Bloomberg Law
March 24, 2020, 10:10 PMUpdated: March 25, 2020, 6:29 PM

Canadian Clean Energy Sector Seeks Virus Stimulus Funding (1)

James Munson
James Munson
Freelance Correspondent

Canada should speed up funding for wind energy, hydro power, and electric vehicles to stimulate the economy during the coronavirus pandemic as it bails out the oil and gas sector, green industry groups said.

Federal green energy procurement programs, funding for charging stations, and electrical grid expansion policies should be accelerated or expanded to ensure Canada meets its global climate change obligations, the industry representatives said.

Stimulus spending could both help companies hurt by the effects of the new coronavirus, and provide a way for Canada to keep its economy afloat, the groups said.

“Once the greatest danger of this pandemic has passed, the economy will need a serious boost, and the climate crisis won’t have gone anywhere,” Anne-Raphaëlle Audouin, president and CEO of hydropower group WaterPower Canada, said in a statement on Tuesday.

Canada’s petroleum sector has been rocked by the global decline in oil prices and the effects of the coronavirus, but environmental groups are concerned any emergency stimulus will expand subsidies for an industry responsible for greenhouse gas emissions.

More than 100 environmental, faith, and social justice groups sent an open letter on Monday calling on the government not to offer petroleum companies financial support, like share purchases or loan guarantees, and instead send support directly to workers.

Retraining Program

An upcoming stimulus package for the resources sector could include measures to retrain oil and gas workers so they can work in remediating the large amount of abandoned oil wells in Alberta, Moira Kelly, spokesperson for Environment Minister Jonathan Wilkinson, said in an email. The federal government is actively looking at how to support the resource sector and is considering all options, she said.

The timing of the stimulus package is unclear, and officials couldn’t provide immediate comment on whether renewable energy industries would be included.

Among possible renewable energy measures, the federal government could speed up the Canada Infrastructure Bank’s construction of green projects, Robert Hornung, president of the Canadian Wind Energy Association, said.

The group also suggested the government increase the amount of renewable energy it consumes.

The bank has a C$35 billion ($24 billion) budget and a mandate to boost public transit. The government could also expand home retrofit programs that increase the number of solar panels, Hornung said.

WaterPower Canada, for its part, said a stimulus package could accelerate countless shovel-ready projects such as transmission lines, and hydropower refurbishments and redevelopments.

Electric Mobility Canada, which advocates for greater electric transportation and includes charger companies in its membership, said the government could expand funding programs to support charging stations and electrification of the government’s own fleets and parking lots.

Alberta’s Support for Oil Industry

Alberta, where Canada’s oil and gas sector is concentrated, rolled out its own support package for petroleum companies on March 20.

It includes paying C$113 million in regulatory fees so companies don’t have to, and extending by one year oil and gas lease agreements that expire in 2020.

Alberta Premier Jason Kenney has also asked the federal government to suspend any new environmental regulations, including any increase in a national carbon tax—a move several experts and renewable industry groups said would undermine clean industries.

“It’s total opportunism to talk about targeting those things,” said Chris Severson-Baker, the Alberta regional director at the Pembina Institute, a clean energy think tank.

Kenney also said new federal methane leak regulations for oil and gas sites should be suspended. But the rules could provide stimulus by providing jobs to technicians and reducing carbon tax payments, said Merran Smith, executive director of think tank Clean Energy Canada, which focuses on accelerating the development of clean energy.

(Updated with additional reporting in last paragraph. Previous version corrected Robert Hornung's name in ninth paragraph.)

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