Transforming Canada’s Economy to Embrace a Low-Carbon Future

October 22, 2021

On Oct. 21, The Canadian Institute for Climate Choices (CICC) released Sink or Swim: Transforming Canada’s Economy for a Global Low-Carbon Future. The report assesses Canada’s readiness for the coming “global green wave,” and indicates how we can prepare for the transition to a global green economy. 

Global markets are changing. Governments are implementing carbon-reduction policies that are putting pressure on industry, clean technologies are causing disruptions, and investors are responding to the shifting landscape.

Canada finds itself at a crossroads: either we transform our economy to adapt to new markets, or we stagnate and lose our competitive position globally. Canada is poised to be a global leader in cleantech adoption, but there are a few critical things the Canadian cleantech ecosystem needs in order to be transition-ready. Here are some key takeaways from Sink or Swim.

Increased investments

CICC’s report calls for increased investments to ensure that Canadian businesses are transition-ready. According to stress testing models used in their research, many Canadian exporters and multinationals are not ready for the coming green wave. 

Transition-vulnerable industries like high-carbon power, upstream and downstream oil and gas, airlines, chemicals, and automobile manufacturing could be facing significantly reduced profits as the world moves towards net-zero.

Large investments are not happening at the scale needed. Businesses are vulnerable to shifting global markets and investor sentiment. Climate policy decision making could lead to greater investment incentives into Canadian cleantech. Sink or Swim calls on the government to use policy in order to drive private companies to take action by providing greater certainty on carbon pricing and regulation.

Sector-specific strategies

Developing targeted plans to respond to specific drivers behind profit-loss will be key in ensuring the long-term success of Canada’s cleantech ecosystem.

Giving Canada’s innovators, industry, and investors a place to collaborate and create solutions to the coming economic shift will help to ensure a smooth transition.

Foresight’s NEXT initiatives aim to do exactly this. We provide innovators, industry, investors, government, and academia a platform to collaborate on sector-specific initiatives. 

Up-skilling programs for cleantech workers

Sink or Swim indicates that the most affected communities in the coming “green wave” will be those with high rates of employment in transition-vulnerable industries. Providing educational incentives and access to training will mitigate the effects of the low-carbon transition.

Collaboration between federal, provincial, territorial, municipal, and Indigenous governments will be necessary in developing transition strategies that support workers and communities. Supporting worker transition, skill development, educational outcomes, and transition-readiness should be central tenets in any transition plans.

Support for scale-up ventures

Canada has hundreds of companies poised to grow through the transition to a green economy. Attracting investment remains to be a significant barrier to companies in less established markets, like clean hydrogen, energy storage, and building technology.

Sink or Swim calls on the Canadian government to direct public investments and tax incentives towards industries with export and growth potential that typically face barriers to private investment.

As global markets shift, responding to the increased demand for clean energy and technologies will ensure that Canadian cleantech ventures will be able to seize market opportunities. 

An inclusive transition

To ensure that our economic goals align with our societal goals, any transition plans need to be inclusive.

Many First Nations across Canada have become dependent on transition-vulnerable industries for jobs and income. There are more than 200 medium- to large-scale operations that have Indigenous involvement through ownership, co-ownership, or impact-benefit agreements. 

Plans laid now must support our sustainable development goals with Indigenous economic empowerment as a means of reconciliation.

Join us at Foresight as we help to pave the road to Canada’s low-carbon future. To find out more, read the full report.