The report, Environmental Protection Expenditures in the Business Sector 2004, shows Canadian companies spent $6.8 billion to protect the environment in 2004.  Overall, there was little change in total capital expenditures ($2.9 billion, -1.0% from 2002) and operating expenses ($3.8 billion, +0.1% over 2002).

The report shows that businesses spent more on pollution prevention and site reclamation and decommissioning projects but less on end-of-pipe pollution abatement and control projects.  The petroleum and coal industry and the mining industry were responsible for much of the increase in investments from 2002 to 2004.

Highlights of the 2004 Report are as follows:

• Pollution prevention accounted for 53% ($1.5-billion) of environmental capital expenditures in2004, up from 50% in 2002.
  
• Pollution abatement and control (end-of-pipe processes) accounted for25% ($0.71-billion) of capital expenditures on environmental protection, down from32% in2002. Operation expenses of pollution abatement were reported at $1.5 billion, a $197-million drop from 2002.
  
• Environmental protection spending showed great variability between industries, with some industries increasing expenditures by over 20% and other industries reducing spending by similar amounts.
  
• In order to accommodate new sulphur emission regulations, the petroleum and coal industries increased capital spending on environmental protection by 15% over 2002 ($811-million to $933-million).
  
• The Mining industry also reported increases in investments in pollution abatement and control equipment in2004compared with2002, up$49.6million to$85.9million, while pollution prevention investments reached$51.8million, an increase of$20.6million. Expenditures were made for projects such as site decommissioning and water treatment.
  
• The Electric Power Generation, Transmission and Distribution industry experienced a significant decline in environmental protection expenditures in2004compared to2002(from$837.7million to$507.8million). The largest decline occurred in capital investments, which shrunk from$511.9million in2002to$282.5million in2004(-44.8%). Much of the decline was due to smaller investments in end-of-pipe and pollution prevention capital projects.
  
• The Electric Power Generation, Transmission and Distribution industry also accounted for$21.2million in GHG emission reduction investments, down from$98.8million in2002.
  
• Businesses spent$955million in2004on technologies that reduced greenhouse gas emissions (GHG), down from$1.1billion in2002 and showed a35% decline in capital investments made to reduce greenhouse gas emissions from$583.3million in2002to$379.3million in2004.
  
• Oil and gas extraction companies invested$124.8million to reduce GHG emissions in2004. Although this was the largest amount spent compared to the15other industry groups surveyed, it also represented a decrease of46% compared to2002.
  
• The Wood Products industry was the second largest investor in reducing GHG emissions at$45.9million, up from$19.3million in2002.

This latest report is based on 2004 survey results and represents estimates of capital and operating expenditures made in 2004 by businesses in order to anticipate or to respond to environmental regulations, environmental conventions or voluntary agreements. Industry spending on environmental protection is affected by environmental conventions, voluntary agreements between governments and industry representatives and environmental regulations.

The report is based on data collected from the Survey of Environmental Protection Expenditures (SEPE), 2004.  In addition to covering business expenditures on environmental protection, SEPE, since 1997, has been broadened to cover the adoption of environmental management practices, pollution prevention practices and environmental technologies.

Over the next few months we will be reporting on some of the issues brought out by this report, such as the decline in GHG emission expenditures, the shift from pollution prevention to pollution abatement and why these trends are occurring.