Chapter 6 - Areas for Further Exploration

These next steps include a range of additional tax measures relating to renewable fuels and the energy efficiency of dwellings and vehicles; further research on the impact of freight transportation on urban environmental quality; and the exploration of mechanisms within and among governments to ensure a more coherent approach to urban sustainability in general.

Additional fiscal measures

Establish R-2000 standards and incentives for retrofits

Establishing an R-2000 standard for retrofits would help to improve the energy efficiency of older housing stock. As outlined in the National Climate Change Program’s Buildings Table Options Report,⁶⁷ this would require development of an R-2000 retrofit guideline, training and certification of R-2000 retrofit contractors, independent evaluation and certification of R-2000 retrofits, program marketing, and possibly financial incentives. Once developed and in place, this new standard could be used to judge eligibility for the GST rebate for energy efficiency renovations proposed above (see Recommendation 9, page 40).

Restructure tax on vehicles according to emissions and explore more comprehensive and rigorous mechanisms to discourage the purchase of SUVs and light trucks

Taxes on vehicles should be restructured to reflect the degree of the vehicle’s impact on the environment. Heavy-polluting vehicles, such as SUVs and light trucks, are a significant and fast-growing contributor to GHG emissions and should be more actively discouraged.

More rigorous emissions controls should be the immediate first step. But a more eco-rational tax regime—structured according to vehicle fuel efficiency or kilometres driven, for example—could reinforce the message. This could be achieved by introducing new tax measures, such as a new vehicle emissions surcharge, or by modifying any or all of several existing measures, such as the GST, the Heavy Automobile Tax and the gas tax. Likewise, the GST on low-emission vehicles could be reduced or eliminated to encourage higher levels of take-up.

Provide tax incentives for the use of renewable fuels

The federal government has recently begun to introduce incentives for the production of energy from renewable sources (e.g., the Wind Power Production Initiative). However, there are no parallel incentives to spur the demand for renewable energy. Such energy can be more expensive until market sizes grow to the point where economies of scale start to lower costs.

Develop environmental performance standards for municipal infrastructure

As noted above, there are no commonly recognized standards that indicate how various types of municipal infrastructure perform from an environmental perspective. Such a set of standards—similar perhaps to the EnergyStar system but assessing environmental impacts beyond just energy use—would be extremely effective, given the scale of investments in municipal infrastructure needed in the coming years.

Priority areas for further research

Explore the impact of freight transportation

Parallel with the recent explosion in the use of SUVs and light trucks is the fast-growing contribution of freight transportation, particularly truck transport, to energy use and GHG emissions. Yet relatively little is known about truck transport, particularly in relation to urban areas. Truck transport is rapidly becoming a significant urban environmental problem with global repercussions, warranting more research to develop sound policy responses.

A more coherent approach to urban sustainability

As powerful as fiscal policy can be in improving the quality of the environment in Canada’s cities and beyond their borders, it is only one part of a comprehensive approach. The NRTEE recognizes that more effective coordination and cooperation within the federal government, among federal, provincial and municipal governments, and with the private sector is an essential part of improving environmental quality and ensuring more effective use of tax policy and program spending.

Develop a national urban strategy

There is growing recognition of the role the federal government plays—deliberately and unintentionally —in shaping cities and urban environmental quality. This federal role needs to be made more strategic, coherent and coordinated. As noted in the Sgro report, a national urban strategy is needed. Beyond outlining the federal government’s approach to the sustainability of Canada’s cities, such a strategy should include a comprehensive framework for implementing fiscal policy in support of improved urban environmental quality. The recommendations put forth in this report could be the starting point for the development of this framework.

Establish mechanism(s) for coordinating action within the federal government and among governments

The Round Table heard considerable support for a mechanism or mechanisms to coordinate and advocate efforts across federal government departments and agencies to improve urban sustainability. There was also support for introducing a mechanism for working with provincial and local governments on urban sustainability. Precedents for multi-level coordination could be explored for their applicability. The Vancouver Agreement, for example, coordinates different federal
departments and provincial and municipal agencies to improve conditions in Vancouver’s Lower East Side. The Supporting Communities Partnership Initiative, with a focus on homelessness, is another example of multigovernmental coordination.⁶⁸ The potential role of existing coordinating mechanisms, such as the federal councils that coordinate multidisciplinary federal programs on a regional basis, could also be explored.

Endnotes

67 National Climate Change Program (Marbek Resource Consultants in association with Sheltair Scientific and SAR Engineering), Buildings Table Options Report, Residential Sector, Final, revised November 15, 1999.

68 Budget 2003 extended funding for the Supporting Communities Partnership Initiative for another three years at $135 million per year.

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