Green Technology, Not taxes

GREEN INVESTMENT STANDARDS

There are so many businesses in Canada that are leading the fight against climate change and working to reduce their emissions.

A Real Plan to Protect Our Environment strengthens Canada’s economic advantage and encourages environmental sustainability by making sure major emitters do their part to lower emissions. Guided by our Green Technology, Not Taxes principle, we will require Canadian companies to lead by example and invest in emissions-reducing technology if they fall short of our emissions standards.

We will continue to consult with provinces, territories, business leaders and industry experts to make sure that our standards are not just enforced but are also fair. Our standards will keep pace with technological change so that our businesses can adapt and continue to be competitive and environmentally sustainable, reducing their emissions with minimal economic impact. We are committed to protecting Canadian industry from the negative impacts of carbon leakage* by ensuring that standards are set with their competitive environments in mind.

As Prime Minister, Andrew Scheer will:

  • Set emissions standards for major emitters that will lower greenhouse gases and drive Canadian businesses to the highest standards of green technology.

Companies will be required to reduce their emissions to those limits. Those that emit more than is allowed under the Green Investment Standards will be required to invest in research, development, and adoption of emissions-reducing technology related to their industry.  These companies will be required to invest a set amount for every tonne of greenhouse gas they emit above the limit.  We want major emitters to invest in technology that will give them the best shot at reducing their own emissions. This should be technology with the greatest potential to reduce emissions and offer the best potential return on investment as dictated by the market.

Justin Trudeau’s climate scheme gives polluters a pass that he is not giving to consumers or small businesses. Our plan will expand the mandatory application of the major emitters policy from facilities emitting 50 kt CO2e to facilities emitting 40 kt CO2e per year. This means that our plan will be mandatory for more major emitters – more companies – than Trudeau’s plan.

*Carbon leakage is generally defined as the leaking or transfer of emissions from one country to another caused by carbon policy differences.

CERTIFYING GREEN INVESTMENTS

To make sure that investments reduce harmful emissions, our plan will include a transparent and accountable certification process for all investments.

By providing the Green Investment Standards Certification and determining the eligibility of green technology investments, we will ensure that companies will be able to make the best business decisions in a timely manner. The certification will require a technical assessment of the investment to determine whether a specific project, investment, fund, or other instrument supports the development or adoption of emissions-reducing technology.

As Prime Minister, Andrew Scheer will:

  • Develop a Green Investment Standards Certification program that outlines eligible investments.
  • Require all companies with facilities falling under this regulation to report on their emissions. We will establish an auditing function to ensure that emitters are complying with regulations and that investments are incremental.

Certification could either be sought by a company exceeding the Green Investment Standard or by a company wishing to promote its product to companies that exceed the Green Investment Standard. Once certification is achieved, a company will not have to re-apply for the same certification every year.

We will ensure that facilities are taking real action to make meaningful emissions reductions in the medium term and ensure that the right incentives are in place.

Environment and Climate Change Canada will oversee Green Investment Standards Certification.

EXAMPLES INCLUDE INVESTMENTS IN:

  • A subsidiary or division of a Canadian company that does eligible research and development of emissions-reducing technology;
  • An eligible industry research and development pool that allows Canadian companies to combine their investments on green technology;
  • Canadian green bonds or financial instruments that are dedicated to investing in emissions-reducing technology;
  • Canadian clean tech companies piloting or adopting emissions-reducing technology; and,
  • Canadian university and college programs that advance the development of green technology.

A STEP BY STEP PROCESS

There is a Canadian company that makes a product for use at home and in the world. It has a facility that produces more emissions than it is allowed under the emissions standard for its industry. As part of our environment plan they are required to spend a proportionate amount in an eligible clean tech investment.

After weighing its options, the company decides to invest in an eligible start-up that is developing a new carbon capture and utilization process that they know will fit their business model. This start-up has completed the certification process, so these investment costs are eligible expenses. In fact, the company sees long-term potential for the technology, so it has have decided to form a partnership with the start-up to share its expertise and support the growth of the start-up.


A Canadian company has exceeded its threshold allowed under the emissions standard. It is required to spend a proportionate amount in an eligible clean tech investment.

After weighing its options, the company decides to install a pilot project that is intended to scale up a promising new technology that recovers waste heat for re-use. The pilot meets all the requirements under the certification process. If proven and adopted, this technology would both reduce emissions and reduce operational costs.

GREEN HOMES TAX CREDIT

For so many Canadians, the up-front cost of making their home energy efficient is unrealistic and out of reach. There are Canadian innovators and businesses that have developed options for home improvement, but like any new product, it can take a while for these to become the go-to option at an affordable price.

These home improvements do not just save energy, they can also save money through lower home energy costs. To support Canadian families, a Conservative government will create a tax credit for green home improvements.

As Prime Minister, Andrew Scheer will:

  • Create a two-year Green Homes Tax Credit (GHTC) for homeowners to help pay for energy-saving renovations.

By making the Green Homes Tax Credit (GHTC) a two-year plan, it will incentivize Canadians to renovate their homes more urgently. This will encourage families to try new energy-saving products and technologies.

Under this program, Canadians will be eligible to receive a 20% refundable credit on their income tax for green improvements to their homes of over $1,000 and up to $20,000, which will allow Canadians to save up to $3,800 on their renovations in each year.

We expect this credit to cost $900 million per year.

In 2017, buildings represented about 12% of Canada’s emissions, or 85 Mt of carbon dioxide equivalent[16].

GREEN IMPROVEMENTS COULD INCLUDE:

  • Installation of high-quality insulation;
  • Investments in high-efficiency furnaces;
  • Replacement of doors and windows with more efficient models;
  • Upgrading of ventilation, heating and cooling systems; and,
  • Installation of solar panels.

GREEN HOME RETROFIT CODE

More and more Canadians are looking to make their homes greener. They do this to reduce their own emissions and save money on energy in the medium and long term. To establish standards for renovators, contractors and homeowners, we will put in place the new Green Home Retrofit Code.

As Prime Minister, Andrew Scheer will:

  • Establish a retrofit code for those who wish to undertake an environmental retrofit.

ENERGY SAVINGS PERFORMANCE CONTRACTING

We want to make it easier for builders and contractors to build green homes. Energy Savings Performance Contracting (ESPC) is a relatively new concept that has had success in other jurisdictions. It works by using investment capital up front and then having the building owner pay back the investor through the energy savings. The Green Home Retrofit Code will form part of the regulatory backing required for a new ESPC market to be established.

As Prime Minister, Andrew Scheer will:

  • Ensure the legal supports required to develop a market for Energy Savings Performance Contracting (ESPC) are in place to drive building renovation in the long term.

NET-ZERO READY BUILDING STANDARD

National Building Codes set the standards for building efficiency and can be an important tool in our efforts to lower emissions. The previous Conservative government increased energy efficiency requirements in both the 2010 and 2015 National Building Codes, and in the 2011 and 2015 National Energy Code of Canada for Buildings.

The Trudeau Liberals on the other hand have set ideological targets that increase the cost of homes, putting home ownership even further out of reach for so many Canadians. In 2017, government officials estimated that Trudeau's proposed National Building Code would add $35,000 to the price of a typical home[15].

A Real Plan to Protect Our Environment will establish a voluntary net-zero ready building standard. Canadians can find comfort in the fact that net-zero ready homes are an option – and not mandatory.

This will help create a market for cutting-edge home efficiency technology in all home price ranges. We will continue to strengthen Canada’s model building codes in a way that is sensitive to the impacts it will have on the cost of building a home.

As Prime Minister, Andrew Scheer will:

  • Establish a voluntary net-zero ready building standard.

GREEN CONSTRUCTION OPTIONS

We can’t tackle climate change without looking at the construction industry. There are several measures that can be taken to boost energy efficiency, without costing taxpayers or hurting businesses. We will encourage the use of green products like wood and low-carbon cement to reduce the carbon footprint of our buildings and other infrastructure projects.

As Prime Minister, Andrew Scheer will:

  • Encourage the greater use of wood and low-carbon cement in construction projects.

THE GREEN PATENT CREDIT

The green technology sector in Canada is growing, but it is not yet profitable. Canada does well in things like entrepreneurial ambition, public research and development, and venture capital; but we fall short on the number of researchers, amount of business research and development, and the number of patents[17].

Our green technology companies are strong in the early stages of research and development, they slow down in the middle (turning ideas into companies and growing those companies), and then our companies often stumble towards the finish line (commercialization and development)[18].

A Real Plan to Protect Our Environment will inspire green entrepreneurs and the development of green technology by creating a Green Patent Credit. The Green Patent Credit will incentivize the green-technology sector to do research and development as well as commercialization here in Canada, making our country a destination for green innovation. The increased supply of new emissions-reducing technology will in turn make green technology options more affordable for Canadians. The Green Patent Credit is modeled on the ‘patent box’ approach in the U.K.

As Prime Minister, Andrew Scheer will:

  • Establish a Green Patent Credit that will reduce the tax rate to 5% on income that is generated from green technology developed and patented in Canada.

The current business tax rate is 15%. We will reduce this to 5% for income from a green patent.  Because this is below the small business tax rate, it will also provide a significant incentive for Canada’s small businesses.

We expect the Green Patent Credit to cost $20 million per year in the beginning, rising to $80 million after four years. We believe in incentives, not taxes.  This green tax reduction will encourage investment in research and commercialization of green technologies and will encourage entrepreneurs to find ways to green their technologies.  

GREEN TECHNOLOGY AND INNOVATION FUND

Canada’s small but growing green technology sector is in urgent need of support. For too long, Canadian entrepreneurs have been starved of capital. They see more generous funding south of the border than they do at home. Many Canadian companies reach commercialization and then sell their technologies to other businesses to be put into production. It is time to unleash our technology and commercialize our products right here in Canada. We must provide our entrepreneurs the access to capital they need to succeed.

As Prime Minister, Andrew Scheer will:

  • Leverage up to $1 billion in private investment in new venture capital for Canadian green technology companies. This will build on the success of the previous Conservative government’s Venture Capital Action Plan. We will do this by providing $250 million for a fund managed by the private sector and separate from government.  The private sector will be required to invest $4 for each government dollar.  We will recover this money for taxpayers by selling the investment when the company gets off the ground and reaches commercial potential.  We will consult with industry to make sure our plan supports the best mix of early-stage to late-stage development.

CREATING A GO-TO GREEN HUB FOR INNOVATORS

Innovation thrives when researchers and entrepreneurs have access to robust networks of collaborators.  We will support a central hub that will allow people across Canada to connect with one another more easily and break down the silos that can hamper innovation. 

As Prime Minister, Andrew Scheer will:

  • Create a single online hub for green technology innovators that will help them identify where they can find talent, information, and resources from the private and public sectors.

Canada’s polytechnics, universities and centres for research and development have numerous resources including students, professors, high quality facilities and leading technology that can be used by Canadian Small and Medium Enterprises (SMEs).

LEADING INNOVATION IN TRANSPORTATION

Guided by our Green Technology, Not Taxes principle, our Green Patent Credit will encourage research and development in the transportation industry. A company, seeing the benefits of the Green Patent Credit, could be incentivized to create a fast charging electric vehicle battery. We will support Canadian companies to create emissions-reducing technology with the goal of getting their products to market faster. In turn, the increased supply of these products will make green options more affordable for Canadians.

A Real Plan to Protect Our Environment will work to reduce emissions in the transportation sector by closing the gap between conventional and zero-emission vehicles and removing barriers that slow down the transition that is already occurring. To do this, we will work with provinces and territories, auto manufacturers, business leaders and industry experts to develop faster charging electric vehicle batteries, increase the distances that can be travelled on a single charge, deal with the environmental challenges of recycling used batteries, and deploy the necessary charging or refuelling infrastructure to accommodate a changing fleet.

Right now, there are rules that apply to cross-border trucking that results in trucks being forced to drive empty for part of their journey.  Tens of thousands of transport trucks cross the Canada-US border every day, so this represents a significant opportunity.  These rules could be changed to improve the energy efficiency of international trucking in North America, while still maintaining necessary protections for domestic industries.

As Prime Minister, Andrew Scheer will:

  • Negotiate regulatory changes that would increase the efficiency of transportation of goods at Canada’s borders.

There are many options for reducing emissions in heavy duty vehicle fleets. A Conservative government led by Andrew Scheer, will consult with our industry partners to find ways that Canadian trucking companies can replace old and inefficient trucks with new and cleaner fleets.

SUPPORTING OUR AGRICULTURAL SECTOR

We recognize the hard work of our farmers who feed the tens of millions of families across our nation. Unfortunately, the Trudeau Liberal Carbon Tax has made a tough job even harder.

Farmers are doing their part in the fight against climate change by improving land-use practices like zero tillage and the use of 4R Nutrient Stewardship (right source, right rate, right time, right place[19]). We recognize their contribution in sequestering carbon.

As our farmers continue their vital work, our government will look for ways to support their continued development of technology and land-use practices that are good for our environment. We will work with them to increase the efficiency of fertilizers and land-use methods, maximize the potential of agricultural land to sequester carbon, and ensure that best practices keep pace with the most recent advancements in technology and practice.

GREENING THE GRID

Canada is home to one of the cleanest electrical grids in the entire world. More than 80% of our power comes from renewable sources. But, there are approximately 220,000 people living in nearly 300 remote, off-grid communities that rely on locally-produced power. In many cases, these communities rely on diesel generators to supply power which are expensive and harmful to the environment. 

As Prime Minister, Andrew Scheer will:

  • Pursue opportunities to connect regions and communities with clean power.

Even in the more populous regions of Canada that are connected to the grid, we are not taking full advantage of the latest technology. Modern smart grid technology allows for two-way communications between utilities and their customers to make electricity transmission more efficient, reliable and affordable. It strengthens the integration of clean energy resources, which improves our ability to green the grid. Also, nuclear energy has the capacity to provide clean, affordable and safe base-load power in Canada and around the world.  We can champion a new era of safer, scalable and virtually waste-free technology.

We are fortunate to have so many sources of clean, renewable power in Canada, but we can still do better.  Not only will we invest in smart grid technology and renewable power, and work with provinces and territories to increase the availability and use of these technologies, but our Green Technology, Not Taxes policies will help drive innovation forward. 

A Real Plan to Protect Our Environment will support the strategic interconnection of electricity grids. This can be on a project by project basis to connect regions with cleaner power sources, or it can be through the creation of a national energy corridor that facilitates the transmission of clean electricity.

As Prime Minister, Andrew Scheer will:

  • Foster the adoption of smart grid technology and strategic interconnection of electricity grids.
  • Foster the adoption of renewable power technologies.

As we pursue a cleaner grid, we are conscious of the fact that, in the past, there have been times when poorly executed energy policies have led to dramatic increases in energy prices.  While we will support the continued greening of Canada’s energy mix, we will always be mindful of the impact on the cost of living for Canadians.

MAKING RENEWABLE FUEL A BETTER OPTION

The Trudeau Liberals’ approach to fuel standards is complex and expensive. Their approach will impose significant additional costs on fuels that are already subject to the Liberal Carbon Tax.

Trudeau is pushing his burdensome Liberal fuel standard and proposing unprecedented new rules on solid and gaseous fuels that go beyond what the current technology can achieve. This is yet another cost for businesses already saddled with carbon taxes, regulatory changes and other federal red tape.

Our plan is to encourage fuel producers to do their part, but we must make sure that we do not put an added burden on Canadians. The demand for fossil fuels will continue for some time, so it makes sense to look at options for lowering their emissions intensity. But we must also consider the impacts on cost, land use, the current state of technology, regional differences in climate, and the ability of existing fleets to accommodate any changes to fuels.

As Prime Minister, Andrew Scheer will:

  • Work with provinces, territories and stakeholders to increase the availability and use of renewable fuels and to decrease the carbon intensity of Canada’s fuel mix.

KEEPING OUR COMMUNITIES SAFE

Canada needs to improve its resilience to extreme weather events to keep our communities safe. Communities must be able to identify risks and to be able to plan properly to address the risks.

An adaptation lens may include designing infrastructure to protect a community from extreme weather events, but it may also include designing other infrastructure to ensure resilience with respect to known hazards. In either case, it will help communities to be prepared in the event of an emergency.

As Prime Minister, Andrew Scheer will:

  • Incorporate a mitigation and adaptation lens to the government’s investment in infrastructure.

Enhanced or constructed wetlands and other natural features can provide low-cost protection against floods, drought, and water quality issues while also providing values like recreation, fish and wildlife habitat, and carbon sequestration.

As Prime Minister, Andrew Scheer will:

  • Pursue natural infrastructure projects that leverage the resilience of our natural landscapes.

COMBATTING EMISSIONS FROM WILDFIRES

In recent years, there has been a series of devastating wildfires in western Canada. These events force families from their homes and communities and can result in devastating loss.

Wildfires are part of the natural cycle of forests. However, a changing climate, including increased forest health issues and the potential for hotter, dryer summers has resulted in an increased risk of high-intensity fires. This is a problem for communities located in forested regions.

As Prime Minister, Andrew Scheer will:

  • Direct the Canadian Forest Service to investigate the use of technology that can improve the early detection of wildfires and/or better predict fire behaviour, specifically targeting high-risk areas close to communities.

WORKING WITH INDIGENOUS COMMUNITIES

Canada’s Indigenous peoples have a wealth of knowledge that can help Canada understand the changes taking place in our environment as we continue to manage our air, land, water and wildlife. We will continue to work with Indigenous communities to incorporate their knowledge of the land and their history into our broader understanding of the effects of climate change and the environment.

A changing climate disproportionately impacts Canada’s Indigenous peoples – especially those living in remote and Northern communities and working in industries such as mining and forestry. We will make sure that Indigenous communities are included as we plan mitigation and adaptation activities.

As Prime Minister, Andrew Scheer will:

  • Continue to build and maintain a respectful relationship with Indigenous peoples to learn from them and to incorporate their traditional knowledge into our efforts to address the impacts of climate change.
  • Collaborate with Indigenous peoples on undertaking mitigation and adaptation projects.

[15] Snyder, J. Nov 13, 2017. Tighter building codes are Ottawa’s next climate target – and it could cost homeowners up to $35,000.

[16] Canada.ca. Greenhouse Gas Emissions

[17] Conference Board of Canada. 2018. Innovation, Provincial and Territorial Ranking

[18] Elgie, S. and Brownlee, M. 2017. Accelerating Clean Innovation in Canada. Policy Brief, April 2017. Smart Prosperity Institute. 24 pp.

[19] Fertilizercanada.ca. Nutrient Stewardship.

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