Category: Recommendations

Advancing sustainable jobs for a net-zero Canada

The global transition to zero-carbon energy systems is affecting workers across sectors—from oil and gas to manufacturing to agriculture. Canada has taken positive steps forward in advancing a just transition in the past year, including introducing the Sustainable Jobs Act; committing to establish a Sustainable Jobs Secretariat, Partnership Council, and Training Centre; attaching labour conditions to new investment tax credits; and producing an interim Sustainable Jobs Plan. It is essential that workers and communities are engaged in social dialogue about the inevitable transition away from fossil fuels, and that the creation of sustainable jobs aligns with Canada’s climate commitments. Actions must advance goals of reconciliation and equity to more fairly distribute the social and economic benefits of a clean economy.

This fiscal year and Budget 2024 will be crucial for building upon the foundation of this work and ramping up progress and investments informed by ongoing engagement and social dialogue. The scale of investment, and the coordination required, in planning and job creation, must match the scale of the energy transition, to save costs and prevent workers from being stranded. Investing in internal government coordination, data collection, skills training, worker supports and regional planning early on will result in a smoother transition with less disruption for workers and communities.

While there are many government supports for workers, additional programs and investments are needed to fill key gaps in current funding. The following recommendations include estimates of investment levels in key areas that would need to be refined through social dialogue with affected workers, employers, and direct government-to-government engagement with Indigenous communities. Special attention is needed to ensure that investments support people of colour, youth, women, migrant workers, and other groups facing workforce barriers in the move to low-carbon industries.

Total Recommended Investment: Approximately $12.2 billion over five years

Recommended Investments:

  1. Data collection, analysis and modelling to inform sustainable jobs planning: $30 million over five years is needed for regional data and modelling initiatives that define and classify technologies and jobs, assess transition impacts, provide industry outlooks, model regional labour trends based on specific projects, and predict labour force requirements needed for each key sector and region, with particular attention to rural and remote communities. This modelling and strategic planning are needed at the national level to inform regional and sectoral decision-making, and could be coordinated through the proposed Sustainable Jobs Secretariat. [NRCan, ESDC, StatCan, CCEI]
  2. Indigenous participation in sustainable jobs governance and self-determined planning: Create a transfer of at least $1 billion per year for five years with three distinctions-based streams to support Indigenous governments, organizations, and peoples involvement in sustainable jobs governance and planning, including via engagement with the Partnership Council and Secretariat. These funds could also support Indigenous-led community and regional planning in transition-affected areas. Specific budget requirements and funding allocation should be determined by Indigenous groups. [NRCan]
  3. Workforce development, training, and upskilling: Program creation and funding should be informed by regional and sectoral data and modelling, to ensure resources match the workers and industries in need.
    • Direct the next generation toward sustainable jobs: Support youth entering sustainable careers by establishing a $150 million tuition credit program over five years that helps address labour demands and avoid shortages in net-zero compatible industries, prioritizing members of under-represented and equity- deserving groups. (Program details to be identified by stakeholders.) [ESDC]
    • Support workers navigating pathways to sustainable jobs: Increase the $250 million previously allocated toward “investing in skills for the net-zero economy” with an additional $250 million over five years to total $500 million over five years across the Sustainable Jobs Training Centre and Sustainable Jobs Stream under the Union Training and Innovation Program. This additional funding should include support for non-unionized workers, career development, business, finance, retirement, and mental health supports. Services should be delivered by trusted community stakeholders through local centres, similar to those established in Alberta and Saskatchewan. [NRCan, RDAs]
  4. Regional planning and job-creating projects.
    • Resource regional planning and capital investment: Establish a new, regional coordination and funding delivery program, with an initial investment of $6.5 billion over five years. Building off the work of the Regional Energy and Resource Tables and net-zero industrial policy, this program would allocate funding for each province or region to invest in jobs-generating regional planning and major capital projects in transitioning regions. This fund should have climate and biodiversity conditions attached to ensure that job creation and industrial development are advancing Canada’s international commitments. (See also Climate and biodiversity conditions on federal spending, later in this document) [NRCan, RDAs]
    • Invest in community vitality: Provide $270 million over five years in dedicated funding to diversify the economies of ‘transition-affected’ communities and provide capacity support to implement new projects. Projects could include initiatives that bolster municipal services and enhance social security and wellbeing economies to address the ripple effects of the transition. This should include specific wrap-around supports for Indigenous communities, as well as translation services as needed. [NRCan, RDAs]
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Advancing a zero-emissions electricity grid based on renewables

Canada has committed to achieving a zero-emissions electricity system by 2035. Analyses by the IEA and UNFCCC have determined that this is required to be in-line with the goal of the Paris Agreement. It is a foundational climate solution that will unlock emissions reductions and affordable energy for other sectors. To reach this goal, the draft Clean Electricity Regulations must be strengthened and finalized without delay and paired with strategic investments in clean electricity infrastructure.

Budget 2023 saw unprecedented support for clean electricity infrastructure. This down-payment was crucial for kick-starting a transformation of Canada’s electricity system, but more funding is needed to insure affordable, secure, zero-emissions electricity for everyone in Canada by 2035 through significant investment in the generation, transmission and demand side of electricity. Strong collaboration between all levels of government, including Indigenous governments, utilities and system operators will be required. As electricity investments require years to move from planning to commissioning, funding must be made available now, with clear signals for future federal support. Only with bold and strategic investments and regulatory certainty will we be able to successfully and equitably decarbonize the electricity sector across Canada. The untapped potential in distributed energy resources is significant and distributed energy resources can create resilience, manage the cost of electricity, reduce energy poverty, provide local jobs and economic development, help save grid infrastructure costs, and unlock new community capital from citizens eager to participate in climate action.

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. With targeted renewable energy funds, there is significant opportunity to advance environmental and social equity while reducing emissions. The federal government can play a vital role in supporting clean electricity generation through the following investments in Budget 2024:

Total Recommended Investment: $25.97 billion over five years

Federal support for grid upgrades

1. Interprovincial transmission: $20 billion over five years for strategic interregional transmission projects to support clean electricity infrastructure deployment, system reliability, and to top up the existing Investment Tax Credit (ITC). As developing interties between key provinces has been difficult in the landscape of Canada’s current electricity system, the Green Budget Coalition recommends that these funds be made available in the form of a 50% ITC to develop key interprovincial interties, bringing demonstrable benefits to both ends of these new connections. Additionally, the ITC should be conditional on securing the support of Indigenous communities whose traditional territory or land right/ claims apply to the project in question. [NRCan]

2. 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. This could include, but not be limited to, renewables, energy storage, district energy, and grid reliability. These federal investments should take the form of grants, not loans, wherever possible. [NRCan]

3. Allocate up to an additional $800 million to 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, INFC]

4. $15 million over five years to enable specific Smart Renewables and Electrification Pathways (SREP) program and Canada Infrastructure Bank program streams to support project development in equity-deserving communities such as communities affected by environmental injustice or lower income communities to build their capacity and increase their access to the programs that would deliver social, environmental, and economic benefits. [NRCan, CIB]

The Green Budget Coalition is also recommending targeted funding for low-income households to access affordable clean energy. Please see A Renovation wave for climate resilient homes and affordable home energy, earlier in this document.

Collaboration, and best practices in clean electricity governance, market design, planning and deployment

5. $200 million over five years of additional funding be made available to provinces
who commit to making systematic improvements to their full electricity system. We applaud the requirement placed on access to the Clean Electricity ITC in Budget 2023 that federal funding be used to lower electricity bills and a commitment to achieving a net- zero electricity sector by 2035 in each province and territory. In developing the delivery mechanisms for the Clean Electricity ITC, how funding under the Clean Electricity Focus be delivered by the CIB and through the SREP, in addition to funding streams added in Budget 2024 we recommend that funding delivered be commensurate to provinces committing to making systematic improvements to their electricity systems. The federal government can facilitate follow through by making some of this funding available to support commissioning independent pathways assessments for decarbonisation of provincial electricity systems, consulting on and producing provincial energy plans, and improving the capacity and resources for regulators to mandate sustainability within utility regulations. [NRCan]

6. $150 million over five years to enhance strategic regional cooperation and provide additional research and planning capacity to support projects and analyses of interregional transmission to ensure reliability, efficiency and affordability for the grid of the future. This could include, but not be limited to, additional modeling, planning, procurement and market integration analysis. [NRCan]

7. $5 million to fund a consultative process with provinces, territories, municipalities, utilities, industry, NGOs, other regional partners and interested community members focused on least-cost pathways toward 100% clean electricity by 2035. [NRCan]

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A renovation wave for climate resilient homes and affordable home energy

Meeting Canada’s emission reductions, climate adaptation, and affordability targets requires a massive building upgrade process and the elimination of carbon emissions from Canadian homes and buildings before mid-century. Achieving this entails:

  1. Phasing out on-site combustion of fossil fuels;
  2. Upgrading building envelope and ventilation systems;
  3. Connecting to clean energy, mainly electricity from wind, solar, and hydro; and
  4. Accommodating the unique needs of Indigenous communities.

This would ensure all homes are able to reduce energy costs, improve indoor air quality, and protect occupants and housing infrastructure from extreme weather, air pollution and earthquakes.

The government has made significant progress on policies and programs that support building retrofits and decarbonization. However, large capital investment and regulations that align with net-zero emissions targets are still required. The Deep Retrofit Accelerator Initiative allocated $185 million and the Greener Neighbourhood Pilot Program (GNPP) allocated $33.5 million to programmatic supports for accelerating deep retrofits followed by a second GNPP call for applications for Energiesprong-inspired demonstration project capital support. The Oil to Heat Pump Affordability Program and the assistance available to provinces through the $250 million Low Carbon Economy Fund Home Heating Oil Transition have been effective, however many low-income energy users are left out of the program as it is currently designed. Canada Mortgage and Housing Corporation’s recent Greener Affordable Homes Program awards up to $170,000 per unit in multi-unit residential buildings for a deep retrofit that achieves at least 80% GHG reductions and aggressive energy reductions for affordable rental buildings, which sets the bar for zero-cost deep retrofits. This is the level of funding needed to ensure Canadians living with energy poverty can live in healthy, safe, affordable and resilient homes.

The National Adaptation Strategy has set a goal to eliminate heat-related deaths but lacks any targets or strategies for deep retrofitting homes to be able to meet this goal. While we are anticipating that the Canada Green Building Strategy (CGBS) will fill this gap and be a catalyst to dramatically increase the rate of deep retrofits, resulting in fuel switching and increased energy-efficiency across the country, it has yet to be adopted. Canadian policy- makers urgently need to adopt the CGBS and empower it with targeted regulation and capital funding designed to stimulate labour and industry growth, and market demand, while addressing the needs of Canadians living with energy poverty.

The Canadian Urban Sustainability Practitioners network defines energy poverty as the experience of households or communities that struggle to heat and cool their homes and power their lights and appliances. While experience of energy poverty varies regionally, approximately one in five Canadian households struggle to pay energy bills and make choices between paying utility bills and for necessities such as housing and food.

The Green Budget Coalition recommends that the federal government coordinate existing investments and programs across all departments and centrally deliver home upgrades to ensure impactful investments that integrate health, affordability, and adaptation targets, and accommodate the unique needs of Indigenous, northern and remote communities. We also recommend that the federal government leverage investments in low-income housing retrofits by working directly with supply chains to simplify the incentive process and remove the need for upfront financial outlay by households living with energy poverty. Consideration should be given to the procurement and incentive tools that can also address embodied carbon and advance low-carbon materials. Channeling incentives through manufacturers, suppliers and installers sends a strong signal that industry should invest in supply chain growth and labour development to meet market growth.

Background:

To meet emissions reduction targets, Canada must develop a retrofit industry able to decarbonize 600,000 dwellings and more than 30 million square metres of commercial space each year by 2040. This industry must be equipped to serve households of all income levels and in all regions of the country.

Federal government programs must be designed to both scale up industry capacity and ensure that households living with energy poverty can access programs designed to transition away from fossil fuels, afford their everyday energy needs, and benefit from clean energy.

The federal government must establish a targeted effort to analyze and address the housing needs of Indigenous communities and members of urban Indigenous populations led by Indigenous agencies and community representatives who would set the priorities and determine investment needs and allocation.

  • The total public investment needed to stimulate decarbonization and climate- proofing of Canada’s existing building stock has been estimated at $10- 15 billion per year for ten years, covering 50-75% of the incremental cost of the required upgrades (above normal replacement costs).
  • The Indigenous Clean Energy (ICE) Indigenous Housing Energy Efficiency Data Set estimates 209,000 homes in Indigenous communities across Canada (121,000 First Nation, 13,000 Inuit, 75,000 Métis) require energy efficiency upgrades. Combined with the need for about 72,000 new homes, this represents an investment of $5.4 billion. These numbers generally reflect rural, remote and on- reserve homes.

To be truly transformative, the early-stage retrofit accelerators and market development programs should be connected to last-mile capital funding to tie into cutting edge whole- building solutions, such as those that emerged from the Energiesprong program. In Europe, this has resulted in technologies like prefabricated retrofit panels and all-in-one HVAC units now being manufactured and implemented. Support for transformation of the construction industry is also necessary for scaling beyond one-off unicorn projects. Specific, targeted funds must also be directed to ensure households living with energy poverty have access to energy efficiency measures.

Recommended Investment:

To begin ramping up to the full investment level needed, the Green Budget Coalition recommends that the 2024 federal budget allocate $24.3 billion over five years, including:

  • $20 billion over five years for no-cost home retrofits and heating electrification, including heat pumps, for households experiencing energy poverty, with assurances to include and protect renters. Within this funding stream, special attention should be paid to rental buildings, non-market, and social housing (through the National Housing Strategy) and include climate adaptation measures that not only reduce heating energy demand and carbon emissions, but also make them healthier, safer and resilient. [NRCan, CMHC, HC, INFC]
  • $7.5 million over five years for the development of a National Affordable Home Energy Strategy with clear actions and outcomes to address energy affordability in Canada. This national strategy should be developed with a focus on energy poverty, with the input of a new advisory group and in coordination with the National Adaptation Strategy and Canadian Green Building Strategy. This new Strategy would set targets for the reduction of energy poverty across the country, seek to identify which gaps should be addressed, and create new programs to address those gaps through federal programs or joint programs with the provincial governments. [NRCan, INFC]
  • $2.7 billion over five years for retrofits and energy efficiency upgrades for housing in Indigenous communities, as identified by Indigenous Clean Energy. [ISC, CMHC, CIB, INFC]
  • $1.5 billion over five years for skill development, capacity building and recruitment, with funds earmarked to increase equity and diversity in the retrofit economy. [NRCan, ISED, HC]
  • $125 million over five years for last-mile capital investment in 15-20 transformative deep retrofit demonstration projects identified by deep retrofit accelerator and market development teams. [NRCan]
  • Capitalizing a loan guarantee program to reduce the risk to private financing of building retrofits. [CMHC, CIB, NRCan, INFC]
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Financing nature protection and recovery in Canada

In December 2022, Canada hosted the 15th conference of the Parties (COP15) to the United Nations Convention on Biological Diversity (CBD) in Montreal. COP15 landed a historic global agreement to protect nature – the Kunming- Montreal Global Biodiversity Framework (KMGBF). During the conference, Canada committed6 to work with rights holders, provincial and territorial governments and stakeholders to develop a whole-of-government National Biodiversity Strategy and Action Plan to achieve Canada’s targets, including protecting at least 30% of land and ocean by 2030. More and longer-term financial resources from all sources will be needed to implement this strategy and deliver nature-positive outcomes.

The stark realities of climate change and biodiversity loss are increasingly evident across Canada. These deeply intertwined issues pose existential threats to our society, environment, and economy. Studies show that more than half of global GDP, amounting to $44 trillion, depends on nature. The World Economic Forum has identified biodiversity loss and ecosystem collapse as a top global risk.

The biggest direct driver of biodiversity loss globally and in Canada is habitat destruction, with climate change growing in significance. Thus, protecting, managing, and restoring land and ocean ecosystems is key to halting and reversing biodiversity loss. Such actions also contribute to climate change mitigation by safeguarding carbon stored in peatlands, wetlands, forests, grasslands, ocean and coastal ecosystems, and removing carbon dioxide from the atmosphere. These “nature-based solutions” promote environmental resilience, and directly support Canada’s National Adaptation Strategy.

Much of the work to protect, restore and sustainably manage biodiversity hinges on the Government of Canada’s recognition of Indigenous jurisdiction and title, and effective co-management of protected lands and ocean with Indigenous governments, through cooperative federalism. Indigenous-led and co-led conservation and stewardship initiatives offer a pathway to deliver on biodiversity and climate change goals, incorporating traditional knowledge, cultural values, and sustainable practices.

Nature loss and climate change are intrinsically interlinked – a failure in one sphere will cascade into the other. Without significant policy change or investment, the interplay between climate change impacts, biodiversity loss, food security and natural resource consumption will accelerate ecosystem collapse, threaten food supplies and livelihoods in climate-vulnerable economies, amplify the impacts of natural disasters, and limit further progress on climate mitigation.

World Economic Forum Global Risks Report 2023

Permanent financing arrangements—including endowment funds and Project Finance for Permanence—co-designed and managed by Indigenous peoples and institutions, are needed to ensure long-lasting gains, while providing the reliability that Indigenous communities need to embark on ambitious conservation initiatives that uphold their socio-economic and cultural values.

Delivering the transformational change required to effectively tackle the twin crises of biodiversity loss and climate change requires that biodiversity and ecosystem services are recognized and factored into decision-making and investments across governments and society and that public policies and financial flows are aligned with framework goals and targets.

The KMGBF commits Canada to “identify, phase out or reform incentives, including subsidies, harmful for biodiversity…”. This is the single biggest opportunity for catalyzing a nature-positive economy. Current spending on practices that degrade nature far outstrips spending on those that conserve and restore it. Action is urgently needed to identify environmentally harmful subsidies in Canada and to pursue innovations in federal subsidy and tax reform, budgeting and policymaking, and leadership in the expansion of green financial products, to improve coherence between economic and environmental policy, and reorient the flow of public capital to catalyze new nature- positive economic opportunities.

Recommendation:

To deliver on Canada’s nature protection and recovery commitments, the federal government must:

  • Invest in long-term financing arrangements to support Indigenous-led and co-led conservation initiatives and partnerships to protect, restore and steward land and ocean ecosystems, and to support provincial/territorial governments, civil society and others to be good partners in this work;
  • Increase investment to biodiversity and ecosystem services closer to the level for climate change, sending a clear signal that the climate and biodiversity crises are interdependent, pose significant risk to society, and must be addressed in tandem; and
  • Identify, and eliminate or redirect subsidies that harm nature, and realign existing federal funding programs (e.g., infrastructure) to support nature and climate-positive actions.

The Green Budget Coalition has developed a list of priority actions, costing $16 billion over seven years and $1.8 billion annually thereafter—for details, please see Financing Nature Protection and Recovery in Canada – Detailed Recommendations, later in this document.

Even if every recommendation in the Financing Nature Protection and Recovery in Canada – Detailed Recommendations section is implemented, there would be more work to do. Nonetheless, these recommended actions are a tangible start towards ensuring Canada’s diverse and unique species, habitats, and ecosystems are safeguarded for future generations along with the prosperity and economic opportunities that depend on them.

[ECCC, NRCan, DFO, PC, FIN, PCO, TC, AAFC, CIRNAC, ISC, ISED, CFIA, PS, PHAC, HC, PMRA, GAC, StatCan]

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