Canada wakened the day after President Donald Trump’s second inauguration in unfamiliar territory. Our closest neighbour and largest commerce associate for the previous century instantly determined that Canada was not, actually, a good friend—and that our commerce agreements had been not likely binding. Whether or not and which tariffs come or go is inconceivable to foretell at this level, however one factor has turn out to be clear: belief, that different essential T phrase, has been shattered irreparably.
Canada should now look past its borders, inside its borders, and inside itself. At the beginning, meaning 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 methods, 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 nations undertake these measures, demand for oil and gasoline will see a decline, whereas curiosity in clear vitality imports and low-carbon merchandise will enhance.
The worldwide marketplace for the top-six mass-manufactured clear vitality applied sciences (photo voltaic PV, wind generators, electrical vehicles, 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 as we speak by rising our clear economic system to help home demand whereas growing 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; help commerce diversification with non-US nations; and create and construct clear home provide chains, prioritizing industries that use Canadian sources 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 overseas traders look to find in jurisdictions with an electrical energy system that’s dependable, reasonably priced, and low-carbon. Not solely does Canada have the bottom electrical energy charges amongst G7 nations, however the nation’s renewables development 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 fresh capability both at the moment 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, virtually fully in renewables.
Canada is host to 31 totally different vital minerals, which aren’t solely vital to construct a path to internet zero however to assist help Canada’s vitality safety in an more and more electrified period. For example, Canada is likely one of the few Western nations which have an abundance of cobalt, graphite, lithium, and nickel—vital minerals which might be important to creating batteries and EVs. Canada can also be a serious producer of copper, which is utilized in energy transmission, constructing wiring, EVs, and different digital parts. Creating simply six of Canada’s vital minerals may contribute greater than $500 billion to the nation’s GDP over the lifetime of the mines. Lots of Canada’s world allies want to enhance 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 this planet by BloombergNEF, forward of China and 28 different nations. As Canada appears to diversify its exports, we have now a selected alternative to construct out the midstream of our battery provide chain (the place uncooked supplies are remodeled into battery parts) and export high-value, sustainable battery supplies to world markets.
Canada is well-positioned to provide world markets with low-carbon metal, aluminum, chemical substances, and fertilizers, which will likely be wanted within the coming many years. 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 nations 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 entails accelerating regulatory and allowing processes for clear development tasks, making it simpler for green-collar staff to maneuver between provinces, and higher aligning constructing, building, and transportation codes.
Connecting Canada means investing in and accelerating the build-out of vital commerce, vitality, and transportation infrastructure, like highway networks to distant mining websites and ports to rising markets. Now greater than ever, it’s time to improve connections between provincial electrical energy methods. Prioritizing grid interties in strategic areas will improve vitality safety, flexibility, and ratepayer affordability.
Purchase Canada has rapidly was a stylish phrase, however for policymakers, the definition ought to embrace rising the marketplace for Canadian merchandise, supporting Canadian possession, and serving to rising Canadian firms scale up. Governments can do that via shopper 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 might be proximate to manufacturing networks and considerable clear electrical energy are straightforward beacons for all method of companies. As is our clear electrical energy grid: we have now already seen firms select Canada partially for its low-cost, low-emissions energy. Certainly, Canada ought to be advertising a “Clear Canada” export model to each Canadians and the world.
Canada’s alternatives are plentiful, important, and possible. Seizing the clear financial alternative will not be about beginning over, however about leveraging pre-existing industries and benefits in a approach that units us up for a unique future—and a future we write for ourselves.
This publish first appeared on TheFutureEconomy.ca.
