The Liberal government will spend $5 billion over the next five years on greening Canada's infrastructure and another $1.75 billion over the next two years toward developing a clean economy and protecting the environment.

The environment is mentioned often in the budget, with measures scattered throughout the document, in chapters on everything from taxes to trade. The budget includes money for a long shopping list of promises made in the Liberal election platform.

They include:

  • $518 million for local governments to strengthen their infrastructure to withstand a changing climate.
  • $2 billion for a clean water and wastewater fund for cities and provinces to improve their water infrastructure and wastewater treatment.
  • $63 million over two years to build charging stations for electric vehicles and hydrogen and natural gas refuelling stations.
  • $128.8 million over five years to deliver energy efficiency programs to retrofit buildings and to improve standards for vehicles and products.
  • Launching regional discussions to identify the most promising projects to expand electricity infrastructure.

Essentially, the government plans to fix up the nuts and bolts of the country's infrastructure and do it in an environmentally friendly way.

The overall approach to the environment outlined in the budget document is that Canada must develop green infrastructure now or lose out later as the global economy shifts toward renewable energy.

"Some believe we must choose between a strong economy and a clean environment. They are simply wrong," said Finance Minister Bill Morneau in his budget speech to Parliament.

The approach is getting an initial thumbs up from one environmental group focused on renewable energy.

"I think it's a really good thing," said Clare Demerse, a senior policy adviser with Clean Energy Canada.

"It means they are not seeing the environment as one little niche but as something that goes throughout the economy, that this is an economic strategy and this is the way Canada is going to grow."

Funding the start of a climate plan

One of the largest spending areas is targeted at keeping Canada's international promise to reduce the country's greenhouse gas emissions and to craft a pan-Canadian climate strategy with provinces and territories.

Prime Minister Justin Trudeau signed the Vancouver declaration earlier this month with the premiers and territorial leaders, which includes a commitment to put a price on carbon.

The budget allocates $2.9 billion over the next five years to address climate change and pay for the work on that pan-Canadian framework. Some of that funding will also pay for policies to reduce emissions from the largest source of emissions, transportation and energy, including putting a price on carbon.

But the Liberals have quietly watered down one promise they made during the election: to phase out fossil fuel subsidies. They promised to aggressively cut Canada's subsidies to energy producers, estimated to be around $1 billion, by reducing it by $250 million right off the bat.

But the budget leaves in place the existing accelerated capital cost allowance for liquefied natural gas facilities. Companies can write off 30 per cent of the cost of equipment and 10 per cent of the cost of buildings. Instead of phasing that out, the budget allows it to live out its life until it expires in 2025.

Canada is continuing to phase out other fossil fuel subsidies over the coming years, as the previous Conservative government promised to do along with other industrialized countries.