Justin Trudeau’s government is $14.3 billion behind in climate change spending, report says

The Liberal government pledged to spend $48.6 billion of that money during the nine fiscal years from 2015-16 to 2023-24, but instead spent $34.3 billion — a shortfall of $14.3 billion, or 30 per cent. 

“Those commitments matter, and it’s important they follow through,” said Toby Heaps, chief executive and co-founder of Corporate Knights.

Heaps, who co-authored the report with researchers Jessica Carradine and Ralph Torrie, argued the spending commitments are essential to ensuring Canada keeps its promise to significantly slash national greenhouse gas emissions and position Canada to profit from the global transition from fossil fuels. 

“We’re not moving fast enough. And that’s because there’s a funding gap,” he said. 

The report follows reporting the Star published in June 2023, which compared budget commitments with accounts of actual spending tabled in Parliament to track whether the Liberal government was keeping pace with its pledges on 10 significant programs related to climate action. The analysis found that almost $8 billion in pledged spending was either unspent or spent slower than what was budgeted between the 2016-17 and 2021-22 fiscal years. 

Opposition critics from the Greens and NDP said at the time that the Star’s revelation raised concerns about the pace of federal climate action, as leading scientists have repeatedly warned that time is running out for the massive changes needed to dramatically slash emissions around the world and avoid the worst extremes of climate change. 

The new Corporate Knights report includes a broader analysis of more programs and a longer timeline up to the end of the current fiscal year. The most significant underspending occurred in 10 programs, the report said.

This includes a “funding shortfall “of $1.4 billion from the Greener Homes Loan program, more than $1.2 billion that was not disbursed on schedule through the Zero Emissions Transit Fund, and almost $1 billion unspent as planned through the Canada Green Homes Grant program, the Corporate Knights report concluded. 

Other programs with identified spending shortfalls were the Disaster Mitigation and Adaptation Fund, meant to help make infrastructure more resilient to climate change, which failed to spend $962 million as pledged as of 2023-24, the report said. And the Nature Smart Climate Solutions Fund, which is supposed to reduce emissions through conservation of natural carbon sinks, had a $600-million spending shortfall as of this year, the report found. 

The report also highlights how the government’s climate spending is not only slower than the Liberals committed. At an average of about $5 billion in pledged spending per year, it’s also much lower than the huge annual spending some analyses have concluded is necessary. 

Former parliamentary budget officer Kevin Page told the Star last year it is not uncommon for new programs to spend money slower than advertised in federal budgets because of the complexities of required planning and partnerships. But Page said the gaps between budget pledges and actual spending on climate initiatives raise important questions. Among them: will the shortfalls make it harder for Canada to achieve its climate goals?

In its 2022 budget, the Liberal government itself estimated it will require between at least $125 billion a year in public and private spending to build a “net-zero” economy by 2050, meaning emissions will be eliminated or offset by natural carbon sinks or still-nascent carbon capture technology. 

Under international climate negotiations, Canada has promised to cut national emissions to at least 40 per cent below 2005 levels by 2030, and achieve “net-zero” emissions by mid-century. The latest official tally says emissions in 2021 were 8.4 per cent lower than 2005 levels. 

The government has argued massive public supports are needed to position the country to benefit from the industrial changes required to confront climate change, like expanding clean electricity supplies and manufacturing green economic goods like batteries for electric cars. 

But Heaps said the Corporate Knights report raises questions about this effort as well, concluding that three quarters of the Liberal government’s planned climate spending — $138 billion of it — is backdated over the next decade. Much of this money is for tax credits to encourage businesses to spend money on clean technology, carbon capture facilities, and more. 

The risk for Canada is that it moves too slowly, and doesn’t put up enough money, and fails to compete with countries like the United States for the investments of this green transition, Heaps said. 

“We’re doing something,” he said, but it’s too slow and not enough.

Correction - April 9, 2024

This article was edited from a previous version to include updated figures. The Corporate Knights updated some of the numbers from its draft report, which was provided to the Star, after feedback from federal departments. The Star also mistakenly described the ongoing Greener Homes Loan program as cancelled.