Want to read an inspiring Ontario case study of how a small NGO swiftly transformed electric vehicle charging in a thinly populated rural and tourist area? Warmest congratulations to the Bruce Peninsula Biosphere Association for making electric vehicle charging widely available from Tobermory to Lion’s Head in just a few months. From a standing start this winter, they have now placed 33 Level 2 electric vehicle chargers at independent inns, motels and campsites across the northern half of the Bruce Peninsula, including Hope Bay, Pike Bay, Ferndale, Lion’s Head, Stokes Bay, Miller Lake, Cape Chin, and Tobermory. So yes, you can now drive your electric vehicle all the way to Tobermory, supporting family businesses along the way.
And yet more congratulations to philanthropist Mike Brigham whose foundation made the installation subsidies possible. Mike Brigham’s Foundation is also funding Ontario’s $1000 usedelectric vehicle grant, since our provincial government refuses to do it, and rescued Plug-n-Drive when the Ford government cancelled its funding. Bottom line: Mike is personally doing more to foster electric vehicles in Ontario than our entire provincial government. We are lucky to have him.
Alberta claims to have an ethical oil industry. An ethical industry would pay its way and clean up its own mess. This is called the Polluter Pay principle and it’s fundamental to Canadian environmental law. Unfortunately, that’s not what’s happening in Alberta.
The Alberta Liabilities Disclosure Project’s new report, The Big Cleanup, shows that, over and over, the polluter doesn’t pay, and gets away with it. Instead, decades of unwise regulation and weak enforcement have allowed Alberta’s oil industry to pocket huge profits while sticking the public with the bill.
We’re talking about a really huge bill, billions of dollars. Make no mistake, every Canadian taxpayer is paying for the Alberta oil industry mess. The federal government is pumping taxpayers’ money into the bank accounts of the richest industry in the world. These subsidies are in flagrant disregard of Polluter Pay, and of Canada’s promises to stop subsidizing fossil fuels.
It doesn’t have to be this way.
Polluter Pay isn’t complicated. Every kindergarten child knows, if you make a mess, it’s your job to clean it up.
The 13 recommendations in this report are all common sense: be honest about the true cost of cleanup, ensure polluters fund the cleanup, and make sure the cleanup gets done on time.
I’ll speak to two of them.
Collecting cleanup costs in advance
First, the regulator needs to collect cleanup costs before companies become insolvent (#5). Right now, the Alberta Energy Regulator doesn’t require cleanup deposits upfront before drilling an oil or gas well. It only tries to collect a cleanup deposit from a company after it becomes insolvent.
That is way too late.
Any modern regulator would know that Alberta’s system will not work. When exploiting a resource creates money for companies at the beginning and leaves a mess at the end, the regulator’s job is to make sure the polluter pays and cleans up its mess. That means accurate cleanup estimates and strict cleanup timelines, backed up with enough cash to get the cleanup done. In other words, the government has to make sure enough cleanup money is put aside all along, before “profits” are paid out. This is called financial security.
Canada has lots of experience with resource companies going bankrupt and leaving huge debts and messes behind. When the government doesn’t hold enough financial security, the public regularly gets stuck with a big bill, pollution, and sometimes threats to public health.
For every new well—and for the 20% of Alberta wells that aren’t insolvent yet—financial security should be collected throughout its productive life—it’s just common sense. S. 135 of the Alberta Environmental Protection and Enhancement Act says the government can collect financial security.
Make all the polluters pay
Second, governments should use lookback powers to make previous operators cleanup abandoned wells. This is Recommendation #10 in the report.
Alberta has routinely allowed big companies to offload billions in aging wells to small players who become inactive or go bankrupt without cleaning them up. No one should be surprised that this creates a conveyor belt of liability dumping that the oil industry is quick to exploit.
Under S. 140 of the Alberta Environmental Protection and Enhancement Act, the government can order any “operator” to reclaim a well that has not yet been safely closed. Under s. 134, this includes.
(i) an approval or registration holder who carries on or has carried on an activity …,
Ontario uses similar provisions to order past operators to clean up contaminated sites. If the Alberta law doesn’t allow the same thing, it can easily be changed.
The premise is simple: if you profited from creating the mess, you have a role in cleaning it up.
This would remove the incentive for industry to dump wells on smaller companies with no hope to pay, by pushing the cleanup costs back to where they belong—to the companies that dined on the profits but dashed on the bills.
Learning from Ontario’s mistakes
Ontario used to make some of these mistakes. When it didn’t collect enough security, the public became burdened with hundreds of contaminated sites. And, as it turns out, thousands of old oil wells that are dangerous to human health and safety.
One classic example was General Chemical, which put dangerous waste into a lagoon. The government accepted a $3.5 million cleanup deposit for that lagoon. Creditors promptly pushed the company into bankruptcy, took the valuable assets and abandoned the lagoon. Then the government realized the cleanup was actually going to cost $60 million.
Underestimating cleanup costs has happened over and over again, on mines, landfills, factories, oil wells and others. The Ontario gov’t got stuck with enough big bills and contaminated sites that they are now much more careful to collect upfront what a cleanup is really going to cost, and they use lookback powers to make previous operators cleanup contamination. In the case of General Chemical, the government made the officers and directors pay some of the money.
Alberta seems content to make all Canadians pay.
An ethical, well-governed fossil fuel industry would pay its own way without billions in public subsidies and would clean up its own mess. As this report clearly shows, that’s not what’s happening in Alberta today. This makes a mockery of Alberta’s claims that its oil and gas industry is an ESG leader.
Every cleanup that the oil industry shirks undermines our Polluter Pay laws. And every public dollar that subsidizes the oil industry drains away money from government’s real jobs, such as housing, reconciliation, and building a green economy.
I thank the Alberta Liability Disclosure Project for the years of work that culminate in this excellent report. It’s time for Canadians to stop being exploited by this industry and enforce our Polluter Pay laws.
“Gradually, then suddenly”. After many years of hard work, climate litigation is racking up unprecedented victories around the world. Both companies (Shell) and governments (Belgium, France, Germany, etc.) have been found to be negligent and in breach of human rights for their inaction and delay on the climate crisis. Other governments (e.g. Australia) have been found to have a duty of care to take action, but have been given an opportunity to do so.
One fundamental factor is the powerful evidence that climate change is already harming local citizens, and will seriously harm today’s young people. For example, the Australian court made a finding of fact that “one million of today’s [4.7 million] Australian children are expected to suffer at least one heat-stress episode serious enough to require acute care in a hospital. Many thousands will suffer premature death from heat-stress or bushfire smoke.” Even judges must have noticed the upsurge of floods, droughts, fires, storms, etc.. And perhaps they are hearing climate despair from their own children.
I am giving a presentation about climate lawsuit court decisions to young lawyers at the Ontario Bar Association next week. For now, I am sharing the slides here.
I was delighted to listen to the most recent episode of the Indigenous Climate Action pod, called “In the Know – Respect the Moose”. This episode focusses on the animals’ long-term relationship with indigenous peoples across Canada, and how that relationship is threatened by #SportHunting, #LoggingRoads, #ClimateChange and other non-indigenous actions.
In 2016, one of my first reports to the Legislature as the Environmental Commissioner of Ontario focussed on the frightening plunge in moose populations, caused by these very things. I reported:
“There are many pressures on moose, including habitat degradation, disease and parasites (e.g., winter ticks, liver fluke, brainworm), hunting, predation and weather. Climate change is an increasingly serious threat.…Ontario has approximately 98,000 licensed hunters – more than one licensed hunter for every moose in Ontario – plus Aboriginal peoples with a constitutional or treaty right to take moose without a licence.”
Every single one of those licensed hunters is allowed to kill a calf every single year, and many are allowed to kill cows. Logging roads increasingly cut up what used to be roadless wilderness, while climate wildfires destroy habitat and make the remaining animals easy prey for hunters. No wonder populations had already dropped 20% in just 10 years.
In the five years since then, neither the Conservative nor the Liberal governments have done anything to stop the devastation.
So the Ford government will protect some land somewhere in exchange for its dozens of abusive, developer- friendly MZOs? That only makes it ok if land is interchangeable like Lego blocks. Which is nonsense. Of course they should expand protected areas; Ontario has only a fraction of the protected areas that the whole world has agreed to. But that will never make up for the damage they cause by destroying irreplaceable public assets in critical locations, like the Duffin Creek Wetlands.
Municipalities across Canada are grappling with how to honour their climate emergency declarations and net-zero commitments. To reach net-zero by 2050, municipalities would have to ensure deep energy efficiency and /or renewable energy retrofits in an average of ~3% of existing buildings every year, starting now. PACE (Property-Assessed Clean Energy) programs could help tackle this huge task, but only if they grow at unprecedented speed to unprecedented size. Can it be done?
Building emissions are rising
Climate pollution (greenhouse gases, refrigerants and soot) from heating and cooling buildings is a large proportion of most municipalities’ emissions, though only 12% of Canada’s total. Emissions from buildings have increased 9.5% since 1990, as increases in population and floor space have more than offset efficiency improvements. This is one of the reasons that Canada’s emissions increased again in 2019, directly contrary to our international commitments under the Paris Agreement..
Yet in the challenging journey to net zero, eliminating emissions from heating and cooling buildings is one of the easier tasks. Older buildings, in particular, waste large amounts of fossil fuels, largely because so much air and energy leaks through their walls, roof, floor, doors and windows. We already have the technology to fix this, and would reap many benefits from doing so.
Most people would prefer to live and work in buildings that are draft-free, warm in the winter and cool in the summer, inexpensive to keep that way and non-polluting. These buildings can have much better indoor air quality and therefore occupant health. This is particularly important in areas with persistent or occasional periods of intense air pollution, e.g. due to wildfires. A source of renewable energy, such as solar or geothermal, can add self-sufficiency and resilience. In the 2021 Texas blackouts, efficient homes with their own solar avoided the misery and broken pipes that plagued so many of their neighbours.
Municipalities can play a key role in providing access to attractive financing for the incremental costs of energy retrofits, because of their ability to unlock Property Assessed Clean Energy (PACE) / local improvement charge programs. PACE programs lend willing property owners the cost of the upgrades through low-interest, long-term, fixed-rate loans secured through the property tax mechanism. The owner’s utility savings[i] help pay back the loan, which can stay with the property or be paid out when it is sold.
PACE programs resolve several significant barriers: property owners don’t have to put money up front, the interest rate does not change, their credit rating may not matter, and they don’t have to keep paying back the loan if they move.[ii] The loan is low risk because it is secured through the property tax, which has low defaults, high priority and adequate security.
Well-designed PACE programs make good financial and environmental sense, although they take patience. For example, Halifax Solar City PV systems cost an average $20,000 for estimated savings of $57,000 over 25 years. A study for Our Energy Guelph calculated that a $3.2 billion investment in community energy, 2/3 of it in building retrofits funded through PACE, would yield $4.9 billion in 30 years, through energy savings, carbon price savings and electricity sales. Plus they would slash carbon emissions and make homes more comfortable.
Yet, despite many pilot projects and an alphabet soup of programs,[iii] Canadian PACE programs have not achieved either speed or scale. Instead, they run into obstacles that should be easy to fix. For example, half of all applicants to Toronto’s Home Energy Loan Program (HELP) were unable to proceed with their retrofit because their mortgagee didn’t consent. (City of Toronto, 2017). US PACE programs have been leaving us in the dust, despite the hostile leadership of the Trump years. Given the need for urgent, transformative change, what could make Canadian PACE programs take off?
Three key steps to takeoff
Here are three key steps that could make the difference:
Ensuring that mortgagees cannot block PACE loans for energy upgrades.
There is no legitimate reason to allow mortgagees to block PACE loans for energy upgrades. Property tax default rates are low, and properties that have undergone PACE upgrades have an even lower than average default rate.[iv] Equally important, according to a study in the Journal of Structured Finance: energy upgrades are the only renovation that yield a larger increase in property value than they cost.
This obstacle could easily be resolved by legislation, and /or by provincial governments setting up a loan loss reserve to protect mortgagees.
In the meantime, municipal councils can ask local banks and credit unions for formal commitments to automatically consent to PACE upgrades.
Encouraging private sector funding of PACE loans.
Few municipalities have the spare capital to fund PACE themselves. Some compete for federal government funds via the Federation of Canadian Municipalities (FCM), plus local government dollars and perhaps a little private capital.[v]This approach cannot provide enough money to scale. It’s great that the federal government has increased the FCM Green Municipal Fund to ~$1 billion, including a $300 million Community Efficiency Financing Plan. But it could take >$800 billion to retrofit all existing buildings across Canada.
The private sector can provide money at this scale, and is indeed eager to do so, but is having trouble finding appropriate programs to fund without excessive risk or administrative costs. PACE programs could be a good fit. They can qualify for municipal green bonds, which are finding strong market appetite at better than usual rates. An inexpensive government loan loss reserve would make these programs especially appealing, and would minimize interest rates to homeowners.
In addition, private sector funding could be at less risk of disruption by elections. Reducing political risk can improve contractor capacity, supplier capacity, customer awareness, and customer confidence.
Our Energy Guelph hopes to fill this role in Canada. If they, or a similar organization, succeed, Canadian municipalities may be able to grow their PACE programs at unprecedented speed to unprecedented size, and kick start building retrofits across the country. After all, on the road to net zero, funding building retrofits is one of the easier problems.
This article was first published in Corporate Knights, https://www.corporateknights.com/channels/built-environment/canadas-buildings-are-a-climate-drag-can-they-pick-up-the-pace-16230600/
[i] In some cases, utility savings make retrofits cost neutral to the homeowner. The owner also receives improved comfort, higher resale value, and reduced capital equipment costs, and knows they are doing something about our greatest crisis.
[ii] This is important since the average homeowner moves every few years, while deep retrofits can take a decade or more to pay back. The purchaser automatically takes over the loan obligation.
Last week, a blockbuster report from the International Energy Agency (IEA), Net Zero by 2050, confirmed that virtually everything Doug Ford has done on energy policy is taking us in the wrong direction.
This is a big deal. You know the tide is turning when mainstream energy organizations, like the IEA, long dominated by oil and gas, are calling on governments to immediately stop investments in oil and gas. The path to Net Zero by 2050, to give the world a chance to keep global heating below 1.5˚C, “requires immediate and massive deployment of all available clean and efficient energy technologies” and stopping new investments in fossil fuels. Doug Ford’s Conservatives have done exactly the opposite.
What we need
What Ford’s Conservatives have done instead
rapid scaling up of solar and wind power
cancelled 752 clean power projects, mostly solar and wind, driving solar and wind companies out of the province
limiting the burning of fossil gas
poured public money into making more dirty electricity from fossil gas
slashed energy efficiency programs
spent $30 million in a losing fight against carbon pricing
60% of all new vehicles electric by 2040
Cancelled incentives to buy electric vehicles, tore out EV charging stations at Metrolinx stations
major investments in new clean technologies
cancelled much of Ontario’s funding for new clean technologies
Reduce highway speeds
Increased highway speeds
Renewable energy is cheaper, more feasible and more accessible than ever before. The net zero transition can create millions of good jobs and improve air quality and human health.
But, because of Doug Ford and his Conservatives, Ontario is going in the wrong direction. We’re missing out on a huge economic opportunity and the chance for good, clean jobs that will benefit the future of Ontarians and the planet.
I am keeping up a regular schedule of climate talks, all on zoom these days. Two popular climate talks are trying out policy options through the #En-ROADS climate simulator, and an Introduction to Carbon Pricing in Ontario. You can join an En-ROADS climate talk workshop at next week’s PPX symposium, or watch a pre-recorded one at Climate Interactive. The slides from my May 19, 2021 climate talk on #carbonpricing are here. Let me know if you’d like me to speak to your group.