OTTAWA — CHRIS SEVERSON-BAKER, executive director at the Pembina Institute, made the following statement in response to the Government of Canada’s Budget 2025 and Climate Competitiveness Strategy.
“Canada urgently needs to build a stronger, more dynamic economy – one that is resilient to the volatile geopolitical context we’re in. In this context, recalibrating our economy to align it with the sectors that are growing fastest makes sense. With investment in clean energy now consistently outnumbering fossil fuels at a rate of two-to-one, it’s clear the smart money is on low-carbon industries and technologies.
“Most promising today is the government’s commitment to strengthening industrial carbon pricing – systems which have the potential to efficiently drive millions in private capital toward low-carbon investments and significant emissions reductions from Canada’s heaviest-emitting sectors, including oil and gas. Industrial carbon pricing does this while adding essentially no cost to consumers – improving the climate competitiveness of industries, without impacting costs for Canadians. This, along with finalising long-anticipated oil and gas methane regulations, and continuing to work with the oil and gas industry on contracts for difference for technologies like carbon capture and storage, are all positive steps for reducing emissions from oil and gas production, and setting it up to compete in a world demanding provably low-carbon energy.
“Measures that continue to grow Canada’s supply of low-cost, clean electricity – including recommitting to the landmark Clean Electricity Regulations and the imminent finalization of clean electricity investment tax credits – will help cement Canada’s role as a clean energy superpower, attracting investment from industries hungry for abundant, low-cost electricity.
“On housing, including large building retrofits as a possible project of regional significance under the new Build Communities Strong Fund highlights the immense market opportunity of the retrofit sector. We hope to see increased collaborations between all levels of government to invest in retrofits that will increase climate resilience, lower energy demand, and grow community-level jobs and economic development.
“There remains uncertainty around electric vehicle policies. Canada has the tools to succeed as a global exporter of EVs and batteries: a skilled work force, clean and abundant electricity, and access to critical minerals. Critical minerals have been trumpeted by both federal and provincial governments as a new economic opportunity, but global demand for critical minerals ultimately follows demand for batteries. A smart industrial strategy would include stimulating domestic adoption of EVs, to support the development of a Canadian supply chain that can compete globally. We look forward to more announcements on this in the coming weeks.
“From South Australia to Pakistan, people aren’t installing rooftop solar panels at record rates because of climate targets – much like drivers in places as diverse as Quebec and Ethiopia didn’t double and triple their uptake of EVs in two years simply because they’re worried about tailpipe emissions. In both cases, it’s because clean energy options are more energy-secure, more cost-effective, and better overall. Examples from developed and emerging economies across the world show that, when given the chance and supported by forward-thinking governments, these industries skyrocket – and bring jobs, investment, and a better quality of life. Today’s Budget suggests this government understands smart climate policy is smart economic policy – it’s now down to all levels of government, and industries, to move us toward a prosperous climate competitive future.”
Key facts
- According to the International Energy Agency, in 2023, clean energy added around USD 320 billion to the world economy, or 10 per cent of global GDP growth. This is roughly equivalent to adding an economy the size of the Czech Republic to global output. The IEA defined clean energy as deployment of renewables and other emissions-free electricity, manufacturing of clean energy technologies such as solar, wind and batteries, as well as sales of low-carbon energy uses – such as electric vehicles and home heat pumps.
- According to Energy and Climate Intelligence Unit, globally clean energy jobs now outnumber those in oil, gas and coal and fossil-engine manufacturing (32.1 million). Renewables jobs almost doubled from 8.5 million in 2015 to 16.2 million in 2023.
- Oil industry majors (BP, Shell, Equinor) now expect global oil demand to peak in 2030, even under scenarios with a greater focus on energy security that leads to a slower transition away from fossil fuel use.
- Meanwhile global LNG supply is set to surge in the next few years, particularly from the US & Qatar. Sufficient demand to accommodate this supply largely hinges on prices being low enough for Asian demand to materialize, a key risk for Canada as a relatively high-cost producer.
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Contact
Alex Burton
Director, Communications, Industrial Decarbonization
825-994-2558
