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Canada woke up the day after President Donald Trump\u2019s second inauguration in unfamiliar territory. Our closest neighbour and biggest trade partner for the past century suddenly decided that Canada was not, in fact, a friend\u2014and that our trade agreements were not really binding. Whether and which tariffs come or go is impossible to predict at this point, but one thing has become clear: trust, that other important T word, has been shattered irreparably.<\/p>\n\n\n\n
Canada must now look beyond its borders, within its borders, and within itself. First and foremost, that means aligning our economy with the wider, friendlier world.<\/p>\n\n\n\n
Canada has trade agreements with 60% of the global economy, making us well-positioned to lessen our reliance on US markets. This analysis comes from a new Clean Energy Canada\u00a0report<\/a>, which finds that, of our 10 largest non-US trade partners, all have net-zero commitments and carbon pricing systems, and roughly half apply carbon border adjustments on imports and have domestic EV requirements reshaping their car markets.<\/p>\n\n\n\n Taken together, these measures send a clear, unmistakable signal about where their economies are headed. Carbon border adjustments, for example, incentivize low-carbon products from importing nations like Canada, while a carbon price and requirements for more EVs mean the market is weaning itself off fossil fuels. As more countries adopt these measures, demand for oil and gas will see a decline, while interest in clean energy imports and low-carbon products will increase.<\/p>\n\n\n\n The global market for the top-six mass-manufactured clean energy technologies (solar PV, wind turbines, electric cars, batteries, electrolysers, and heat pumps) is set to rise from US$700 billion in 2023 to more than US$2 trillion by 2035\u2014close to the value of the world\u2019s crude oil market in recent years. Canada is uniquely positioned to address the economic challenges of today by growing our clean economy to support domestic demand while increasing low-carbon exports. To seize this advantage, federal and provincial governments should pursue an industrial policy approach, giving special attention to industries and companies that: are poised to play an expanding role in a net-zero world; support trade diversification with non-US nations; and create and build clean domestic supply chains, prioritizing industries that use Canadian resources and know-how.<\/p>\n\n\n\n Cheap, clean electricity has been the backbone of Canada\u2019s economy for decades and is a key competitive advantage as foreign investors look to locate in jurisdictions with an electricity system that is reliable, affordable, and low-carbon. Not only does Canada have the lowest electricity rates among G7 countries, but the country\u2019s renewables growth potential is among the world\u2019s best. Wind, solar, and storage capacity have grown 46% in five years, with another 15,000 megawatts of clean capacity either currently underway or planned across the country, representing more than $30 billion in investment. As of 2022, 20% of Canada\u2019s electricity-generating infrastructure included First Nations, M\u00e9tis, or Inuit partners, almost entirely in renewables.<\/p>\n\n\n\n Canada is host to 31 different critical minerals, which are not only necessary to build a path to net zero but to help support Canada\u2019s energy security in an increasingly electrified era. For instance, Canada is one of the few Western nations that have an abundance of cobalt, graphite, lithium, and nickel\u2014critical minerals that are essential to creating batteries and EVs. Canada is also a major producer of copper, which is used in power transmission, building wiring, EVs, and other electronic components. Developing just six of Canada\u2019s critical minerals could contribute more than $500 billion to the country\u2019s GDP over the life of the mines. Many of Canada\u2019s global allies are looking to increase and diversify their supply of responsibly produced critical minerals, and Canada has already signed numerous agreements with partners such as the EU, the UK, Japan, and South Korea to increase cooperation on and investment in Canada\u2019s critical mineral supply chain.<\/p>\n\n\n\n Canada\u2019s battery supply chain potential has been ranked first in the world by BloombergNEF, ahead of China and 28 other countries. As Canada looks to diversify its exports, we have a particular opportunity to build out the midstream of our battery supply chain (where raw materials are transformed into battery components) and export high-value, sustainable battery materials to global markets.<\/p>\n\n\n\n Canada is well-positioned to supply global markets with low-carbon steel, aluminum, chemicals, and fertilizers, which will be needed in the coming decades. For example, steel made in the US, EU, and China is between 16% and 200% more carbon-intensive than steel made in Canada, while aluminum from those countries is between 170% and 535% more carbon-intensive than Canadian products.<\/p>\n\n\n\n So, how does Canada map this vision onto reality? The simple answer is to streamline Canada, connect Canada, buy Canada, and promote Canada.<\/p>\n\n\n\n Streamlining Canada<\/strong>\u00a0involves accelerating regulatory and permitting processes for clean growth projects, making it easier for green-collar workers to move between provinces, and better aligning building, construction, and transportation codes.<\/p>\n\n\n\n Connecting Canada<\/strong>\u00a0means investing in and accelerating the build-out of critical trade, energy, and transportation infrastructure, like road networks to remote mining sites and ports to growing markets. Now more than ever, it is time to enhance connections between provincial electricity systems. Prioritizing grid interties in strategic regions will enhance energy security, flexibility, and ratepayer affordability.<\/p>\n\n\n\n Buy Canada<\/strong>\u00a0has quickly turned into a trendy phrase, but for policymakers, the definition should include growing the market for Canadian products, supporting Canadian ownership, and helping emerging Canadian companies scale up. Governments can do this through consumer incentives for locally-made clean technologies, government procurement that favours low-emission Canadian products, and interprovincial trade promotion.<\/p>\n\n\n\n Promoting Canada<\/strong>\u00a0boils down to expanding and diversifying export opportunities while also incentivizing global companies to build here. Business parks and shovel-ready industrial lands that are proximate to production networks and abundant clean electricity are easy beacons for all manner of businesses. As is our clean electricity grid: we have already seen companies choose Canada in part for its low-cost, low-emissions power. Indeed, Canada should be marketing a \u201cClean Canada\u201d export brand to both Canadians and the world.<\/p>\n\n\n\n Canada\u2019s opportunities are plentiful, significant, and feasible. Seizing the clean economic opportunity is not about starting over, but about leveraging pre-existing industries and advantages in a way that sets us up for a different future\u2014and a destiny we write for ourselves.<\/p>\n\n\n\n This post first appeared on TheFutureEconomy.ca<\/a><\/em>.<\/p>\n
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