Environmental protection expenditures by businesses, 2018
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Released: 2021-01-26
24%
2018
In 2018, Canadian businesses spent $9.7 billion to reduce impacts on the environment, up 15% from 2016. In Canada, 9 out of 10 businesses invested in at least one environmental protection activity.
Environmental protection expenditures can be classified as either operating expenses (for example, salaries and current goods) or capital expenditures (for example, outlays for machinery and equipment). In 2018, operating expenses (61%) accounted for the majority of environmental protection spending, with capital expenditures representing the remainder. Industries spent $3.8 billion on capital goods for environmental protection, corresponding to about 4% of their total capital expenditures.
The oil extraction industry accounts for slightly more than one-third of Canadian businesses' environmental protection expenditures
The oil and gas extraction industry spent $3.6 billion (operating and capital spending combined) in 2018, corresponding to slightly more than one-third (37%) of total environmental protection expenditures made by businesses. This places the industry at the top of the 20 industrial groups targeted by the survey. It was followed by the primary metal manufacturing industry, which spent $990 million (10%) on environmental protection, and the mining and quarrying industry, which spent $915 million (9%).
The distribution of total expenditures between operating expenses and capital expenditures can vary considerably by industry.
Chart 1
Distribution of total environmental protection expenditures by expenditure category and industry in 2018
The main environmental protection activities in terms of businesses expenditures were wastewater management ($2.4 billion), followed by solid waste management ($2.3 billion) and air pollution management ($2.3 billion). These three activities represented almost three-quarters of expenditures on environmental protection in 2018.
At the regional level, businesses located in Alberta reported the highest environmental protection expenditures, accounting for close to $3.8 billion in spending (39% of national expenditures), mainly because of the oil and gas extraction industry in this province. For both this province and this industry, spending on wastewater management represented the largest share of environmental protection activities.
Canadian businesses spend more on air pollution abatement and control than on prevention
Businesses' expenditures on air pollution management and wastewater management were also looked at in terms of expenditures made to prevent pollution (integrated processes) and expenditures made to abate and control pollution (end-of-pipe processes). Pollution prevention is the elimination or reduction of pollution generated during the production process, i.e., before pollution is created, while pollution abatement and control refer to the treatment of pollution after it is generated.
In 2018, two-thirds of air pollution management expenditures (66%) in the country were directed at pollution abatement and control, the remaining third (34%) being invested in pollution prevention. The distribution of expenditures between treating and preventing pollution can vary considerably by industry. For example, the non-metallic mineral product manufacturing industry directed 85% of its expenditures on air pollution management towards pollution abatement and control (the remaining 15% was on prevention), while this proportion was 32% for the electric power generation, transmission and distribution industry (the remaining 68% was on prevention).
A similar trend was observed for business expenditures on wastewater management: more than 6 dollars out of 10 (62%) were invested to treat pollution, while the remaining amount was spent to prevent it. The petroleum and coal product manufacturing industry invested the largest percentage of its spending (92%) in pollution abatement and control, followed by the logging industry (except contract) (89%). The oil and gas extraction industry invested the highest percentage of its wastewater management expenditures on pollution prevention (64%).
Regulation is the driver most often reported by Canadian businesses to justify the acquisition of environmental protection technologies
Certain drivers and obstacles can facilitate or prevent businesses from adopting new or improved technologies, systems and equipment related to environmental protection. In 2018, the main drivers reported were regulations (reported by 16% of businesses), corporate policy (13%) and sufficient return on investment (11%). Two-thirds of businesses reported no drivers.
In terms of reported obstacles, insufficient return on investment stood out as the main one (reported by 19% of businesses). This was followed by lack of information or knowledge related to systems or equipment (9%); difficulty in integrating new technologies with existing infrastructure, systems, standards and processes (8%); and difficulty in obtaining financing (8%). Two-thirds of businesses reported no obstacles.
Close to half of businesses use at least one environmental management practice
In 2018, 41% of businesses used at least one environmental management practice. These practices are protocols that businesses adopt in order to reduce their environmental impact. Using an environmental management system was the most common practice (reported by 22% of businesses), followed by developing or following a pollution prevention plan (20%) and performing a greenhouse gas emissions inventory (13%).
Note to readers
This release presents data from the redesigned 2018 Environmental Protection Expenditures Survey. This annual survey is of around 6,000 establishments in selected primary industries and in the manufacturing sector. Measures of industrial spending on environmental protection include all spending made to protect the environment and not only that made in response to regulations.
Because of the survey redesign, comparison with estimates from previous cycles should be done with caution.
Environmental protection expenditures: All operating expenses and capital and repair expenditures whose primary purpose is the prevention, reduction or elimination of pollution and/or other forms of degradation of the environment, as well as measures taken to restore the environment from a degraded state. This includes expenditures that a business incurred for pollution prevention, abatement and control; solid waste management; wastewater management; protection and remediation of soil, groundwater and surface water; protection and restoration of biodiversity and habitat; environmental monitoring; environmental assessments and audits; relevant training and administrative costs; etc.
Capital expenditures: All relevant outlays for machinery and equipment and their installation that have been capitalized, as well as for the construction of non-residential facilities.
Operating expenses: All expenses related to environmental protection incurred for labour, materials and supplies, maintenance and repair, and purchased services.
Pollution abatement and control (end-of-pipe processes): Any method, technique or process designed to manage or treat pollution after it has been generated during the production process. Examples of these types of equipment or processes include scrubbers at the end of emission stacks, biological and chemical systems for treating water (such as a water treatment plant), filtration systems, cyclones, or other barrier systems.
Pollution prevention (integrated processes): Any method, technique or process that reduces or eliminates the amount of pollution generated during the production process, i.e., before pollution is created. Examples include implementing more efficient processes that consume less energy or inputs; restructuring or redesigning the production process to reduce pollution or emissions; or reusing, recirculating or recycling materials on site (does not include materials sent off-site for recycling).
Contact information
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