Globe Climate: This is the most consequential budget for climate in years. Here’s what to watch

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Good afternoon, and welcome to Globe Climate, a newsletter about climate change, environment and resources in Canada.

Bill Nye is here to talk about disaster. In his latest TV series, The End is Nye, he explains and entertains audiences on the way to a better appreciation of the planet we live on.

The Science Guy spoke with The Globe and Mail about his work with live audiences, TikTok, and about the most pressing planetary threat of all – climate change. Read the Q&A with our science reporter, Ivan Semeniuk.

Now, let’s catch you up on other news.

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Noteworthy reporting this week:

1. Justice: The first Indigenous judge in the Supreme Court has been left off a case with consequences for Indigenous peoples, so the court could avoid the possibility of a tie vote.
2. Pollution: Imperial Oil and the Alberta Energy Regulator are called to testify over toxic leak affecting Indigenous communities
3. More pollution: Obsidian Energy is disputing an environmental protection order from the Alberta Energy Regulator, asking for more evidence that the injection of wastewater from its oil sands production caused a series of earthquakes.
4. Film review: Environmental drama Until Branches Bend is as deeply moving as it is upsetting
5. The Globe explains: The top five things to take away from the UN’s massive, final climate report
6. In-depth with The Narwhal: How big is the mercury threat posed by Hudson Bay’s thawing permafrost?

A deeper dive

Canada’s federal budget needs to be the answer to a clean economy

Ryan MacDonald is senior editor of climate, environment and resources. For this week’s deeper dive, he talks about President Biden’s visit, and the upcoming federal budget.

U.S. President Joe Biden’s visit to Ottawa was memorable for all the wrong reasons.

There was a certain cat-in-the-henhouse feel to the whole event as the American President charmed his way through an address to Parliament. We are friends, we share the same values and we will work together for a brighter future.

The truth is far more direct. And far more challenging for Canada. The United States is aiming to become the world’s clean-tech superpower. America is rolling out hundreds of billions of dollars in clean-energy spending through the Inflation Reduction Act. The Act has rattled Europe, which has announced increased levels of aid to help the continent compete as a manufacturing hub for clean-tech products.

The federal budget is Canada’s answer to the same, enormous conundrum.

Finance Minister Chrystia Freeland has said her budget will “invest aggressively” in clean technology. According to Freeland, Canada is at a crucial crossroads. The biggest economies in the world – and that means the U.S. -- have decided to embrace the clean economy. Canada can invest aggressively, or we can be left behind.

With that in mind. Here’s what to watch for:

• Refocus and stay competitive. Canada can compete with the United States’s extensive new green incentives without major new spending – but only if it acts quickly, the Business Council of Canada tells The Globe’s Bill Curry. To do that, Ottawa needs to refocus many of the federal climate and innovation policies it has announced but not fully launched.
• Focus on electricity. As Adam Radwanski reported last week, the federal government is set to carve out a bigger role for itself in electricity policy – an area that Ottawa has identified as pivotal to national economic interests and one that can be viewed as a Canadian competitive advantage. Policy levers that the government has been considering include some combination of tax credits, grants, financing mechanisms and the pursuit of joint funding agreements with provinces. There is growing recognition that grid investment is currently nowhere near what is needed to meet electricity demand that is expected to at least double.
• Production tax credits. The U.S. has gone big on production tax credits. Canada has not. Instead, green subsidies and tax credits are offered discretionally. There is a push for Canada to go down the production tax credit route – but only in a few sectors where Canada is deemed to have the best chances of competing globally, and with the greatest potential for broad economic benefits.
• Green tax incentives. In recent budgets we’ve seen several initiatives introduced as part of the government’s climate plan. The Globe’s tax columnist Tim Cestnick expects the budget to provide more of the same, including incentives to upgrade the efficiency of households and communities, increased funding to improve job skill development for the low-carbon economy.

America’s multibillion bet on low-carbon investments are targeted, direct and the money is already flowing. It’s time for Canada to pick a lane in the fast-moving industrial transition.

- Ryan

What else you missed

• Canada will take a ‘hard long look’ at UN call to speed emissions reduction, Environment Minister says
• France steps up push for nuclear-based fuels in EU renewables law
• Changing climate making snowmobiling riskier, OPP say
• Logging, forest loss may have awakened ancient B.C. landslides, at cost of about $1-billion
• Feds warn Ontario they could shut down development near Rouge Park
• Edmonton zoo says 47-year-old Asian elephant Lucy is too sick to be moved
• ‘The end of an era’: Dodge unveils its last gas-powered muscle car
• Greta Thunberg, climate activists get court nod to sue Swedish state
• Months after Pakistan floods, millions lack safe water, UNICEF says

Opinion and analysis

John Pomeroy, Bob Sandford, Thomas S. Axworthy: Spring is coming – where is our Canada Water Agency?

Kevin Krausert: Canada shouldn’t exit oil and gas – we can’t electrify everything overnight

Campbell Clark: Joe Biden invites Canada to join his industrial vision

Arno Kopecky: The new climate change report brings the harsh truth into sharp focus

Green Investing

Gordon Pape: How investors should react to a miserable year for green energy companies

Over the 12 months to March 17, the S&P/TSX Renewable Energy and Clean Technology Index lost 29 per cent. That’s deep bear market territory and a huge disappointment to investors who want to direct their money to climate-friendly businesses.

Given the amount of government support they receive, you’d expect green energy companies would be doing better. But rising interest rates, competition, and fluctuating output and demand are just some reasons why they’re not. Read the story for the full list.

Also read:

• It may have less ‘sizzle,’ but don’t overlook the ‘G’ in ESG
• Shell recommends shareholders reject climate activist resolution
• Franklin Templeton, Akamai defend sustainable investments amid backlash

Making waves

Each week The Globe will profile a Canadian making a difference. This week we’re highlighting the work of Kate Neville exploring the politics of energy transitions and transformations.

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My name is Kate Neville, I’m an associate professor at the University of Toronto in political science and the School of the Environment. I split my time between downtown Toronto on Dish with One Spoon territory and an off-grid cabin in northwestern B.C. on the territory of the Taku River Tlingit First Nation.

I study the politics of energy transitions and transformations, focusing on conflicts over how and where energy is produced and transported, and who owns and controls these projects. Recently, I’ve been writing more playfully about energy and work—how do we think about slowing down, stepping back, and pausing? I explore the meaning and value of idleness in my new book, Going to Seed, which has been awarded the Sowell Emerging Writers Prize [forthcoming 2024].

Instead of searching for the latest new tool or fuel that will solve all our troubles, we need to ask what we need energy for: what we are making, doing, moving and using? And can this be changed? Since technology alone won’t create a more just and sustainable world, we all need to participate in reimagining and reinventing our shared future.

- Kate

Do you know an engaged individual? Someone who represents the real engines pursuing change in the country? Email us at GlobeClimate@globeandmail.com to tell us about them.

Photo of the week

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Catch up on Globe Climate

• The final IPCC report looks dire, but there are bright spots
• What is the UN ‘High Seas Treaty’ really about?
• Indigenous community says they were kept in the dark about industrial leak
• What Canada can learn from the “Norway paradox”

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