Bonjour. I'll do my presentation in French, but I'll be more than happy to answer questions in both languages.
My name is Jean-François Nolet. I am the Quebec and Atlantic Canada Policy Manager with the Canadian Wind Energy Association. I am here to speak on behalf of Robert Hornung, President of CanWEA. I would like to thank the committee and its honourable members for the opportunity to speak on behalf of the wind energy industry in these important consultations.
The federal government has played a critical role in stimulating the development of the wind energy industry in Canada, most recently through the ecoENERGY for Renewable Power program. This enormously successful program was designed to stimulate the deployment of 4,000 MW of renewable energy in Canada by March 31, 2011 and will meet its objectives and fully allocate all of its funding by fall 2009, 1.5 years ahead of schedule. Unfortunately, the federal government has not yet made a commitment to expand or extend the program, or to establish any alternative support mechanism for wind energy deployment. In other words, federal government support for new renewable power projects in Canada will end in this fall.
An end to federal support for wind energy deployment in fall 2009 has serious implications for Canada's wind energy industry during this time of economic crisis. It will lead to delays and cancellations for many of the 2,000 MW of "shovel ready" wind energy projects that are contracted to be built in Canada by the end of 2011. It will also reduce Canada's ability to compete for investment with the United States, which has taken aggressive actions in 2009 to stimulate investment in renewable power, and will cause investment dollars to leave Canada for the U.S.
CanWEA is asking the federal government to take action in a fall economic statement (and certainly no later than a 2010 federal budget) to support the deployment of an additional 8,000 MW of new renewable power capacity in Canada by March 31, 2014. This would result in $22 billion of private sector investment (a minimum of $7 billion of it invested in Canada, 8,000 new Canadian jobs, and $24 million in annual lease payments to rural landowners across Canada.
The federal government could deliver this support through either of two policy options. The first to expand and extend the existing ecoENERGY for Renewable Power Program. Between now and 2014, the total cost to the federal government would be $600 million, $150 million a year, and would leverage the full $7 billion of private sector investment in Canada in that period. Beyond 2014, the federal government would make annual expenditures of $230 million for 10 years.
The second option is to replace the ecoENERGY for Renewable Power Program with a capital grant program that would provide equivalent economic value. The total cost to the federal government of this approach would be $1.8 billion between now and 2014, $450 million a year, and would leverage the full $7 billion of private sector investment in Canada in that period. There would, however, be no additional costs to the federal government beyond the year 2014.
It is important that any actions taken by the federal government, like the options proposed above, are broadly applicable across the full diversity of the wind energy industry in Canada, including: large traditional Canadian energy companies, wind energy project developers from outside of Canada, small renewable energy companies, and organizations as diverse as community groups, First Nations, and municipal governments.
In this regard, one important additional measure the federal government could take to complement an expansion of the ecoENERGY program or a new capital grants program would be to broaden the applicability of Class 43.2 of the Income Tax Act. At this time, the design of this tax measure ensures that most wind energy developers in Canada (e.g., foreign companies, smaller Canadian companies) cannot make immediate use of this incentive to support their wind energy investments.
In summary, an end to federal support for wind energy deployment in fall 2009 will lead to delays and cancellations of "shovel ready" wind energy projects and will reduce Canada's ability to compete for new investment. The federal government must take action now to support the deployment of an additional 8,000 MW of new renewable power capacity in Canada by March 31, 2014 through either of the two options I described earlier.
Thank you.