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December 16, 2003 (Globe and Mail)

PM's green credentials are fading

What shade of green?

What famous Canadian said: "we will need to abandon the very concept of waste" by shifting from a linear economy, with waste and pollution as end products, to a closed-loop system, patterned after nature, where no waste or pollution is generated? The eye-opening answer is that Canada's new Prime Minister, Paul Martin, made this statement in a speech to the Federation of Canadian Municipalities in 2000.

Canadians can be forgiven for not knowing that Paul Martin probably has a greater knowledge of environmental issues than any prime minister in Canadian history -- because Mr. Martin has been largely silent on this front during his protracted journey to the Prime Minister's Office.

However, back when the Liberal Party was in opposition, Paul Martin was an effective and outspoken environment critic. He advocated using environmental regulations to promote industrial competitiveness. He called for environmental taxes to correct market failures. He lambasted the Mulroney government's weak environmental policies. He attended the Rio Earth Summit in 1992. He was one of the authors of the environmental promises in the Liberal Party's 1993 Red Book. One of his closest advisers is Maurice Strong, the renowned environmentalist. Mr. Martin is familiar with visionary works like Paul Hawken's Natural Capitalism and Jeremy Rifkin's The Hydrogen Economy.

Despite Mr. Martin's expertise on environmental issues, there is a troubling gap between his words and his actions. His company, Canada Steamship Lines, was caught dumping oil off the East Coast, convicted, and fined $125,000 in 2002. CSL depends heavily on shipments of coal, the dirtiest of the fossil fuels in causing air pollution and climate change.

The Liberals compiled a dismal environmental record from 1993 to 2000. While it would be unfair to place all of the blame on Paul Martin, he was a senior cabinet minister in a powerful portfolio. In eliminating the federal deficit, Mr. Martin imposed disproportionate budget cuts on environmental departments.

Environment Canada saw its budget slashed by more than 30 per cent. The Department of Fisheries and Oceans lost 33 per cent of its funding. Parks Canada saw its budget fall by 40 per cent. The Canadian Forestry Service was cut 57 per cent. Most of the promised funding for implementing Canada's ballyhooed $3-billion Green Plan never materialized.

Despite advocating environmental taxes and the elimination of harmful subsidies while in opposition, Mr. Martin largely ignored those fiscal tools when he had the opportunity, as finance minister, to use them. He failed to implement the committee on business taxation's recommendation to replace the federal fuel tax (which favours diesel over gasoline, despite the former being a dirtier fuel, and ignores coal and oil altogether) with a broader, environmentally based energy tax.

The failure to use fiscal tools to reshape Canada's economy is one of the major reasons why Canada's environmental record now lags behind that of many European countries.

Not until after Mr. Martin left cabinet did the Liberals pass three long-awaited laws -- to protect endangered species, reduce the harmful effects of pesticides and create marine protected areas -- to ratify the Kyoto Protocol and to create a handful of new national parks. Only after Mr. Martin left cabinet did the Liberals begin to restore funding to environmental programs and enforcement.

To Mr. Martin's credit, in the 2000 budget he allocated almost $10-million to the development of natural capital accounts for Canada, to measure the environmental impacts of activities in the natural-resource sectors. He claimed that the development of these indicators "could well have a greater impact on public policy than any other single measure we could introduce." Whether that bold prediction comes true will depend on what indicators are chosen and to what extent they are incorporated in government decision-making.

Mr. Martin created the Green Municipal Fund, directing federal money toward environmentally friendly urban infrastructure. He also reduced some federal subsidies to the fossil-fuel industry, creating a double dividend of economic and environmental benefits. However, non-renewable energy still enjoys tax advantages over renewable energy, and nuclear energy still gets hundreds of millions of dollars in annual subsidies.

Paul Martin is reputed to enjoy tackling thorny policy issues. Restoring the lustre to Canada's tarnished environmental reputation will be a difficult challenge, but it should be a top priority for our new Prime Minister.

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