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    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

A budget that screws the planet for short-term profits

First off, the 2012 federal budget makes no upfront claim to be a budget. Indeed, the cover states only “Economic Action Plan 2012: Jobs, Growth and Long-Term Prosperity.” While we have been accustomed in recent years to budgets with their own titles, this one does not actually say “Budget” anywhere. This makes it more a framework economic document that includes gutting of environmental assessment in the name of the economy.

This is a colonial vision of the economy as a quarry for foreign interests. Instead of ensuring development of resources in a manner consistent with real long-term needs like energy security, the country is to open to any foreign investor who wants our resources, and Canadians will politely have to clean up the mess afterwards. While there will be some Canadian jobs in all of this, most of them will be of short duration in the construction phase, but the budget also increases the capacity to bring in temporary foreign workers.

This is known in the budget as “responsible resource development.” This perverse label includes putting hundreds of millions of tonnes of CO2 into the atmosphere – pretty much the opposite of being responsible.

Our penchant for planetary destruction just cannot happen fast enough. Under the mantra “one project, one review” environmental considerations will get lumped in with everything else, meaning that review processes for destructive mining and oil and gas projects will be fast-tracked. On p. 96, the six projects highlighted as “major economic projects” that will benefit from consolidated review — three oil and gas pipelines, a gold mine and a uranium mine — are indicative of the government’s priorities. The Major Projects Office currently has 70 projects on file, and the budget forsees 500 projects over the coming decade.

The document is full of euphoric exaggeration — the assertion, for instance, that “oils sands … generate wealth that benefits all Canadians.” The document then sternly adds that “Canadians will only reap the benefits that come from our natural resources if investments are made by the private sector to bring the resources to market” (emphasis added). Yet, the logic gets tied up in knots, as the pushing of the success story of resource development contrasts with claims that companies are facing “an increasingly complicated web of rules and bureaucratic reviews that have grown over time, adding costs and delays that can deter investors and undermine the economic viability of major projects.”

As for “jobs, growth and long-term prosperity,” unfortunately, there are few jobs in the resource sector areas under consideration (mostly mining and oil and gas projects) and other measures to facilitate the import of temporary foreign workers. As for “long-term”, this measure is focused on very short-term liquidation of Canadian resources for hefty profits but that imperil people in other countries and in the future.

One interesting note is a commitment to “rationalizing inefficient fossil fuel subsidies by phasing out tax preferences for resource industries.” It turns out this was a 2009 G-20 commitment, and Canada’s “implementation” is misleading at best. The first part of it came last year when Budget 2011 phased out preferences for oil sands producers relative to conventional oil (just as conventional oil is dwindling). In Budget 2012, an investment tax credit for oil and gas development specific to Atlantic Canada is being phased out (apparently worth $0 in budget terms) as is a mineral exploration and development tax credit (worth a measly $10 million per year and well offset by other tax cuts and deregulation lavished on the industry). These are token gestures compared to the grand commitment on “rationalizing fossil fuel subsidies.”

In terms of dollars, protecting the environment is also taking a hit as part of overall spending cuts (see other posts by David MacDonald, Armine Yalnizyan, Andrew Jackson and Toby Sanger). Environment Canada will get cut by $20 million in 2012/13 rising to $88 million in 2014/15 (an 8% cut). Parks Canada gets a $6 million cut this year, rising to $29 million in 2014/15.

The National Roundtable on the Economy and the Environment (NRTEE) has been scrapped, ostensibly because of an “expanded community of environmental stakeholders has demonstrated the capacity to provide analysis and policy advice to the Government.” Unless they get funds from foreign radicals, apparently. The NRTEE was one of the few federal voices that have acknowledged the challenge of climate change in a series of reports, while calling for action to reduce emissions, studying measures of doing so (such as carbon pricing) and making estimates of anticipated climate-related damages to the Canadian economy in future years. Their contributions clearly were not welcome in “don’t ask, don’t tell” Ottawa, and will be missed.

Small note: there is a $2 million provision for accelerated capital cost treatment of clean energy generation, targeted at biomass.

The term “climate” appears four times in the budget. Twice there is a passing reference to climate change, but really an afterthought. The other two times are in reference to investment climate.

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