Statement on Canada's Federal Budget 2019

IISD is pleased to find that Canada’s federal budget for 2019 offers meaningful support for workers and communities who will be affected by a shift away from fossil fuels—especially coal.

A transition to low-carbon, renewable sources of energy is needed for Canada to meet its Paris Agreement targets and join the global effort to avoid dangerous climate change impacts. IISD’s research shows that energy transitions can only succeed when it supports and involves affected workers and communities. In short, energy transitions must be just.

We applaud the Government of Canada for quickly moving on recommendations from the Task Force on Just Transition for Canadian Coal Power Workers and Communities and including in Budget 2019 commitments to:

• Create worker transition centres that will offer skills development initiatives and economic and community diversification activities in Western and Eastern Canada. These efforts are being supported by a federal investment of CAD 35 million over five years, funded through Budget 2018 and administered by Western Economic Diversification Canada and the Atlantic Canada Opportunities Agency.
• Work with those affected to explore new ways to protect wages and pensions, recognizing the uncertainty that this transition represents for workers in the sector.
• Create a dedicated CAD 150 million infrastructure fund, starting in 2020/21, to support priority projects and economic diversification in affected communities. This fund will be administered by Western Economic Diversification Canada and the Atlantic Canada Opportunities Agency

A key part of effectively, fairly and sustainably moving past fossil fuels involves full transparency on how tax and non-tax subsidies support the fossil fuel industry and slow a transition toward producing and using low-carbon energy. Along with the Climate Action Network, Équiterre, OCI and Environmental Defense, IISD and its Global Subsidies Initiative have continued to ask the Canadian federal government and provincial governments for a full accounting of fossil fuel subsidies, to help policy-makers and citizens understand the true economic math behind them.

IISD is pleased to see momentum in Budget 2019 toward transparency following Canada’s commitment to a subsidy peer review with Argentina. Specifically, the budget commits that:

• Canada will develop a self-review report, which will include a list of federal fossil fuel subsidies, including a description of the subsidies, annual costs, analysis of the subsidies and any potential plans to reform subsidies. Discussions with experts will be held to help inform the development of Canada’s self-review report, which will form the basis upon which an international expert review panel will assess Canada. This report will be made public once the peer review is finalized.
• Canada will also establish an international expert review panel to analyze the self-review report. The Organisation for Economic Co-operation and Development has agreed to chair the panel, which is expected to include our partnering country, Argentina, as well as other countries and key stakeholders.
• The findings and recommendations of the international panel will be made public once the review is finalized.

IISD looks forward to this work, as well as an upcoming report from Canada’s Commissioner of the Environment and Sustainable Development, as the world accelerates a transparent, just energy transition.

IISD looks forward to further analysis of Canada's budget, including by other members of the Green Budget Coalition.