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Federal budget offers supports for infrastructure, electric vehicles, LNG


TORONTO, Ont.–Federal Finance Minister Bill Morneau’s first budget tabled Tuesday is aimed tax cuts and programs for the “middle class”, battling climate change though green technology and carbon pricing, and boosting infrastructure for cities.

Below are some of the main highlights of the 2016 Budget as they could relate to transportation:

Infrastructure / Green Initiatives 

The government plans to invest more than $120 billion in total infrastructure, including transit funding and programs to combat GHG emissions, over 10 years in two phases.

Budget 2016 proposes to invest $5 billion over the next five years in infrastructure that “protects communities and supports Canada’s ongoing transition to a clean growth economy,” including investments in electric vehicle and alternative transportation fuel infrastructure.

The budget sets aside $62.5 million over two years, starting in 2016–17, to Natural Resources Canada to support the deployment of infrastructure for alternative transportation fuels, including charging infrastructure for electric vehicles and natural gas and hydrogen refueling stations. The government says it will advance these objectives by working with provinces and territories, municipalities and the private sector.

“Early action is needed to support the transition to low-carbon transportation fuels, as vehicle choices made today will determine the mix of technologies on the road in 2030,” the budget stated.

The budget refers to tax support for clean vehicles, although only electric vehicles and natural gas facilities – not natural gas engines – are specifically mentioned. Budget 2016 proposes to expand eligibility for accelerated capital cost allowance (CCA) in electric vehicle charging and electrical energy storage. The budget also reiterates the CCA allowance currently available for certain liquefied natural gas (LNG) facilities.

(The language in the budget as it relates to electric and LNG did not specifically refer to commercial vehicles. The Canadian Trucking Association said is engaging in discussions with the federal government on how this funding can help support and expedite alternative, green power for commercial vehicles into the market place.)

The budget also proposes $2.9 billion over five years to support the development of  a “Low Carbon Economy Fund.” Pricing carbon, states the budget, will be a key element to transitioning  to a low carbon economy.

The budget also includes $75 million to support  “municipalities’ front-line efforts” to address climate change, to be delivered by the Federation of Canadian Municipalities as well as $125 million over the next two years to the Federation of Canadian Municipalities to enhance the Green Municipal Fund. These investments  are aimed municipality-led projects to identify and implement GHG reduction opportunities and municipal green infrastructure projects.

There were no specific funding details in the budget for highways or bridge infrastructure, except to say that the government aims  “to deliver fast, efficient trade corridors that allow Canadian exporters to benefit fully from international trade.” It notes “ambitious projects will be supported to reduce urban transportation congestion, improve and expand trade corridors, and reduce the carbon footprint of the national energy system.”

 

This budget makes a general mention of border infrastructure support. It states: “Budget 2016 proposes to provide $3.4 billion over the next five years, on a cash basis, to maintain and upgrade federal infrastructure assets such as national parks, small craft harbours, federal airports and border infrastructure.”

Vehicle Technology / Manufacturing

Budget 2016 proposes to provide $7.3 million over two years to increase inspection capacity and support the development of a regulatory framework for emerging vehicle technologies, such as automated vehicles. The budget also announces the elimination of  tariffs on about a dozen manufacturing inputs, providing an estimated $9 million in tariff savings over the next five years to Canadian manufacturers in the consumer goods and transportation sectors. Moreover, the budget extends the Automotive Innovation Fund, which is currently scheduled to sunset at the end of 2017–18, through to the end of 2020–21.

TDG RAIL SAFETY:  $143 million over three years to sustain existing measures and support new and expanded activities to strengthen oversight and enforcement, and to enhance prevention and response capabilities related to rail safety and the transportation of dangerous goods.

FERRY FLEET RENEWAL: Budget 2016 proposes to waive the 25 per cent tariff on ferries of all sizes imported after October 1, 2015. This will provide an estimated $118 million in duty savings over six years, allowing, the government adds, ferry operators to reinvest the savings in their fleet renewal plans, enhance ferry services and reduce fares for passengers and commercial users.

SKILLS AND TRAINING: Budget 2016 proposes additional investments in skills training such as an additional $125 million in 2016–17 for the Labour Market Development Agreements, and an additional $50 million in 2016–17 for the Canada Job Fund Agreements. Also, $85.4 million over five years to develop a new framework to support union-based apprenticeship training.