Federal budget season opens

By Mike Kastner, NTEA Managing Director 

This article was published in the May 2017 edition of NTEA News.

President Trump released the proposed federal budget for fiscal year 2018, and the Canadian government issued its finalized 2017 budget. The fiscal year begins April 1 in Canada and Oct. 1 in the U.S., which is operating on temporary funding as there has been no agreement on the current fiscal year budget.

The 2018 proposal from President Trump, known as the skinny budget, is a high-level outline and provides insight to the new administration’s priorities. Congress will debate and may significantly amend this proposal before a budget is finalized. The skinny budget addresses only the $1.2 trillion of discretionary spending. A more detailed proposal, including taxes and mandatory spending, is expected later in the spring.

In general, Trump’s proposal calls for increases in defense, Veterans Affairs and Homeland Security. Deepest recommended cuts are more than 30 percent at the Environmental Protection Agency (EPA) and almost as much at the State Department with the Department of Transportation (DOT) seeing a suggested 13 percent decrease.

The administration is proposing to cut more than 3,200 EPA jobs and 50 programs, including SmartWay and much of the vehicle emissions testing capabilities.

At DOT, the TIGER grant program that funded numerous road and transit initiatives may be cut by $500 million. At the same time, the administration committed to reforming and increasing infrastructure spending and is calling for a multi-year, trillion-dollar program.

The 2017 Canadian budget pulls back from the previous year’s spending. This may be partly due to uncertainty over future U.S. and Canadian relations, which could affect the nation’s economy.

Alternative fuels, technology and infrastructure
The 2016 budget included $62.5 million to support deployment of alternative fuel refueling infrastructure. Budget 2017 builds on that with $120 million to deploy infrastructure for electric vehicle charging and natural gas and hydrogen refueling stations, as well as to support technology demonstration projects. New funds will start flowing after 2016 budget funds have been disbursed.

At the provincial level, Quebec’s 2017 budget renewed the Programme Écocamionnage which provides incentives to encourage conversion of vehicle fleets.

Budget 2017 reflects a continued government focus on supporting economic growth through major infrastructure investments, including:

  • Public transit funds of $20.1 billion over 11 years through bilateral agreements with provinces and territories;
  • Infrastructure Canada to fund $300 million over 11 years to support the Smart Cities Challenge, designed to help cities find ways to reduce emissions; and
  • National Trade Corridors Fund targeting congestion and inefficiencies at marine ports such as Vancouver and Montréal as well as along the busiest rail and highway corridors across the country. About $2 billion is allocated over 11 years to support the Fund’s activities, and an additional $5 billion will be provided through Canada Infrastructure Bank (expected to be operational in 2017).

Energy-efficient transportation sector
Budget 2017 includes $17.2 million over five years, starting in 2017–2018, to Environment and Climate Change Canada and Transport Canada to develop and implement heavy-duty vehicle retrofit and off-road regulations, as well as a clean fuel standard to reduce emissions from fuels used in transportation, building and industrial sectors.

Clean technologies
Clean technologies form part of the overall innovation strategy. Measures announced in the 2017 budget are:

  • Funding of $400 million through Sustainable Development Technology Canada (SDTC) to recapitalize SD Tech Fund, the flagship program that supports development and pre-commercial demonstration of clean technologies;
  • Funding of $229 million for Natural Resources Canada and Transport Canada to continue research and development activities through its core clean energy and clean transportation innovation programming; and
  • Funding of $14.5 million for Natural Resources Canada and Innovation, Science and Economic Development Canada to establish a Clean Technology Data Strategy.

Pan-Canadian framework to address climate change
The Low Carbon Economy Fund (totaling $2 billion) is in place to help support provincial and territorial actions that reduce greenhouse gas emissions. More details will be announced at a later date. Other measures include:

  • Funding of $56.9 million over four years starting in 2018–2019 for Transport Canada to continue developing greenhouse gas regulations in the marine, rail, aviation and vehicle sectors; and
  • Funding of $13.5 million over five years for Natural Resources Canada to provide expertise to other federal departments on the best approaches to reduce or eliminate emissions from vehicle fleets.

As the budget process moves forward and is implemented, NTEA will continue to keep members apprised of issues affecting the work truck industry.

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