Canada awoke the day after President Donald Trump’s second inauguration in unfamiliar territory. Our closest neighbour and largest commerce accomplice for the previous century immediately determined that Canada was not, the truth is, a buddy—and that our commerce agreements had been probably not binding. Whether or not and which tariffs come or go is unattainable to foretell at this level, however one factor has change into clear: belief, that different necessary T phrase, has been shattered irreparably.
Canada should now look past its borders, inside its borders, and inside itself. Firstly, which means aligning our economic system with the broader, friendlier world.
Canada has commerce agreements with 60% of the worldwide economic system, making us well-positioned to minimize our reliance on US markets. This evaluation comes from a brand new Clear Power Canada report, which finds that, of our 10 largest non-US commerce companions, all have net-zero commitments and carbon pricing programs, and roughly half apply carbon border changes on imports and have home EV necessities reshaping their automotive markets.
Taken collectively, these measures ship a transparent, unmistakable sign about the place their economies are headed. Carbon border changes, for instance, incentivize low-carbon merchandise from importing nations like Canada, whereas a carbon worth and necessities for extra EVs imply the market is weaning itself off fossil fuels. As extra international locations undertake these measures, demand for oil and fuel will see a decline, whereas curiosity in clear vitality imports and low-carbon merchandise will improve.
The worldwide marketplace for the top-six mass-manufactured clear vitality applied sciences (photo voltaic PV, wind generators, electrical automobiles, batteries, electrolysers, and warmth pumps) is about to rise from US$700 billion in 2023 to greater than US$2 trillion by 2035—near the worth of the world’s crude oil market lately.
Canada is uniquely positioned to deal with the financial challenges of immediately by rising our clear economic system to assist home demand whereas rising low-carbon exports. To grab this benefit, federal and provincial governments ought to pursue an industrial coverage strategy, giving particular consideration to industries and corporations that: are poised to play an increasing position in a net-zero world; assist commerce diversification with non-US nations; and create and construct clear home provide chains, prioritizing industries that use Canadian assets and know-how.
Low-cost, clear electrical energy has been the spine of Canada’s economic system for many years and is a key aggressive benefit as international traders look to find in jurisdictions with an electrical energy system that’s dependable, inexpensive, and low-carbon. Not solely does Canada have the bottom electrical energy charges amongst G7 international locations, however the nation’s renewables progress potential is among the many world’s greatest. Wind, photo voltaic, and storage capability have grown 46% in 5 years, with one other 15,000 megawatts of unpolluted capability both presently underway or deliberate throughout the nation, representing greater than $30 billion in funding. As of 2022, 20% of Canada’s electricity-generating infrastructure included First Nations, Métis, or Inuit companions, nearly solely in renewables.
Canada is host to 31 totally different vital minerals, which aren’t solely essential to construct a path to internet zero however to assist assist Canada’s vitality safety in an more and more electrified period. As an illustration, Canada is without doubt one of the few Western nations which have an abundance of cobalt, graphite, lithium, and nickel—vital minerals which are important to creating batteries and EVs. Canada can be a significant producer of copper, which is utilized in energy transmission, constructing wiring, EVs, and different digital elements. Creating simply six of Canada’s vital minerals might contribute greater than $500 billion to the nation’s GDP over the lifetime of the mines. Lots of Canada’s world allies wish to improve and diversify their provide of responsibly produced vital minerals, and Canada has already signed quite a few agreements with companions such because the EU, the UK, Japan, and South Korea to extend cooperation on and funding in Canada’s vital mineral provide chain.
Canada’s battery provide chain potential has been ranked first on the planet by BloombergNEF, forward of China and 28 different international locations. As Canada seems to be to diversify its exports, we have now a specific alternative to construct out the midstream of our battery provide chain (the place uncooked supplies are reworked into battery elements) and export high-value, sustainable battery supplies to world markets.
Canada is well-positioned to produce world markets with low-carbon metal, aluminum, chemical compounds, and fertilizers, which shall be wanted within the coming a long time. For instance, metal made within the US, EU, and China is between 16% and 200% extra carbon-intensive than metal made in Canada, whereas aluminum from these international locations is between 170% and 535% extra carbon-intensive than Canadian merchandise.
So, how does Canada map this imaginative and prescient onto actuality? The easy reply is to streamline Canada, join Canada, purchase Canada, and promote Canada.
Streamlining Canada includes accelerating regulatory and allowing processes for clear progress initiatives, making it simpler for green-collar employees to maneuver between provinces, and higher aligning constructing, development, and transportation codes.
Connecting Canada means investing in and accelerating the build-out of vital commerce, vitality, and transportation infrastructure, like street networks to distant mining websites and ports to rising markets. Now greater than ever, it’s time to improve connections between provincial electrical energy programs. Prioritizing grid interties in strategic areas will improve vitality safety, flexibility, and ratepayer affordability.
Purchase Canada has shortly was a classy phrase, however for policymakers, the definition ought to embody rising the marketplace for Canadian merchandise, supporting Canadian possession, and serving to rising Canadian firms scale up. Governments can do that by client incentives for locally-made clear applied sciences, authorities procurement that favours low-emission Canadian merchandise, and interprovincial commerce promotion.
Selling Canada boils right down to increasing and diversifying export alternatives whereas additionally incentivizing world firms to construct right here. Enterprise parks and shovel-ready industrial lands which are proximate to manufacturing networks and plentiful clear electrical energy are simple beacons for all method of companies. As is our clear electrical energy grid: we have now already seen firms select Canada partly for its low-cost, low-emissions energy. Certainly, Canada ought to be advertising and marketing a “Clear Canada” export model to each Canadians and the world.
Canada’s alternatives are plentiful, vital, and possible. Seizing the clear financial alternative shouldn’t be about beginning over, however about leveraging pre-existing industries and benefits in a manner that units us up for a distinct future—and a future we write for ourselves.
This put up first appeared on TheFutureEconomy.ca.
