The increasingly anemic Canadian economy was administered a boost in the form of an unprecedented stimulus package announced in the federal government's Budget 2009 released on January 27, 2009. The budget contains a number of programmes and incentives to promote "green" projects and the development of clean technologies and renewable energy. While the exact details are still to be provided, the "green" budget highlights are as follows.
The budget contains a pledge by the federal government to provide $1 billion over five years to support a Green Infrastructure Fund. The Green Infrastructure Fund will be used by the government to support green infrastructure projects on a cost-shared basis. The budget states that green infrastructure includes infrastructure that supports a focus on the creation of sustainable energy - infrastructure such as modern energy transmission lines and other projects that will contribute to lower carbon emissions.
Clean energy fund
Noting Canada's commitment to reduce greenhouse gas emissions by 20 percent by 2020, the budget lays out the government's objective to support clean energy research and the development of clean energy technologies. The budget contains a commitment of $150 million over five years to be used for clean energy research initiatives, and a commitment of $850 million over five years for the development and demonstration of "promising technologies", including large-scale carbon capture and storage projects. The government predicts that through this support over the next five years, a total investment of at least $2.5 billion will be generated in clean energy technologies.
Capital cost allowance for carbon capture and storage
Since 2006, the government has been a significant proponent of the development of carbon capture and storage technologies. The budget notes that $375 million has already been provided to support the development of these technologies, including $250 million in the Budget 2008 for a commercial demonstration of the technology in Saskatchewan and research in Nova Scotia. The remaining $125 million is available for carbon capture and storage projects under the ecoENERGY Technology Initiative of Natural Resources Canada.
The budget contains a pledge by the government to consult with carbon capture and storage stakeholders to identify specific assets used in carbon capture and storage technology with a view to providing accelerated capital cost allowance in respect of such investments. Such accelerated capital cost allowance advances the timing of capital cost deductions for tax purposes thereby deferring taxation and improving the financial return from investment in an asset.
Energy efficient homes
On an individual level, the budget contains measures designed to promote energy efficiency and conservation through a retrofit program intended to provide home and property owners with grants of up to $5,000 to offset the costs of making energy-efficiency improvements. The budget states that grants will apply to a variety of measures that reduce energy consumption, from increasing insulation to upgrading a furnace. The budget pledges $300 million over two years to this program to support an estimated 200,000 home retrofits.