Canada Loses Track of Green Spending

The Canadian government can’t track the green in green spending. The Toronto Star newspaper and the Canadian Press reported Friday that federal environmental commissioner Scott Vaughan and from Auditor-General Sheila Fraser found no evidence that Canada’s Conservative government’s environmental programs are making a difference.

 

The reports of these two officials appeared just days after the passage of the 2009 federal budget, which, among other highlights include $1 billion over five years for a Green Infrastructure Fund. This program will finance sustainable energy infrastructure projects, such as modern energy transmission lines and will contribute to improved air quality and lower carbon emissions on a cost-shared basis.

 

The paper and the wire service said that the two officials singled out a transit tax credit announced in 2006 that the government claimed would cut emissions by 220,000 metric tonnes per year from 2008 to 2012 and a $1.5 billion climate-change fund for the provinces that promised to cut 80 megatonnes in pollutants.

 

The transit tax credit will instead “’lead to negligible reductions’”, said Vaughan based on the government's own revised estimates and his audit of various government tools to reduce air emissions. The forecast had been downgraded last year to an average annual reduction of only 35,000 tonnes of greenhouse gases. As well, the means to measure its actual impact haven't yet been created.

 

The Star reported that as Opposition leader in August 2005, Stephen Harper promised that a Conservative government would provide a tax credit for transit users, part of a plan to boost the party's urban appeal. Under Harper, who became Prime Minister in 2006, implementation of the credit has cost $635 million. The lost tax revenue equated to the government paying between $2,000 and $3,000 for each tonne of greenhouse gases reduced, many times higher than the going price on international carbon markets, Vaughan told the Canadian media.

 

“I think the threshold we probably have for this is somewhere possibly double the $3,000 per tonne,” Vaughan told reporters.

 

The transit tax credit generated only lukewarm support from many transit advocates. They argued that the money should have gone instead into expanding transit networks and into buying new equipment, both of which are badly needed. It made no sense to lower the cost of these services, they argue, if there is inadequate product available; people will not ride overcrowded, slow, and breakdown-prone buses, trains, and ferries.

Meanwhile there is no scientific basis behind the emissions reduction claim in the climate change fund. Instead the government used what Vaughan called “flawed analysis” to arrive at the 80-megatonne figure and Ottawa put no onus on the provinces to account for how the cash is spent when it set up the fund.

The paper said that the audit also found that Environment Canada has yet to come up with a way to measure the emissions reductions that result from the tax credit. The finance department will not be able to evaluate the tax credit's impact until 2011, when income tax data become available.

 

Problems with the Clean Air and Climate Change Trust Fund, the $1.5 billion payout to the provinces, go even further because it will be impossible for the government to ever fully quantify the cut in greenhouse gases, the story went on. The federal government could have insisted on a reporting system that would force the provinces to account for the money they receive, but did not do so, the audit said.

 

“The government needs to know what works, what doesn't and why,” said Vaughan. “However, our audit work ... found gaps in the information needed for Parliament to know how well the programs we examined are working, or whether adjustments are needed.”