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The Harper government has an opportunity to burnish its environmental record with some targeted investment in Canada's clean-tech sector in this week's budget, but its determination to slay the deficit may trump any green agenda.
Ottawa faces increasing pressure to give more priority to environmental considerations as U.S. President Barack Obama publicly pursues his own clean energy program even as he considers whether to approve the Keystone XL pipeline, which opponents argue will contribute to climate change.
A clear commitment from the Harper government to renewable energy and conservation could help Ottawa's public relations effort as it lobbies for the pipeline.
The Conservative boast they have spent $10-billion on clean technology, but much of that money has been earmarked to the oil sands and coal-fired electricity, with pilot projects meant to commercialize carbon capture and storage technology to remove carbon dioxide emissions.
CCS may be an important tool to reduce greenhouse gas emissions from fossil fuel use, but it is a long way from being commercially viable. Companies would have to face a significant carbon price to make it worthwhile for them to invest in removing emissions from oil sands upgraders and power plants.
Other than CCS, the government has focused on two areas: subsidies for biofuel producers and investments in Sustainable Development Technology Canada (SDTC), a venture capital fund which Environment Minister Peter Kent described this week as a "significant driver of environmental innovation."
Just a few days after President Obama urged Congress to allocate an additional $2-billion for clean energy development, Mr. Kent said Canada is doing its part.
"Our government actively supports business efforts to develop innovative and sustainable solutions, advance technologies and promote a green economy," he told an international conference in Montreal this week.
Mr. Flaherty's budget on Thursday will test that commitment.
Don't expect anything new for biofuel producers in this week's budget. Earlier this month, Natural Resources Minister Joe Oliver announced he would not renew an expiring EcoEnergy progam that underwrites construction of new biodiesel plants.
The clean-tech industry has more hope for the SDTC, which has depleted its technology fund and is looking for $500-million over five years to replenish it.
The not-for-profit foundation also has a $500-million fund to support construction of next-generation biofuel facilities, which make fuel from agricultural and municipal waste rather than food crops. It has been slow to spend that money as the companies delayed ambitious construction plans, but it now has several proposals in the pipeline.
Faced with deficit pressures, Mr. Flaherty may well siphon money out of the biofuel fund and allocate it to the broader technology fund, "repurposing" as it is called in the bureaucracy.
In a recent appearance before a Commons committee, Celine Bak of the Canada Clean Technology Coalition argued the government needs to do more to nuture the fledgling sector than invest in venture capital, as important as that may be.
Instead, she urged a government-wide effort to develop domestic and export markets for clean technology, including internal procurement strategies, and to look for innovative ways to provide financial support through agencies like Export Development Canada.
The Conservative government shows little sign of adopting such an ambitious approach, but instead focuses on traditional fossil fuels.
Where President Obama touts his clean technology agenda as a central economic theme, the Harper government trumpets "responsible resource development."
Shawn McCarthy covers energy and the environment from The Globe's Ottawa bureau.