By Will Weissert in Washington
WASHINGTON (AP) — President Joe Biden ordered emergency measures Monday to boost crucial supplies to U.S. solar manufacturers and declared a two-year tariff exemption on solar panels from Southeast Asia as he attempted to jumpstart progress toward his climate change-fighting goals.
His invoking of the Defense Production Act and his other executive actions come amid complaints by industry groups that the solar sector is being slowed by supply chain problems due to a Commerce Department inquiry into possible trade violations involving Chinese products. Word of the White House’s actions caused solar energy companies to gain ground on Wall Street.
The Commerce Department announced in March that it was scrutinizing imports of solar panels from Thailand, Vietnam, Malaysia and Cambodia, concerned that products from those countries are skirting U.S. anti-dumping rules that limit imports from China.
Asked at the White House if Biden’s pause in tariffs was not a gift to China, press secretary Karine Jean-Pierre said he was invoking the Defense Production Act, “to make sure that he’s delivering for the American people.”
“He is putting the full force of the federal government behind supporting American clean energy producers,” Jean-Pierre said.
White House officials said Biden’s actions aim to increase domestic production of solar panel parts, building installation materials, high-efficiency heat pumps and other components including cells used for clean-energy generated fuels. They called the tariff suspension affecting imports from Thailand, Vietnam, Malaysia and Cambodia a bridge measure while other efforts increase domestic solar power production — even as the administration remains supportive of U.S. trade laws and the Commerce Department investigation.
Commerce Department Secretary Gina Raimondo told a Senate panel in May that the solar inquiry is following a process set by law that doesn’t allow consideration of climate change, supply chains or other factors. She said Monday that she remains “committed to upholding our trade laws and ensuring American workers have a chance to compete on a level playing field.”
“The president’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments,” Raimondo said in a statement.
Clean energy leaders have long warned that the investigation — which could result in retroactive tariffs of up to 240% — would severely hinder the U.S. solar industry, leading to thousands of layoffs and imperiling up to 80% of planned solar projects around the country.
The department counters that rates exceeding 200% for solar products would not apply to the vast majority of imports. They instead typically apply to uncooperative companies that cannot differentiate themselves from China’s government or Communist Party.
Still, any possible punishment might have jeopardized one of Biden’s top clean energy goals and run counter to his administration’s push for renewable energy such as wind and solar power, advocates argue.
“The president’s announcement will rejuvenate the construction and domestic manufacturing of solar power by restoring predictability and business certainty that the Department of Commerce’s flawed inquiry has disrupted,” Heather Zichal, CEO of the American Clean Power Association and a former Obama administration official, said in a statement Monday.
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, cheered Biden’s “thoughtful approach to addressing the current crisis of the paralyzed solar supply chain.”
“Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home,” Ross Hopper said in a statement.
But not everyone in the industry was supportive.
First Solar Inc., a major solar panel manufacturer, said that freezing tariffs would grant “unfettered access to China’s state-subsidized solar companies for the next two years” and that using the Defense Production Act is “an ineffective use of taxpayer dollars and falls well short of a durable solar industrial policy.”
“The administration cannot stick a Band-Aid on the issue and hope that it goes away,” Samantha Sloan, the company’s vice president of policy, said in a statement.
The use of executive action comes as the Biden administration’s clean energy tax cuts, and other major proposals meant to encourage domestic green energy production, have stalled in Congress.
The Defense Production Act lets the federal government direct manufacturing production for national defense and has become a tool used more commonly by presidents in recent years. The Trump administration used it to produce medical equipment and supplies during the early stages of the coronavirus pandemic.
Biden invoked its authority in April to boost production of lithium and other minerals used to power electric vehicles. Last month, he used it again to prioritize boosting the nation’s supplies of baby formula amid a domestic shortage caused by the safety-related closure of the country’s largest formula factory.
Jean Su, director of the Center for Biological Diversity’s energy justice program, said in a statement that Biden’s announcement can “give critical momentum to the needed transition to solar energy.”
“We hope this use of the Defense Production Act is a turning point for the president, who must use all his executive powers to confront the climate emergency head on,” Su said.
Federal departments failed to spend $38B on promised programs, services last year
By Lee Berthiaume in Ottawa
The federal government failed to spend tens of billions of dollars in the last fiscal year on promised programs and services, including new military equipment, affordable housing and support for veterans.
Federal departments are blaming a variety of factors for letting a record total of $38 billion in funding lapse in 2021-22, including delays and disruptions caused by the COVID-19 pandemic.
They also say much of the money remains available for future years.
The unspent funds also played a big part in the Liberal government posting a smaller-than-expected deficit in the year ending March 31, 2022.
Canada rang up a $90.2 billion deficit — $23.6 billion less than had been projected in the budget.
The unprecedented amount of lapsed funding, much of which has been returned to the federal treasury, has one observer suggesting it is a sign of long-standing challenges delivering on big federal projects for the country.
The amount of lapsed funds across government is spelled out in the most recent iteration of the public accounts, a report on federal revenues and spending by every department and agency tabled in the House of Commons every year.
The $38.2 billion that was reported as lapsed in the last fiscal year marks a new record over the previous year, which was $32.2 billion. That was a dramatic increase over the previous record of $14 billion in 2019-20.
That compares to around $10 billion about a decade ago, when Stephen Harper’s Conservative government was accused by political opponents and experts alike of using large lapses to make cuts by stealth.
Health Canada and the Public Health Agency of Canada reported the largest lapses of all departments and agencies, with nearly $11.2 billion of their combined $28.2 billion budgets going unspent.
Much of that had been set aside for COVID-19 initiatives that were not needed, said Health Canada spokeswoman Tammy Jarbeau. Those include vaccines, personal protective equipment and rapid tests.
“Both Health Canada and the Public Health Agency of Canada have rigorous internal financial management controls designed to prevent, detect and minimize errors and financial losses, and ensure the funding is spent in the best interests of Canadians,” she wrote in an email.
The pandemic figured in the responses and explanations from many other departments and agencies, with many blaming COVID-19 for delays.
One of them was the Defence Department, which reported a lapse of $2.5 billion in the last fiscal year. Much of the money wasn’t spent due to delays in the delivery of new military equipment such as Arctic patrol vessels and upgrades to the Army’s armoured vehicles.
There were also delays on major infrastructure projects for the military, according to Defence Department spokeswoman Jessica Lamirande. Those include upgrading and rebuilding two jetties for the Navy in Esquimalt, B.C., and a new armoury in New Brunswick.
“The COVID-19 pandemic has had a significant impact on many of our business lines,” Lamirande said.
“The impacts of the pandemic on supply chain and industry capacity are causing manufacturing backlogs and delays.”
Lamirande added most of the unspent funds are expected to be available in future years through a process called reprofiling, in which schedules are revised to reflect planned spending in future years due to those delays.
Former parliamentary budget officer Kevin Page said the government’s handling of lapsed funding now is “a little more relaxed” than in previous years, when unspent funds were not reprofiled and even used to justify budget cuts in Ottawa.
But defence analyst David Perry of the Canadian Global Affairs Institute said the Defence Department’s lapse, which has been steadily growing in recent years, is a symptom of Ottawa’s continued difficulties purchasing new military equipment.
“If we’re not getting those procurement projects through, we’re not getting new equipment into the inventory, so we don’t actually have the gear for our troops,” he said, noting many of the delayed projects were launched under the Harper government.
Perry also noted the current rate of inflation, which is already naturally higher for military equipment and the defence sector than most other parts of the economy. Not spending money now means Canada will have to pay more for the same gear and services later, he said.
The Infrastructure Department, the Canadian Mortgage and Housing Corp. and the Fisheries Department, which includes the Canadian Coast Guard, also reported delays with different capital projects, including on affordable housing and broadband internet.
“Due to the unprecedented circumstances over the last few years such as the COVID-19 pandemic, disbursing funds to proponents for many projects are expected to and will take longer,” CMHC spokeswoman Claudie Chabot said in an email.
Perry suggested a bigger problem.
“The government of Canada’s ability to actually deliver services to the public, especially when it comes to large projects, large capital projects, be it for equipment or infrastructure or IT projects, is struggling across the board,” he said.
Other federal entities with large lapses included Indigenous Services Canada, which failed to spend $3.4 billion, and Crown-Indigenous Relations and Northern Affairs Canada, which reported a lapse of $2.2 billion.
Spokesman Vincent Gauthier attributed much of the latter lapse to “the timing and progress of negotiations for specific claims and childhood litigations,” adding that funds will available “in some instances” in future years.
Gauthier did not say why Indigenous Services, which is responsible for delivering federal services to First Nations, Inuit and Métis, failed to spend billions of dollars. He did say most of the money had been reprofiled “so that it will be available when recipients need it.”
Veterans Affairs Canada also reported a nearly $1 billion lapse last year, which the department blamed on fewer ill and injured ex-soldiers applying for assistance than expected.
However, critics have described earlier lapsed funding as evidence of the challenges many veterans face in accessing benefits and services. In 2014, the Royal Canadian Legion demanded the Harper government explain why $1.1 billion went unspent over seven years.
This report by The Canadian Press was first published Jan. 30, 2023.
Alberta budget set for Feb. 28, with focus on funding for health, school growth
By Dean Bennett in Edmonton, Alberta, Canada
Alberta Finance Minister Travis Toews says the United Conservative Party government’s 2023 budget will be delivered on Feb. 28, the first day of the spring legislature sitting.
Toews said Friday it will focus on investing in health care and school enrolment growth.
It’s expected to be the final budget before voters go to the polls for a scheduled May 29 general election.
Alberta’s fortunes, powered mainly by energy revenues and further diversification of its economy, have been on the upswing since the global economy began rebounding from the COVID-19 pandemic.
Last fall, Toews announced the current budget year, which finishes at the end of March, is expected to record a $12.3-billion surplus.
That surplus comes even with $2.8 billion being set aside over the next three years to cover inflation-fighting programs and payouts to shield Albertans — particularly families, seniors and the vulnerable — from higher costs.
Toews said while energy prices remain volatile, the outlook is for them to stay strong.
“This budget will reflect the fact that health care is a priority, that health care capacity is a priority, ” said Toews in an interview.
“Alberta is leading the nation on net-inflow migration,” he added.
“Our population is growing. Our enrolment in our K-12 education system is growing, and the budget will reflect that good news story with additional enrolment growth.”
One outstanding question after the budget will be whether Toews will run again in the May vote.
He is a first-term UCP member representing Grande Prairie-Wapiti.
Toews declined to say whether he has made a decision.
“I’ll have more to say on that one later,” he said, “I’m focused on preparing the budget.”
This report by The Canadian Press was first published Jan. 27, 2023.
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