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McKenna offering $2B in low carbon project funding to most, not all, provinces

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by The Canadian Press

OTTAWA - Eight provinces and all three territories will share $2 billion in federal funds to help them cut their greenhouse gas emissions over the next five years.
McKenna offering $2B in low carbon project funding to most, not all, provinces

Environment Minister Catherine McKenna has scheduled a news conference Thursday in Ottawa, where she will finally unveil details of how the Liberal government's promised Low Carbon Economy Fund will work.

Manitoba and Saskatchewan, neither of which has signed the Pan Canadian Framework on Clean Growth and Climate Change, will not be eligible for any of the money.

The fund was first created in the 2016 federal budget to help provinces fund initiatives which significantly cut greenhouse gases as Canada races to meet its targets under the Paris climate change accord.

Canada must cut almost 200 million tonnes of emissions by 2030 to meet its target of reducing greenhouse gases to 30 per cent below 2005 levels. That's the equivalent of taking more than twice as many cars off Canada's roads as are even in the country.

The fund was initially to be a two-year program, with the $2 billion equally divided between 2017-18 and 2018-19, until it became clear early in the negotiations that the provinces and territories needed more time to find the best uses for the money.

The money was reprofiled over five years in this year's budget, starting with $250 million in 2017-18. There will be $500 million available in each of the next three years and the final $250 million in 2021-22.

The funds will be allocated for projects that significantly reduce emissions, prioritizing those that reduce the most emissions most cheaply. Initiatives must also be in addition to existing projects or those that are already planned.

A spokeswoman for McKenna told The Canadian Press recently the fund would only be available to "support serious action on climate change for those who have committed to the Pan Canadian Framework."

Thus far, the promise of a piece of the $2-billion pie has not been enough to lure either Saskatchewan or Manitoba to sign the framework.

Saskatchewan Premier Brad Wall is adamant he will never sign the framework as long as it requires him to introduce a price on carbon. He is threatening to sue Ottawa if it tries to impose a carbon tax on the province.

As part of the framework, Ottawa requires every province to implement a minimum $10 per tonne price on carbon by the spring of 2018, or Ottawa will do it for them. The price has to rise by $10 per tonne per year until it hits $50 per tonne by 2022.

Ottawa pledges any revenue raised by a carbon tax directly will stay within the province it came from, although only those with their own carbon price program will get to decide how to spend it.

The federal government will decide how to allocate the money raised by carbon taxes it imposes, and is looking at giving at least some of it back in direct grants to individual families and small businesses.

Manitoba chose not to sign the framework in an attempt to leverage more money for health care. It is less opposed to a price on carbon, but reports say the province may prefer a federally imposed carbon tax to force Ottawa to wear the political fallout.

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