Federal Budget 2021: What it holds for climate adaptation

The 2021 federal budget, one of the largest in recent years in terms of dollar size and document length, was released by the Government of Canada yesterday. What does it do to advance climate adaptation, particularly when adaptation faces a “funding deficit” as per the 2020 report “Tip of the Ice Berg: Navigating the Known and Unknown Costs of Climate Change in Canada”. This work by the Canadian Centre for Climate Choices recommends that all public sectors should anticipate the need to “significantly scale up adaptation investment.”

Federal Budget 2021 is not yet hitting that scale-up. But with the December 2020 announcement of a National Adaptation Strategy to come, there will yet be an opportunity to align, elevate and grow investment in climate change adaptation federally. For now, here’s what Budget 2021 offers.

A number of commitments belong under the heading of “investing in better decision-making.” Most of it continues work already underway. There is funding to:

• Ensure that the Standards Council of Canada can continue its work upgrading guidance, codes and standards such that they take into account a changing climate (e.g. extreme weather). This is necessary as so much physical infrastructure (e.g. roads, bridges, storm water systems, electricity grids) have long lifespans that will face not-yet-seen stressors due to weather and climate. VALUE: $11.7M over 5 years.
• Continue ongoing flood mapping especially for higher-risk areas. Reliable and updated flood maps are a key tool for community planning. This has been ongoing process (involving several federal departments & provincial/territorial governments) and is overdue. VALUE: $63.8M over 3 years.
• Invest in the process to create the Canada Water Agency (hey, 12 years after its shut down, the Prairie Farm Rehabilitation Administration got a shout out in the budget!). The CWA will hopefully improve collaborative decision-making for water management across Canada but in the Prairie-region especially (see: irrigation). Consultations still open. VALUE: $17.4M over 2 years.
• NEW(ISH): ECCC is getting money to officially develop a “climate lens” for all federal government decision-making. This could be transformative if it means every decision weighs not only its impact on emissions, but contribution to adaptation and adaptive capacity. Maybe other provincial/territorial governments will borrow this approach, too. VALUE: $36.2M over 5 years.

Second type of adaptation-focused funding offers some good news for communities and their green spaces, including smaller ones:

• The Disaster Mitigation & Adaptation Fund gets new money (an infrastructure fund that fits a good niche but its future was previously uncertain), AND minimum project costs are dropping from $20M to $1M – in the past the high threshold had kept smaller communities with less expensive projects from accessing DMAF dollars. While the magnitude of dollar begins with a “b” for billion, it is spread over a long time. From an equity design perspective, 10% is designated for Indigenous communities, many who do have significant infrastructure needs vis-à-vis disaster and mitigation. VALUE: $1.4B over 11 years.
• NEW: Infrastructure Canada will establish a Natural Infrastructure Fund to “support natural and hybrid infrastructure projects” with an eye to “improve well-being, mitigate the impacts of climate change and prevent costly natural event.” Good news for green spaces, parks – but details of fund eligibility, etc, all still to come. VALUE $200M over 3 years.

An exciting subset of the budget’s climate investments hones in for on-farm investments. These could offer co-benefits for both emissions-reduction AND adaptation. Hopefully that latter point does not get lost, as the emissions-angle is what the budget emphasizes:

• NEW: A commitment for more immediate dollars under the Agriculture Climate Solutions Program to target “on-farm” projects that improve nitrogen management, increase cover cropping and normalizing rotational grazing. Boosting soil health can improve water retention and boost resilience in face of excess or limited moisture. Props to the coalition advocacy efforts of Farmers for Climate Solutions in pushing for this investment! VALUE $200M over 2 years.
• Farms may also benefit from the nascent Nature Smart Climate Solutions Fund (different than the Natural Infrastructure Fund) with committed funds targeting “protection of existing wetlands and trees on farms, including through a (policy innovation alert!) reverse auction pilot program.” VALUE: $60M over 2 years.

And here’s the remaining grab bag of other climate adaptation-related funding announcements:

• More money to Public Safety Canada to support provincial and territorial disaster response and recovery (typically extreme weather, floods or wildfire plays a role here). VALUE: $1.9B over 5 years.
• Enhance wildfire preparedness in Canada’s National Parks. VALUE: $100.6M over 5 years.
• Support for mapping wildfire risks across parts of Northern Canada. VALUE: $28.7M over 5 years.

Lastly, there was one last set of announcement worthy of note. None of them had any dollars attached to it, yet they signal a future need for deeper investments in climate modelling, climate data and their effective translation to the applied world of “risk disclosure” among businesses across the country in all many of sectors:

• The federal government will engage provinces and territories, with the objective of making climate disclosures (a la the Task Force on Climate related Financial Disclosures or TCFD) part of the regular disclosure for a “broad spectrum of the Canadian economy.”
• Canada’s Crown corporations will demonstrate climate leadership by adopting the Task Force on Climate-related Financial Disclosures standards (or more stringent ones).
• In addition, recognizing the importance of nature, the Government of Canada is joining the Task Force on Nature-related Financial Disclosures. The Task Force is developing a framework for corporations and financial institutions to assess, manage, and report on dependencies and impacts on nature.

The World Resources Institute, an international and well-respected think-tank, in a Februrary 2021 working paper flagged even with the leadership of the TCFD, there remains an “absence of a shared robust understanding and approach to identifying and assessing physical climate risks.” The paper notes that such a gap is solvable with more accessible translation of climate science, more accessible, practical, and open-source scientific datasets on climate-related hazards, and an open-source, science-based physical climate risk assessment framework.

In short, there will be lots of work for climate service providers, like ClimateWest, and a wider ecosystem of researchers and regulators, among others. And, hopefully over time, growing investment to cope with climate change risk.