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RR RUEHGA RUEHHA RUEHMT RUEHQU RUEHVC
DE RUEHOT #0246/01 0851813
ZNR UUUUU ZZH
R 261813Z MAR 09
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 9265
INFO RHEHAAA/WHITE HOUSE WASHDC
RHEBAAA/DOE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAEPA/HQ EPA WASHDC
RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS SECTION 01 OF 03 OTTAWA 000246 
 
SIPDIS 
 
STATE FOR OES/EGC, WHA/CAN 
 
WHITE HOUSE FOR CEQ AND OFFICE OF ENERGY AND CLIMATE 
 
EPA FOR OFFICE OF INTERNATIONAL AFFAIRS 
 
DOE FOR PI 
 
TREASURY FOR INTERNATIONAL 
 
E.O. 12958: N/A 
TAGS: EFIN ENRG SENVKGHG CA
SUBJECT: Canada's Green Investments in its Stimulus Package 
 
Ref:(A)State 26022 
 
Summary 
------- 
 
¶1. Begin Summary: Canada's federal budget for FY 2009 (April 1, 2009 
to March 31, 2010) introduced on January 29, 2009 announced 
approximately C$3.64 billion dollars (USD$2.97 billion at current 
exchange rates) for "Green Spending"; the Budget was passed on March 
12, 2009. The federal budget for FY2009 contained within it the 
government's "stimulus" elements.  The figure of C$3.64 billion is 
misleading, as the spending is generally over two years (FY 2009 and 
FY 2010) and some spending is actually spread over 5 years. 
Moreover, much of the stimulus funds that are counted as "Green"; 
such as C$1 billion for "renovation and energy refit to social 
housing" may be spent less on green (energy refitting) and more on 
brown (wood, shingles etc. for renovation).  Of the C$3.64 billion 
of "Green Spending" announced by the government, only C$1.19 billion 
has actually been appropriated to date.  End Summary. 
 
List of "Green Spending" Target Investments 
------------------------------------------- 
¶2. Canada's FY 2009 Budget tabled on January 29, 2009, listed seven 
targeted "green" investments for a total of $C3.64 billion (USD$2.97 
billion); actual expenditures are, however, spread over multiple 
years.  Some of the funding is for brand new initiatives, some is 
augmented funding for existing programs, and some appears to be 
re-announcements of funding already planned for but simply 
accelerated. 
-- C$1 billion for green infrastructure projects. (New Funding. 
C$200 million a year over five years beginning in FY 2009). 
-- C$1 billion over two years for renovation and energy efficiency 
retrofits to social housing.  (New Funding. C$500 million a year for 
two years beginning in FY 2009) 
-- C$300 million over two years to the ecoENERGY Retrofit program. 
(Additional Funding; an increase of C$150 million per year beginning 
FY 2009). 
-- C$1 billion for the Clean Energy Fund for clean energy research, 
development and demonstration projects. (New Funding - details to be 
announced in coming months) 
-- C$87 million over two years for the Arctic Research 
Infrastructure Fund.  (New. To maintain or upgrade key existing 
research facilities in the Arctic.) 
-- C$245 million over two years for the cleanup of federal 
contaminated sites. (Planned work which will be accelerated). 
-- C$10 million to improve government environmental reporting 
through the "Canadian Environmental Sustainability Indicators" which 
produce "a coherent set of indicators on water quality, air quality, 
and greenhouse gas emissions over time. (Ongoing expenditure) 
 
¶3.  In addition, although not trumpeted as "Green Spending", the 
government's budget also plans funding increases for rail transport 
and nuclear energy, in particular: 
 
--  C$407 million for improvements to VIA Rail service. The federal 
government subsidizes VIA to the tune of about C$150 million in 
operating subsidies annually, and over the past two years has 
provided additional funds (about C$150 million per year) for 
upgrades to rolling stock and facilities. This additional funding is 
to supplement those funds for upgrades. 
 
--  C$351 million for Atomic Energy of Canada Limited (AECL) for 
development of the "Advanced CANDU Reactor" and for AECL operations 
at its Chalk River laboratories where the bulk of the world's 
Qat its Chalk River laboratories where the bulk of the world's 
medical isotopes are produced. GoC funding for AECL over the past 
few years has been in the range of C$110 to C$150 million annually. 
The FY 2009 amount appears to be a significant increase. 
 
¶4. And some of the proposed C$14 billion in infrastructure spending 
in FY2009 and FY2010 (this is over and above the C$3.64 noted in 
para 2) will be on mass transit, typically counted as a "green" 
investment; for example: 
 
-- C$350 million for the Evergreen Transit Line in Vancouver BC. 
(Planned work for which funding has been accelerated). 
 
¶5.  Canada's Budget Implementation Act for FY2009, Bill C-10, 
became law on March 12 and specifically allocated certain stimulus 
payments, including C$200 million for the "Green Infrastructure 
 
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Fund" and C$500 million for "Renovation and Energy Retrofits" to 
social housing; as well as C$2 billion for immediate infrastructure 
spending from which some mass transit funding will flow.  The other 
monies noted above are being allocated via the typical GoC budgetary 
mechanisms of  departmental "Main Estimates" that flow through the 
Treasury Board (akin to OMB in the United States)  to Parliament 
where they are reviewed and funds are allocated quarterly to 
departments and agencies and programs.  No details are yet available 
on when the announced C$1 billion dollar "Clean Energy Fund" will be 
financed.   Thus, of the GoC's proposed C$3.64 Billion in "Green 
Spending" (para 2) announced in its FY 2009 budget, only C$1.19 
billion has actually been appropriated so far, and in the case of 
the Green Infrastructure Fund, although allocated, those funds will 
not actually flow until the autumn after a system is put in place to 
accept and vet green infrastructure proposals. 
 
Fossils Fuels and Carbon Sequestration 
-------------------------------------- 
 
¶6. Also announced in the FY 2009 budget is a proposed tax break, an 
accelerated "Capital Cost Allowance for Carbon Capture and Storage" 
which the government intends to develop over the next few months. 
The government has "committed to undertake consultations with 
stakeholders to identify specific assets used in carbon capture and 
storage with a view to providing accelerated capital cost allowance 
in respect of such investments."  The value of this tax break cannot 
yet be determined. 
 
¶7.  The GoC's Budget also touted its support for "Promoting Energy 
Development in Canada's North," and Budget 2009 provides C$37.6 
million in 2009-10 to departments and agencies "in support of 
environmental assessments, regulatory coordination, science, and 
Aboriginal consultations related to the Mackenzie Gas Project." 
 
Conclusion 
---------- 
 
¶8. The Canadian budget process, this year an amalgam of the typical 
budget upon which has been grafted a large supplementary budget 
request, has made it a challenge to parse out what has been promised 
from what has actually been appropriated so far.  We have been able 
to determine that the Canadian budget/stimulus package touches on 
almost all of the stimulus themes noted reftel, although the 
Canadian programs do not line-up cleanly with the list of areas 
noted reftel.  A rough accounting is provided below of which funding 
mechanisms would seem to apply to which theme: 
 
-- Renewable Energy - A portion of a C$1 billion "Green 
Infrastructure Fund" and a portion of the proposed C$1 billion 
"Clean Energy Fund." 
 
-- Energy Efficiency -  A portion of C$1 billion for  renovation and 
energy efficiency retrofits to social housing and all of the C$300 
million to the ecoENERGY Retrofit program. 
 
-- Research and Development - A portion of the proposed C$1 billion 
"Clean Energy Fund" and a portion of the C$351 million for Atomic 
Energy of Canada Limited (AECL) for development of the "Advanced 
CANDU Reactor." 
 
-- Improvements to the Power Grid - A portion of a C$1 billion 
"Green Infrastructure Fund" and a portion of the proposed C$1 
billion "Clean Energy Fund." 
 
-- Low carbon transportation, including incentives for industry and 
consumers - Enhancements to mass transit, bicycle paths, etc. 
through general infrastructure monies; and a portion of  the C$407 
Qthrough general infrastructure monies; and a portion of  the C$407 
million for improvements to VIA Rail inter-city service. 
 
-- Mass Transit - through general infrastructure monies. 
 
-- Oil, Gas and Coal - C$37.6 million to support planning for the 
Mackenzie Gas Pipeline from the Northwest Territories. 
 
-- Nuclear Energy - A portion of the C$351 million for Atomic Energy 
of Canada Limited (AECL). 
 
-- Forestry - C$70 million in FY2009, part of an on-going multi-year 
package in support of market diversification and innovation 
 
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initiatives for the forestry sector. 
 
-- Incentives to reduce use to Fossil Fuels - Nothing specifically. 
 
-- Green Jobs/Green Worker Training - Would be subsumed in the 
broader "Skills and Transitioning" effort worth about C$8 billion 
over two years. 
 
-- Greenhouse Gas Emissions/Carbon Sequestration - A proposed 
Accelerated Capital Cost Allowance for Carbon Capture and Storage 
assets, a portion of a C$1 billion "Green Infrastructure Fund" and a 
portion of the proposed C$1 billion "Clean Energy Fund." 
 
 
Breese