Canada’s Stimulus Targets Carbon Capture and Nuclear Power

Canada’s Conservative government unveiled a budget yesterday with an energy balance distinctly different from that contemplated by President Obama in his economic stimulus package. “Green Causes Left Out of Budget” is how the Toronto-based National Post headlined its coverage. Toronto Star columnist Chantal Hebert writes that environmentalists may be the only “constituency, friendly or hostile to the Conservatives, that will not get a piece of the multibillion-dollar stimulus package.”

Whereas Obama’s $819 billion stimulus package proposes giving renewables a big boost, Prime Minister Stephen Harper’s C$33 billion (US$27 billion) Economic Action Plan would leave unchanged Canada’s EcoEnergy support program for renewable energy. Canadian Wind Energy Association president Robert Hornung predicts that the program may run out of cash before the end of the coming fiscal year, blunting the industry’s ability to draw investment amidst a superhot U.S. market.

“Our ability to compete with the United States for investment in wind energy projects and manufacturing opportunities will decline as a result of this budget. At a time when the United States has made measures to support renewable energy deployment a key component of its plans to stimulate the US economy, Canada is moving in the opposite direction.”

What takes top billing in Harper’s plan is, instead, carbon capture and nuclear energy. Government-owned Atomic Energy Canada Ltd (AECL) gets C$351 million to support, among other projects, development of the next generation of its CANDU heavy-water reactors. A C$1 billion clean-energy fund will finance carbon capture and storage (CCS) projects over the next five years. The CCS projects could be key to sustaining the massive investment in tar-sands-based oil production in Alberta and Saskatchewan.

Budgets like Canada’s are exactly what prompt some renewable-energy advocates to oppose CCS and nuclear energy: these technologies may have a role to play in boosting energy independence and reducing carbon emissions, but, as Canada’s lopsided spending plans show, there is a danger that they will divert funds that need to move toward even cleaner power sources.