Canada creates $2bn fund to reduce emissions
San Francisco, 15 June (Argus) — Canada will establish a C$2bn ($1.5bn) fund to help reduce greenhouse gas emissions in the provinces and territories that have agreed to a federal plan to address climate change.
Canada's Low Carbon Economy Leadership Fund will back projects that reduce emissions and improve energy efficiency, the environment ministry said today.
The fund will be divided into two parts, with nearly three quarters of the money going to the provinces over the next five years and the remainder placed in a "challenge" fund to which municipalities, indigenous groups, and individual organizations can apply.
Environment minister Catherine McKenna said the fund "will deliver clean, sustained economic growth for years to come."
The government is encouraging projects that improve energy performance, such as home and commercial retrofits, as well as those that allow greater storage of carbon in forests and soils.
"This is a major opportunity for farmers across the country," McKenna said.
Manitoba and Saskatchewan, the two provinces that have yet to sign on to the federal plan, are not eligible to receive any funding from the first pot.
Sasktachewan has been vocal in its opposition to the federal government's carbon pricing policies.
Premier Brad Wall called the decision not to allow the province to receive money a "heavy handed" move by the federal government. "Withholding funds from provinces that do go along with the federal government's policies represents a new low in Canadian federalism," he said.
But McKenna said the government is working "very closely" with the two provinces and remains hopeful they will sign on to the federal plan.
Under the Pan-Canadian Framework on Climate Change, the country aims to reduce greenhouse gas emissions by 30pc from 2005 levels by 2030. As part of the framework, the provinces and territories must put a price on carbon via some version of a tax or cap-and-trade program. Manitoba and Saskatchewan have thus far balked at the requirement, although Manitoba has started carbon pricing talks.
Jurisdictions that do not implement their own policies will face a federal "backstop" next year that consists of a carbon levy for fossil fuels and a separate system for industrial facilities.
The federal government will work with the provinces to approve projects from the C$1.4bn leadership fund this summer. The challenge fund launches later in the autumn.