Ahead of the upcoming unveiling of Prime Minister Mark Carney’s plan to enhance Canada’s competitiveness in combating climate change, Energy Minister Tim Hodgson provided a glimpse into the key components that will be unveiled during the budget presentation on Tuesday. Hodgson shared insights during discussions with officials and G7 counterparts in the environmental and energy sectors on Wednesday.
Anticipation was high among stakeholders in the environmental and clean technology sectors for the release of the strategy before the commencement of the two-day G7 gathering, set to kick off in Toronto on Thursday. While not explicitly mentioning the climate strategy, Hodgson discussed three fundamental approaches guiding the government’s initiatives.
One key approach involves strategically utilizing public funding and tax incentives to mitigate risks and encourage investments in innovative projects. The aim, according to Hodgson, is to ensure the Canadian economy remains competitive, enabling Canadian products to thrive in a low-carbon global landscape. Hodgson highlighted the potential for government support to de-risk and expand Canada’s carbon capture, storage, and removal sector, pointing to the collaboration between Arca, a Canadian company, and Microsoft as an example.
Additionally, Hodgson emphasized the government’s commitment to establishing a framework of regulatory certainty, characterized by consistent policies, expedited processes, and reliable permitting. The government is already implementing measures to fast-track major resource projects.
Moreover, Hodgson underscored the significance of leveraging artificial intelligence (AI) to enhance energy systems, making them more efficient and resilient. He noted that AI is revolutionizing energy production, distribution, and consumption by enabling real-time demand prediction, accelerating materials research for improved batteries, and optimizing renewable energy sources like wind farms.
Regarding the proposal to cap industrial emissions, Hodgson did not provide clarity on its future during his remarks. Notably, the upcoming budget presentation coincides with the one-year anniversary of the federal government’s release of draft regulations aimed at imposing emission limits on the oil and gas sector, a significant contributor to Canada’s emissions.
Louise Comeau, a former federal government climate policy adviser, suggested that the government’s focus on carbon capture and storage indicates a preference over implementing an emissions cap. While carbon capture technology is still in its early stages, it is seen as a potential solution for industries like cement, steel, and oil and gas to maintain or increase production while reducing emissions.
Furthermore, Hodgson highlighted various initiatives championed by Ottawa for low-carbon energy production, such as nuclear plant extensions, small modular reactors, natural gas projects with carbon capture, and grid-scale battery storage integration. The Canadian Climate Institute’s recent analysis has raised concerns about Canada falling short of its 2030 emission reduction targets, emphasizing the need for accelerated actions to address climate change.
In light of the government’s efforts under Carney’s leadership, recent decisions to cancel the consumer carbon pricing mechanism and pause the electric vehicle mandate have raised questions about meeting emission reduction goals. The government’s January greenhouse gas projections indicate a shortfall in achieving the climate targets. Additional measures are required to counterbalance the impact of these policy changes and steer Canada towards a more sustainable and low-carbon future.