Putting money into green technology

During this election campaign, many of the parties have promised money - some offering billions of dollars - to promote green technology and green jobs. But is the money aimed at the right places?

During this election campaign, many of the parties have promised money to promote green technology and green jobs.

But those promises leave some observers of a campaign that has been focusing mainly on economic and environmental issues wondering whether it would be money well spent.

Manufacturing in Canada is suffering, with the sector losing almost 70,000 jobs between August 2007 and the same month of this year, Statistics Canada has said. The oil sector, however, is booming, boosted by an explosion of growth in the tar sands industry.

At the same time, how the country confronts issues such as climate change, carbon emissions and alternative energy is the focus of some of the greatest divisions among the parties.

Given the dollar figures being tossed around by the parties, some might question whether the government should be pumping money into green technology, or trying to pick the right sectors of environmental technology to back with taxpayer money.

One high-tech market watcher says government functions better when it stays away from trying to create a specific industry where none existed.

"The important thing is that governments worldwide do not have a particularly stellar track record of identifying emerging sectors and clusters, and where they should be and what they should invest in," said Duncan Stewart, the director of research for Deloitte Canada in technology, media and telecommunications.

'Critical time'

What government is good at, according to Stewart, is setting up the incentives to create an environment for business to succeed.

"If they go at it with a shotgun instead of a rifle, they do much better," he said.

In the case of green technology, he said the sector is still in its relative infancy, at a time when Canada can still get to the forefront.

"Not only is it probably a good idea for the government of Canada to think about encouraging this industry … it's actually at a critical time," Stewart said.

One environmental group said any question of where to put the money into environmental technology must start with putting a price on carbon emissions.

"By putting a price on carbon — by making it worthwhile to reduce your carbon emissions — you're letting the market chose the technologies," said Nicholas Heap, a climate and energy policy analyst at the David Suzuki Foundation.

Heap said putting a price on carbon isn't the only piece of the puzzle, adding that regulatory measures and investments by government are also necessary.

"You've got to start by putting a price on carbon. We're agnostic as to whether that is cap-and-trade or a carbon tax, or indeed both," he said.

Party promises

The New Democrats have made the most ambitious promises of this election campaign when it comes to putting money into green technologies and trying to stimulate job creation.

The NDP said it would spend about $8 billion over four years, including $4 billion to help the auto sector design and build environmentally friendly vehicles.

Another $3 billion over the same time frame would go into a "green-collar" jobs that would promote training in energy-efficient and renewable energy technology, while $840 million would go towards research and development tax credits.

NDP Leader Jack Layton said the strategy would help create about 40,000 manufacturing jobs.

As part of their Green Shift plan, the Liberals have promised a $1-billion Advanced Manufacturing Prosperity Fund. They have said it would help make Canada a leader in green technologies.

"[The fund] will support major investments in manufacturing and [research and development] facilities, which will serve as an anchor for clusters of economic activity," the Liberal party's platform document reads.

The Green party's offerings are on a smaller scale, with no dollar figures attached.

The Greens say they would establish a federally funded Small Cities Green Venture Capital Fund to support local green business startups. They would also set up a Green Venture Capital Funding Program providing matching federal funds for locally raised venture capital up to a set limit per community.

The Conservatives have not made any direct promises during the campaign of money for job creation in the green technology field, but during their time in government, they offered $230 million as an inducement to companies to adopt clean-energy technologies, and created a $1.5-billion Eco-Trust fund with the provinces. The party's platform — released a week before the election — contained a pledge to develop a cap and trade system to cut pollution and curb greenhouse gas emissions.

The Bloc Québécois have said they support investment in renewable energy sources.