Group urges $41B 'green' stimulus package; PowerUP Canada wants recommendations reflected in federal budget

Tyler Hamilton, January 21, 2009, The Toronto Star -- Borrowing a page from U.S. President Barack Obama's ambitious energy playbook, a diverse coalition representing more than 850,000 Canadians is calling on the federal government to work with provinces to create a $41 billion "green" stimulus package.

The proposed five-year Green Energy Action Fund would be a combination of loans and direct spending, funded largely by the creation of "green bonds" and from government revenues raised through the auction of carbon cap-and-trade credits to industry.

The coalition, led by a group called PowerUP Canada, hopes to see its recommendations reflected in next Tuesday's federal budget. It has enlisted the support of four former prime ministers with an aim to more closely align the country's energy and job-creation policies with those of the Obama administration.

Their request is bold, given that even the green stimulus package under consideration in U.S. Congress is just a little larger at $54 billion (U.S.). "I think Obama's plans beg the question of whether Canada will be left behind," PowerUP executive director Tzeporah Berman said.

Under the coalition's plan, $18.6 billion (Canadian) in low-interest loans would be created to ease the credit crunch affecting renewable energy developers, spur energy retrofits of buildings, support green infrastructure projects and boost investment in clean technology manufacturing – all with an eye to creating jobs.

Loans would also be extended to homeowners and businesses to help with the purchase of small-scale renewable energy technologies and efficiency retrofits.

Another $22.7 billion would be for direct spending on public transit, green public housing or building projects, and expansion of federal incentives for the purchase of energy-efficient appliances, vehicles and other green technologies.

"This could be an important part of an overall strategy to help Canadians cope with today's financial and economic crisis," said Ken Neumann, national director for the United Steelworkers in Canada. The plan also has support from the Forest Products Association of Canada and the National Union of Public and General Employees.

At a wind turbine parts plant in Ohio last week, Obama made clear that investment in energy efficiency and green energy is central to his economic stimulus plan.

"I'm told that if we don't act now, because of the economic downturn, half of the wind projects planed for 2009 could wind up being abandoned," he said. Obama has said he is committed to doubling the production of renewable energy in the United States over the next three years, improving the energy efficiency of two million U.S. homes, and modernizing more than 75 per cent of federal buildings so they'll use less energy.

He's committed to spending $150 billion (U.S.) over 10 years to reach those goals.

He has also pledged to get at least one million "plug-in" hybrid vehicles on U.S. roads within six years, as well as double automobile efficiency by 2025 by increasing fuel economy standards for vehicles by 4 per cent each year.

He also wants to eliminate all oil imports from the Middle East and Venezuela within 10 years.

In the near term, Obama has worked with Democrats in the U.S. House of Representatives, who last week introduced an $825 billion economic stimulus bill.

Nearly 7 per cent, or $54 billion, has been allocated to energy efficiency, renewable energy and clean technology spending aimed at creating millions of "green-collar" jobs.

In Canada, Tuesday's budget is expected to include economic stimulus measures in the form of both tax cuts and infrastructure spending.

It's unclear whether there will be funding specifically designated for green projects and technologies, or mechanisms such as green bonds to raise money for low-cost loans.

Beyond stimulus spending, however, the Harper government has made clear in recent weeks that it wants to work closely with the Obama administration on carbon capture and storage technologies, and on greater integration of each country's electricity grids.

The Conservatives are also seeking a common North American carbon cap-and-trade system, which sets limits on the amount of greenhouse gases that can be emitted by industry, and they want common targets for renewable power and fuel-efficiency standards.

Yesterday, Environment Minister Jim Prentice downplayed the near-term role that renewable-energy and smart grid investments can play. A top priority for Harper's government is to convince the Obama administration that it needs oil from Canada's tar sands, and that tough environmental standards that discriminate against "dirty" oil could hurt both countries.