Ahead of the upcoming presentation of Prime Minister Mark Carney’s climate competitiveness plan, insights were shared by the energy minister regarding the content expected to be unveiled during the budget announcement on Tuesday. Energy and Natural Resources Minister Tim Hodgson discussed key aspects prior to meetings with officials and fellow G7 environment and energy ministers. Stakeholders in the environmental and clean technology sectors had anticipated the release of the strategy before the start of the two-day G7 summit in Toronto.
Although not explicitly mentioning the climate strategy, Hodgson highlighted three main approaches guiding the government’s efforts. One involves strategically utilizing public funding and tax incentives to reduce risks and encourage investment in innovative projects. The objective, according to the minister, is to ensure the Canadian economy remains competitive and that Canadian products excel in a low-carbon global landscape.
Hodgson indicated that Canada’s growing carbon capture, storage, and removal sector could be supported and expanded through government funding. He referenced Arca, a Canadian company that recently announced a partnership with Microsoft to extract carbon dioxide from the atmosphere, with financial backing from NorthX Climate Tech, a Canadian organization backed by Natural Resources Canada.
The minister also emphasized the government’s focus on establishing a regulatory framework that offers predictability, streamlined policies, expedited processes, and dependable permitting. He highlighted ongoing efforts by the federal government to implement legislation aimed at expediting major resource projects.
Furthermore, Hodgson underscored the importance of leveraging artificial intelligence to enhance energy systems, making them more intelligent, efficient, and resilient. He noted that AI is already transforming energy production, distribution, and consumption, facilitating real-time grid demand prediction, accelerating battery technology advancements, and optimizing renewable energy sources like wind farms.
Regarding emissions regulations, a senior government source noted that the strategies of incentivizing clean tech investment and providing industry certainty are pertinent to the forthcoming climate competitiveness plan. Notably, there was no mention of the fate of the proposal to cap industrial emissions, which was introduced a year ago targeting emissions from the oil and gas sector, a significant contributor to Canada’s total emissions.
In the context of policy preferences, former federal government climate policy advisor Louise Comeau suggested that the government may prioritize carbon capture and storage over emission caps. Carbon capture technology, though not yet proven at scale, is being explored as a means for industries such as cement, steel, and oil and gas to maintain or increase production while reducing emissions.
Hodgson also highlighted various initiatives led by Ottawa in the realm of low-carbon energy generation, including nuclear plant extensions, small modular reactors, natural gas with carbon capture and storage, and large-scale battery storage integration.
Despite these efforts, recent analyses from the Canadian Climate Institute indicate that Canada is unlikely to achieve its 2030 climate targets of reducing emissions by at least 40% below 2005 levels. The government’s own greenhouse gas projections from January also suggest that Canada is set to fall short of its climate objectives.
Since assuming office, Prime Minister Mark Carney has made decisions such as scrapping the consumer carbon price and pausing the implementation of the electric vehicle availability standard, without proposing alternative measures to compensate for the reduction in emissions.
Overall, the government’s focus on fostering innovation, promoting regulatory certainty, and embracing technological advancements underscores its commitment to addressing climate challenges and enhancing Canada’s competitiveness in a decarbonized global economy.
