Technology & Science

Uncertainty over feds' green plan wards off energy investments: report

The Conservative government's cloudy greenhouse-gas policy is jeopardizing investments in Canada's energy sector, warns a government document.

The Conservative government's cloudy greenhouse-gas policy is jeopardizing investments in Canada's energy sector, warns a government document.

"Lack of clarity and certainly with respect to greenhouse-gas policy increases investment risks," says a briefing note prepared for Lisa Raitt when she became natural resources minister last autumn.

A three-page briefing on energy and investment says "significant investments" are needed over the next decades to expand the country's energy infrastructure and develop new resources.

But the industry is still waiting for regulations that were promised two years ago before players will spend on some of those projects.

Draft rules were supposed to be published last fall after lengthy consultations, but that hasn't been done yet. Final regulations are scheduled to come into force on Jan. 1, 2010.

It's not clear whether those final rules will be delayed. The Tories are retooling their environmental plan for the third time to align with policy emerging from the United States.

The regulatory vacuum has sown uncertainty throughout the energy sector. There's some concern industry will have to scramble to comply with the new rules.

Planning difficult: electricity industry

"I think we're at strategy number five now that the various federal governments have produced in order to provide their views on how to reduce greenhouse gases," said Pierre Guimond, head of the Canadian Electricity Association.

"None of that is in law. None of that is in regulation. We don't know what the costs are, so therefore it makes our financial planning and our investment planning very, very difficult, if not impossible."

The Canadian Press obtained Raitt's briefing binder under the Access to Information Act.

The briefing note cites the Canadian Electricity Association's estimate that $100 billion is needed between now and 2020 to replace, refurbish and build new infrastructure in the electricity sector.

"We are not in a position to make those investment decisions now because we don't know what the law will expect of us," Guimond said.

The briefing also notes the oil and gas sector will need new pipelines and more refinery capacity to avoid supply disruptions "which could potentially become more frequent and increasingly difficult to manage."

The briefing note says policy should be designed to make it easier for companies to reinvest in "green" equipment, buildings and infrastructure.

No one from Natural Resources Canada was immediately available to comment, nor was Environment Minister Jim Prentice.

Last month, Prentice said the Conservatives' green plan — called Turning the Corner — was being "fine-tuned."

The Conservatives announced their environmental showpiece with fanfare two years ago, but it's seldom talked about any more.

The plan set reduction targets for Canada's biggest polluters, promising to cut greenhouse gases 20 per cent below 2006 levels by 2020.

It consists of regulatory measures, a cap-and-trade scheme, investments in green-technology funds and credits for companies that reduced their emissions early.

But Prentice told the House of Commons environment committee the Turning the Corner plan is being reworked because much has changed since the Conservatives announced the program in April 2007.

The Harper government's first piece of environmental legislation, the Clean Air Act, met widespread criticism when it was introduced in 2006 because its targets — some as far off as 2050 — were considered too weak.

The Conservatives later all but abandoned their original Clean Air Act and instead drafted Turning the Corner, a new plan with more short-term targets.