce some low carbon liquid fuels (biofuel-gasoline blends like E85, E50), electricity and hydrogen, through carbon capture and storage. Building pipelines to transport refined product is very different from using pipelines to move dilbit.  Unlike a dilbit spill, the spill of a refined product creates only short-term damage since the product volatizes very quickly. Pipelines to move refined product are maintained as cleaner and safer means for transporting low carbon liquid fuels.

The Green Party supports phasing out distorting tax subsidies to oil companies and other producers of energy.  All producers must factor in the environmental cost of resource extraction from the start. Another promising approach is the concept of cradle-to-grave sustainability.  This is an approach to managing and protecting Canada’s resources to ensure that regulations and legislation oversee the life, completion, and legacy of resource development and projects. By mandating that companies finance legacy projects up front (such as land reclamation after a lead-zinc mine or smelter operation winds up), Ottawa can enhance its role, in collaboration with industry, as a responsible steward of our land, seas and skies for future generations of Canadians.

Worthy of note is the growing movement towards expanding cradle-to-cradle design for industrial and consumer products that generates zero waste: when you wear out your pair of rubber boots, you return them to be melted down to make new ones. This is part of changing to a circular economy from our destructive linear economic system where we extract resources, make products, and then throw them away, generating waste and pollution at every stage: see David Boyd’s The Optimistic Environmentalist.

Just when we need constructive national leadership on sustainability and energy, scientific evidence has less currency than ever in Ottawa. The federal cabinet has given itself new arbitrary powers to overturn any future National Energy Board (NEB) ruling that blocks a resource development on environmental grounds. The government seems determined to focus on only one element of the broader picture: dilbit pipelines. (Dilbit is the 70-30 combination of diluents and bitumen – essentially naphtha with cancer-causing benzene and butane – that allows the heavy bitumen to flow through pipelines. Bizarrely, Enbridge plans to import the dangerous diluents from overseas and send them by twinned pipelines from Kitimat to Alberta to be mixed with bitumen and then sent back into the pipelines for export.) The Conservatives simply decreed that moving dilbit from northern Alberta through the Keystone pipeline to the U.S., through the Enbridge Northern Gateway or Kinder Morgan Transmountain pipeline expansion to Asian tankers, or through the Energy East pipeline to the east coast, to be vital to the nation’s future. In the meantime, environmentalists who raise concerns are characterized as enemies of the public interest.

To be blunt, the NEB has essentially become a pipeline approval agency.  We used to have independent environmental reviews, but not any longer. With no national policy guidance on either the environmental impacts of resource extraction or in terms of long-term energy goals, the NEB hearings have become a farce. This must change.

We can expect that the NEB will be unable to focus effectively on very real project-specific concerns: the likelihood of spills and what steps must be taken to reduce that potential harm, for example, as well as the concerns of the many First Nations whose lands would be crossed by Enbridge’s Northern Gateway pipeline. Indigenous Canadians may not have a veto, but the legal obligations of adequate “consultation, accommodation, [and] compensation” (upheld by the Supreme Court of Canada), may well, in the end, make construction uneconomical for the pipeline companies.

With the public debate about energy so focused on bitumen, we overlook the serious problems in our electricity systems. Canada has an inefficient and highly politicized electricity business. We need an enhanced east-west electrical grid so that energy produced in Quebec, Newfoundland and Labrador, British Columbia and northern Manitoba, where hydroelectric sources are plentiful, can supply other areas of the country. For example, there is a valuable opportunity for Ontario, shifting away from dirty coal-fired electrical generation, to purchase more hydro power from Quebec while subsidizing production of wind and solar power. Through reciprocal agreement, Quebec could purchase surplus wind and solar energy from Ontario. Similarly, Alberta would benefit from greater collaboration with British Columbia.

We also need to find alternatives to the extremely costly production of nuclear power. It is far more economical to integrate renewable energy sources such as wind power into a larger, more diversified energy grid, as Denmark has done so successfully. In the wake of the tragic Fukushima meltdown, Japan is now looking at geothermal energy to provide heat and hot water to local communities, as well as wind, solar, and tidal energy. The country is plotting a path to a more sustainable electrical grid based on local, diverse and renewable sources of energy.

The federal government cannot continue to muddle along without sound policies or strategies on sustainable economic development.  This is not good enough.  Time is running out.  We do not have to choose between pursuing economic prosperity and ensuring the preservation of our planet’s health. With coherent national leadership, we can and must do both wisely.