The transition to a global net-zero, low-carbon economy is underway and Canada must build the industries that will position the country for success. Otherwise, it risks being left behind by the strategic efforts of other countries, with considerable consequences for its future prosperity.
Canada’s Future in a Net-Zero World: Securing Canada’s Place in the Global Green Economy, explores how governments can take an industrial policy approach to ensure the country’s long-term competitiveness. The report was published by Smart Prosperity Institute, the Pacific Institute for Climate Solutions (PICS), and The Transition Accelerator.
According to the report, Canada’s existing clean competitiveness investments are spread too thin across different sectors, and often take the form of one-off grants to individual firms. Economic competitors like the European Union and Australia are currently a step ahead in using industrial strategy to position themselves in low-carbon sectors where Canada could lead. It is imperative that Canada take a more strategic approach to seize economic opportunities before global supply chains are fully formed.
“We’re in a race against other countries to position ourselves in quickly forming value chains in specific sectors where Canada can win economically,” said lead co-author Derek Eaton, Director of Public Policy Research and Outreach at Smart Prosperity Institute. “Only taking a strategic industrial policy approach will ensure we cement our place in the new world order.”
Governments can position Canada for economic success in the low-carbon economy by focusing efforts on top economic opportunities, such as manufacturing medium and heavy-duty zero-emission vehicles, producing low-carbon hydrogen and aluminum refining. As the report shows, to succeed, governments should create long-term strategies that integrate policy tools and support public-private partnerships to produce roadmaps to develop these key sectors.
“Above all, our report shows that Canada absolutely has what it takes to prosper in the green economy,” said lead co-author Bentley Allan, Resident Fellow at The Transition Accelerator and former Associate Director at PICS. “Now is the time for governments to work together with firms, investors and universities to develop roadmaps to focus existing funding streams and inspire new strategic investments in areas where Canada is well-positioned to succeed.”
In addition to calling for governments to focus their efforts on top priority areas for clean growth, the report also outlines Canadian strengths such as net-zero minerals, carbon accounting and our relatively clean electricity grid as enabling opportunities to position the country for success in the low-carbon economy. The report also lays out additional important opportunities where Canada can compete, such as net-zero mining, producing battery metals and more.
This research was supported by PICS and Ivey Foundation. The full length version of the report is available here.