Municipalities are advancing ambitious Climate Action Plans to advance science-based greenhouse gas reduction targets and identifying actions to reduce climate impacts on the community. As municipalities have limited revenue streams, finding new and innovative ways to fund their efforts to combat climate change is becoming increasingly important. One solution that has gained popularity in recent years is the climate/environmental levy, which allows municipalities to fund their climate actions through a property tax increase.
In a recent webinar presented by Clean Air Partnership, the cities of Peterborough, Ontario, and Halifax, Nova Scotia, were highlighted as examples of how a climate levy can be used effectively.
Peterborough’s journey to adopting a climate levy started in 2004 after a devastating flood caused over $96 million in damages. This event was the catalyst for the city’s commitment to addressing climate change and led to the development of their Flood Reduction Master Plan and Climate Action Plan. In 2020, Peterborough added a 0.25% all-inclusive tax rate, which added $426,400 to the City’s Climate Change Reserve annually. This reserve has already funded several important climate initiatives, including:
• Electric vehicle charging station ➢ $282,800
• Alterative Transit Fuel Study ➢ $250,000
• Net-Zero Fire Hall Project ➢ $100,000
• FCM’s Decarbonization Pathway Feasibility Study ➢ $50,000
• Staff position
Halifax, with a population of almost half a million residents, approved a Climate Action Plan in 2020 with the goal of becoming net zero by 2030. To achieve this, the city council approved a dedicated 3% property tax increase to fund the Climate Plan for a minimum of 10 years. This tax is building a reserve, collecting $18 million annually to finance upfront investments and to service debt going forward. The funding will be used to finance energy retrofits, electric vehicle initiatives, and critical infrastructure projects. The success of this initiative was attributed to the support of the finance department, which helped showcase these climate actions as an investment. Community climate awareness and public engagement also played a vital role to gain community support.
Municipal climate levy presents a powerful tool for local governments to fund their climate actions. By taking a closer look at the examples of Peterborough and Halifax, we can see the benefits of this approach and how it can be used effectively to advance municipal climate action. If you would like to learn more, you can watch the full webinar recording here.
By Desi Stefanova, Outreach Manager, Clean Air Partnership