Category: 2025

Strengthening Canada’s public electric vehicle charging network

The Green Budget Coalition recommends that the Government of Canada continues to build on the public and private investments made to date in electric vehicle (EV) charging infrastructure, by funding NRCan’s Zero Emission Vehicle Infrastructure Program (ZEVIP) to ensure the department has the necessary resources to build out a consistent and predictable network of charging infrastructure across the country.

ZEVIP has proven to work well and is achieving its intended results. Canada’s Environment and Sustainable Development Commissioner’s recent audit report highlights ZEVIP’s success in increasing the availability of public charging infrastructure across Canada. ZEVIP’s model of leveraging substantial private sector investment to complement NRCan’s funding has been particularly effective, as highlighted in the Commissioner’s report.

The ZEVIP priority of building charging infrastructure in multi-unit residential buildings, as well as non-urban areas, including rural, remote and indigenous communities, must be maintained. The Government of Canada must do more to ensure that ZEVIP is funded and can continue to provide opportunities for partners to build more EV charging stations across the country. A comprehensive and accessible public charging network is vital if Canada is going to be successful in transitioning to a zero emission on-road vehicle fleet across our country. To date, there has been an impressive deployment of battery electric vehicles (BEV) and plug-in hybrid electric vehicles (PHEV) in Canada, with these two categories representing a record high of over 13% of new vehicle registrations in 2023.

The Government of Canada’s new regulations for the Electric Vehicle Availability Standard in December 2023 are a historic achievement which will continue the EV revolution by banning the sale of gasoline and diesel powered passenger vehicles. However, the success of the ZEV mandate regulation will be contingent on an adequate supply of reliable, convenient EV charging stations across Canada. A recent national report which surveyed the charging experience of Canadian EV owners indicates there is still much work to do. The 2023 survey concludes that despite successes to date in building new charging stations across the country, EV owners’ dissatisfaction with the availability of public chargers ranges from 60% in Quebec to as high as 80% in other parts of Canada.

The Green Budget Coalition is therefore recommending that Budget 2025 continues to fund NRCan’s Zero Emission Vehicle Infrastructure Program to enable the building of a comprehensive and reliable EV public charging network across the country.

Recommended Investment:

$325 million over three years [NRCan]

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Double public transit ridership by 2035

Canadian transportation sector emissions have not decreased at all since 2005, and in 2022 increased more than any other sector—including oil and gas. Canada is nearly 40% below the Organization for Economic Cooperation and Development (OECD) average for public transit utilization (ridership per capita) in urban areas with transit service. While Canada has zero-emissions vehicle (ZEV) adoption targets, Canada has no targets to increase public and active transportation use.

The most effective way of encouraging more people to use public transit is to ensure that service is convenient, frequent and reliable. But municipalities are not currently able to use federal transit funding to increase service levels. This hurts efforts to increase ridership and displace car travel, which is public transit’s most powerful method of reducing carbon emissions.

The Investing in Canada Infrastructure Program (ICIP), which included $23.5 billion in public transit investments, did not lead to the expected results for this very reason:

  • The public transit service level, measured in vehicle service kilometers per person, is now 7% lower than it was in 2016, the year that the federal government introduced it;
  • There were fewer buses in service in peak periods across Canada in 2022 than there were in 2013; and
  • An estimated 1,700 buses across Canada are sitting idle (as ‘excess spares’) when they could be in service if cities had additional operations funding.

A recent report shows that with immediate investment in the right policies, Canada can double public transit ridership by 2035 and reduce carbon emissions by 65 million tonnes. Achieving these outcomes requires expanding federal and provincial funding for public transit operations, implementing more public transit priority lanes, and establishing zero-emission bus procurement requirements. More specifically, doubling public transit ridership by 2035 requires an additional $3 billion per year on average up to 2035 for direct transit service improvements and bus fleet electrification, in addition to the existing commitment of $3 billion per year for major capital projects.

Recommendations [HICC]:

  • Ensure that funding is available from the Canada Public Transit Fund in the 2025- 2026 fiscal year, instead of waiting until 2026-2027; and
  • Expand the Canada Public Transit Fund to include support for public transit operations, by $3 billion per year until 2035.
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Marine shipping

The shipping industry is one of the world’s largest emitters of greenhouse gases (GHGs). If it were a country, it would be the world’s sixth-biggest climate polluter. Canada must take steps to address the climate impacts of marine shipping and to ensure the industry is held to account. In addition to GHG and black carbon emissions, polluting discharges, fuel spills, marine mammal strikes, and underwater noise from ships can severely impact critical habitat and Indigenous and community food security and health.

Total Recommended Investment: $135 million over five years

Accelerating zero-emission shipping:

  1. Zero-emission vessels: $20 million over two years for R&D and sea trials to meet the target of 100% zero-emission vessels in Canadian inland waters by 2030. [TC]
  2. GHG Emission Reduction Innovation Fund: $10 million over two years to provide advisory and capacity-building services to assist with vessel design, retrofit and testing for wind-assist, solar, electrification, autonomous technology and digitalization, and hull appendages. [TC, NRCan]
  3. Alternative fuels: $100 million over five years to ensure alternative fuels are available at Canadian ports to ensure full decarbonization of Canadian shipping before 2050. Consideration should only be given to alternative fuels that offer significant life-cycle GHG benefits on a well-to-wake basis, including land-use change emissions. Liquified natural gas, liquified petroleum gas, and other fossil fuels should be excluded. [TC, ECCC, HICC]
  4. Marine fuel carbon pricing: $5 million over two years to develop and implement a policy instrument to explicitly include domestic shipping in the Canadian carbon pricing system. [TC, ECCC, DFO]

Tools to generate revenue:

  • Vessel pollution control fund: Require the collection of fees from vessels and deposit such fees in the fund to apply in the innovation programs specified above. [TC]
  • Cruise tourism fee: Require the collection of a fee for every cruise passenger entering Canadian waters to fund an initiative, equivalent to the Indigenous Guardians Program or Alaska’s Ocean Ranger Program, to monitor and enforce compliance with federal requirements pertaining to ship discharges and speed, as well as regional recommendations. [TC]
  • Insurance fund: Establish a legally enforced insurance fund paid by the marine sector for public health and environmental impacts on local and Indigenous communities. This fund would ensure that there is proper compensation for those people amid any potential disruption or disaster. [TC]
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Windfall profits tax on oil and gas companies

Canadians are facing escalating costs of living and climate change impacts, while corporations in the fossil fuel sector are reporting record profits as they continue to feed into the climate crisis, due in part
to the surge in oil and gas prices following Russia’s invasion of Ukraine. These profits are therefore considered windfall profits, since they accrued to oil and gas companies without additional investments or expenditures.

Moreover, high fossil fuel prices play a leading role in the affordability crisis and have played a key role in driving recent inflation. Research shows that 25% of the inflation that accrued over the 2020-2022 period is attributable to oil and gas profits.

Despite profits of $33.7 billion in 2022 and over $25 billion in 2023,58 the largest Canadian oil and gas companies continue to increase their greenhouse gas emissions, which now represent nearly a third
of national emissions. They have failed to use these profits to invest in emissions reductions, instead returning profits to shareholders. At the same time, the Canadian government has provided billions of dollars in subsidies and public financing to the fossil fuel sector. Since 2016, Export Development Canada has provided more than $88 billion to the oil and gas sector.

In response to excessive profits in the fossil fuel sector, other countries, such as the United Kingdom (UK), have implemented a windfall profits tax on oil and gas companies. The UK collected over $1.7 billion in its first year and in 2023, the UK extended the tax to 2029 and increased the rate. However, the UK tax contains loopholes that Canada should not emulate. Many European Union countries have also implemented a windfall profits tax.

The Parliamentary Budget Officer has estimated that a 15% windfall profits tax on just seven of Canada’s oil and gas companies could generate $4.2 billion over five years that could quickly be invested in climate solutions.64 The House of Commons Finance Committee also recently recommended that an excess profits tax be implemented.

Canadians support making polluters pay their fair share. A March 2024 poll conducted by Leger reveals that the majority of Canadians support a tax on excess profits in the fossil fuel industry. Adopting a windfall profits tax is a fiscally responsible and socially equitable measure that will help mitigate the financial strain on Canadians and make polluters pay, while advancing climate action.

Recommendations [FIN]:

  1. Implement a windfall profits tax on the excess profits of oil and gas companies, aimed at raising at least $4.2 billion over five years.
  2. Allocate the revenue generated from the windfall profits tax towards initiatives aimed at alleviating the cost-of-living crisis and addressing the climate crisis.
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Advancing a zero-emissions electricity grid

Achieving a net-zero emissions electricity system by 2035 is a foundational climate solution that will unlock emissions reductions and affordable energy for other sectors. Budget 2024 saw progress on the Clean Electricity Investment Tax Credit (ITC), including the addition of inter-provincial transmission projects as an eligible category, but funding for the credit was not increased. The new Indigenous Loan Guarantee Program is also a good step, but more is needed to support Indigenous leadership in clean electricity.

Low-income and vulnerable people — including remote and Indigenous communities — must have affordable and equitable energy access as Canada transitions to a clean electricity grid. Siting of renewable installations on traditional Indigenous territories, and reducing reliance on diesel in Indigenous and remote communities, requires special care and attention.

Achieving net-zero electricity by 2035 and modernizing the grid will require strong collaboration among all orders of government, including Indigenous governments, as well as with utilities and system operators. Rapid market transformation necessitates immediate federal funding and clear policy signals for future support.

Demand-side management (DSM) is one of the key strategies that can help address both equity and affordability concerns. Enabling utilities to decrease demand instead of increasing generation gives them more options to operate and plan the grid while making electricity more affordable for consumers. It also makes it easier to integrate more low-cost renewable electricity and storage in the grid, further increasing affordability. It uses incentives or market mechanisms to assign monetary value to the benefits that energy efficiency, demand response, and distributed energy resources offer to utilities and grid operators. Companies and consumers often get paid for participating in DSM programs which adds to their savings.

Canada is a signatory to the International Energy Agency’s commitment to doubling the global average annual rate of energy efficiency improvements to over 4% by the end of this decade, but has the lowest annual energy efficiency improvements among G7 countries. The Canada Electricity Advisory Council also noted in their May 2024 “Powering Canada” report that Canada is lacking investment in DSM and initiatives for modernizing the grid.

The federal government could play a vital role in reducing energy demand and supporting clean electricity generation through the following investments in Budget 2025.

Total Recommended Investment: $32.57 billion over five years

  • Interprovincial transmission: $20 billion over five years for strategic interregional transmission projects to support clean electricity infrastructure deployment and system reliability and to top up the existing Investment Tax Credit (ITC), consistent with the Canada Electricity Advisory Council’s recommendations. The ITC should be conditional on securing the support and free, informed, and prior consent of Indigenous communities. [NRCan]
  • Strategic support for Indigenous-led and community-led generation: $4.8 billion over five years for investment in clean electricity projects and programs targeted to benefit Indigenous, low- income, and vulnerable communities, with a focus on providing communities the necessary resources to engage effectively in consultation processes. These federal investments should take the form of grants, not loans, wherever possible. [NRCan]
  • Indigenous leadership and partnerships: $800 million over five years for programs specifically aimed at building Indigenous leadership and partnerships for clean energy deployment in remote Indigenous communities. Funding programs should be flexible and support Indigenous-led projects that reduce diesel consumption in homes and buildings through deep energy retrofits and through renewable heat and power generation. [Lead: NRCan; Involved: CIRNAC, ISC, HICC]
  • $15 million over five years to enable the Smart Renewables and Electrification Pathways Program (SREP) and the Canada Infrastructure Bank to support projects in equity-deserving communities that will help build their capacity and increase access to the programs that would deliver social, environmental, and economic benefits. [NRCan, CIB]
  • $355 million over five years to support provinces that have made public commitments to work toward a net-zero grid by 2035 to create plans to achieve that goal. Planning should involve consultation with provincial stakeholders and in partnership with Indigenous governments, as well as broader engagement and collaboration with regional stakeholders, such as governments, communities, regulators, utilities, and system operators in neighbouring provinces and states. [NRCan]
  • $6.5 billion over five years allocated to DSM initiatives that reduce customer bills, enable efficient use of grid and generation resources, allow for increased use of distributed energy resources, and lead to incremental emissions reductions. [NRCan]
  • $100 million over five years for relaunching the Smart Grid Program for grid modernization, enhancing the resilience and efficiency of the power grid. Launched in 2021, the Smart Grid Program has enabled 21 grid modernization projects across the country. [NRCan]
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