Toby Heaps: Some people think the Inflation Reduction Act was a spectacular success. There are other views as well. What’s your take? Did the policy work?

Jigar Shah: I’m sure everybody is right. I think that we all have to be honest about the fact that the United States had chosen to allow its manufacturing sector to dwindle in a very big and material way, right from 30% of gross domestic product down to about 10% of GDP. I don’t think that what we were doing under the Inflation Reduction Act was going to be solely responsible for changing that trajectory.

I have a lot of friends who are doing very large, audacious things in the cleantech space, and every single one of them, without exception, when they hit a certain milestone, decided to build their manufacturing facility or their first-of-a-kind plant in Asia. A few of them decided to go to Europe or to India or to South America. In general, not a single one of them thought Tennessee or Georgia or Texas was the right place to scale up their plant.

That all changed over the last four years. We got every one of them to consider the United States, and I’d say close to 70% of them ended up choosing the United States after evaluating all of the situations. So from that perspective, we have made a material difference.

TH: That’s encouraging. In Canada, the current government led by Prime Minister Mark Carney has introduced a pack of investment incentives that, through the capital expensing of 100% and tax rebates, amount to about 50 cents on the dollar. So if you invest in most clean-economy investments, you’ll get back half that money in the same year. Do you think that is going to be enough for Canada to become a magnet?

JS: I would suggest that this is not really about numbers. I think that ultimately this is about the animal spirits of the cleantech sector. So the question is, are CEOs looking to Canada to build a facility? And I think right now, the answer is no.

And I don’t think Canada’s ever reached out to them and asked them to come to Canada. And the thing that bothers me the most – not just about Canada, but the U.K. or EU, Australia – is that they believe that the policies themselves are enough to attract companies. And I’m like, no, you need to make some phone calls. You need to reach out proactively to the top 400 companies and say, “Have you looked at Canada? Can I keep you on the phone for 45 minutes and explain it to you? Can I introduce you to a front-door person that will guide you through the entire Canadian process and introduce you to all of the three-letter acronyms and help you find the right programs?”

I’m focused on people who have raised at least $200 million of corporate capital. We’re not talking about the long tail of companies that have raised a seed round. We’re talking about people who’ve been able to get all their milestones reached, and now they’re at a very clear inflection point where they need public policy to be able to get to the next level.

TH: A lot of coverage in Corporate Knights magazine has focused on how the private sector and private capital can turbocharge this energy revolution. Do you think it’s capitalist Kool-Aid, this idea that the private sector is going to make up the bulk of the capital that gets deployed? Or do we really need the public sector to pony up, like they are now for the military spending?

JS: It’s an ongoing argument. I don’t know that I am smart enough to know what the conclusion is, but if you look at the solar, battery storage, critical minerals, EV sector in China, I would say that at least 70% of all the capital that China has put into that sector has been completely and utterly wasted right now. You may say, well, look at what they got for it: they have all this commanding market share and all this other stuff, right? But they haven’t ever raised their prices to the point where the profits of the winners are paying off the losses of the losers. China has no home runs. The question is, do you want to copy that exactly in the United States or Canada? My sense is no. So what do you want to do that’s different?

What we did in the United States was we said we’re going to be private-sector-led, government-enabled. We said the private sector has to vote with the $200 million worth of cash that they’ve given these companies, and then we’re going to match them with public-sector dollars that they need to get to the next stage, to really be able to get their costs down. And that worked really well. I would say the losses out of the U.S. system from the Inflation Reduction Act have been remarkably low. Let’s say we awarded 100 projects. Maybe 40 of them have failed, but of those 40, we’ve released almost no money because they had to meet certain milestones to get the money.

TH: You’re someone who doesn’t just focus on what’s already here but imagines what could be possible. Let’s say we’re sitting in our rocking chairs in 2050. What’s the prize? What could things look like?

JS: Well, I think we already see it. The beauty of our space is that every single thing worth talking about takes 50 years. We started seeing cellphones in the 1970s, but the technology didn’t really become powerful until the iPhone came out in 2007. Solar panels are the same.

When you look at where we are today, we’re in a place where there was disruption in Pakistan, in Nepal, in Ethiopia, and instead of choosing to move to diesel fuel, the entire country chose to move to solar and battery storage. So now, 20% of the entire grid in Pakistan has been transformed in three years into solar power.

You see the same potential in Canada or in the United States. Balcony solar means that you buy the solar panel from Home Depot, you unbox it, and you just stick it on your balcony, and then you plug it into the outside wall socket. And it’s super cost-effective, even in places that don’t get as much sun.

Now the question becomes what else is going to be cool? It is very obvious that everyone is moving to electric vehicles. Whether it’s 10% a year, or 25% or 50% a year, they’re all moving to electric vehicles. If you have 40 gigawatts of batteries, which is what we have already in the United States, and then you end up with 400 gigawatts of batteries [with the addition of EVs], which we will have here in the next few years – that backs up the entire U.S. grid during the spring and the fall. What do you need to unlock that? Vehicle-to-grid technologies. Why do people want to install those technologies? Because 15% of U.S. households already have backup gas or diesel generators, so they’ve already voted with their pocketbooks to pay for that.

Now if you have a car, and that car is a 125-kilowatt-hour battery, you can back up your whole house with that car. And once it’s backed up that way, well, now the utility can send it a signal saying, “We’re going to pay you 30 cents a kilowatt-hour, because otherwise we’ll have rolling blackouts because the natural gas plant that we were counting on failed, and so we’d like to pay you to basically save the grid.”

We’re in this situation where that technology works today, and when we’re in our rocking chairs in 2050, everyone will have them. They will be ubiquitous. And our children will say, “Well, duh, like, obviously.”

TH: When I talk to older utility guys, they kind of roll their eyes at the vehicle-to-grid idea and say, “Okay, well, tell me where that’s actually happening.”

JS: It’s happening at complete scale in the United Kingdom. It’s at a point where Octopus Energy is giving people free power on a regular basis to charge their electric vehicles. Because there’s a lot of excess wind and solar during certain times of the day. Remember, 90% of everything we need to do with the grid with electric vehicles can be done with managed charging, what they call V1G. Then there’s another 8% of what can be done with vehicle-to-home, where you never export back into the grid, you just take the home off-grid. So we could get 98% of the value without updating any of our standards that are in place now.

The 2026 Global 100 list puts speed in the spotlight

TH: Do you think geopolitically, has China sort of got themselves in a dominant spot that’s going to be pretty significant for this next century?

JS: China has clearly overplayed their hand. I think they don’t know it yet, but they have. Xi Jinping has been in power too long. And now he’s pissed off everybody. He’s pissed off India, Turkey, Malaysia, Vietnam – anyone who manufactures stuff, he’s pissed off all of them. So now the question becomes how long can they continue to lose money?

Remember, we have many more iterations of technology that you and I know about. Like, solar panels are not done, right? We got perovskites and other things that are coming in. Electric vehicles are not done. We have technologies in the queue that’ll double the energy density of lithium-ion batteries. We have no reason to share any of that technology with China now.

So when we decide not to share that technology with them and instead share it with India or Mexico or other places, we’ll see where it goes. Yes, it’s going to take us a solid 10-year effort to actually diversify the supply chain, which is exactly how long it took after the Arab oil embargo for us to diversify the supply chains for oil. We know how to do it. It’s a playbook. We’re executing on it now, and I think in 10 years’ time, we’re going to be quite a bit more diverse.

Toby Heaps is co-founder and publisher of Corporate Knights.

The post How to scale up the green economy appeared first on Corporate Knights.

Degrowthers want an economy that benefits many more than the few and where lifestyles are less dependent on earning capacity. They want an economy where bellies feel full of cheap, local food, where bodies feel stronger from universal healthcare, and where the world feels easier to navigate because common infrastructure like public transit is more abundant and accessible. It’s a world with fewer stresses.

Omer Tayyab, an ecological economist at the Autonomous University of Barcelona’s Institute of Environmental Science and Technology, describes it as a shift to “public luxury and private sufficiency.” 

Degrowth offers a solution to not just a major economic problem, but a social one. For Matt Orsagh, of the Arketa Institute for Post-Growth Finance, the community focus is the selling point, as well as “less time working, more time for care, more time for your family.” 

An influential degrowth movement could help stitch back together some of society’s frayed social threads, those we read about in surveys where respondents admit to identifying less with their communities than in decades past. Any fix to the climate and economic crises we’re navigating will require people to see beyond their individual needs. This is part of what makes degrowth unique: it offers a pathway to not only mitigate climate change, but to help save the community-driven part of our nature that makes us human.

What might we give up to achieve this lofty vision? For starters, industries with disproportionately high resource use might feel worth sacrificing, depending on your lifestyle. For instance, 92 million tons of fast fashion enter landfills annually, to say nothing of the electricity and oil used to produce synthetic textiles. Or how about the private jet industry? It caters to a small swath of the global population, yet in 2023 it caused about 4% of all civil aviation emissions. The cruise ship industry is another natural target, along with other sectors associated with decadence and excess, which benefit or enrich a small portion of the population. 

Degrowth is also a call to scale back the sustained, upward economic growth our culture expects, from individual corporations up through entire economies. In a podcast interview, Jason Hickel, author of Less Is More: How Degrowth Will Save the World, put it this way: we tend to see efficiencies as opportunities to expand production, rather than to right-size our economy.

The shift that degrowthers propose is the antithesis of the self-focused consumer culture and workaholic grind in which most of us are steeped – and that we may not be able to physically sustain.

There are also natural limits that perpetual growth necessarily confronts. Marie-Josée Privyk, a consultant who advises companies on their ESG disclosures, uses the example of setting up new renewable-power generation. “There aren’t enough resources to generate the infrastructure required to displace all the fossil energy we are consuming,” she says. The pivot to electric cars offers an example. Yes, they produce dramatically lower emissions than their gas-powered counterparts. But according to the MIT Climate Portal, mining lithium (a non-renewable resource) for electric car batteries can unleash up to 16 tons of carbon dioxide emissions. A degrowth approach might seek to reduce the number of cars on the road and invest in mass transit. 

Instead of trying to innovate our way out of crisis, a less technical approach might be necessary: a sharp cultural shift away from the consumption that propels our economic lives onward and upward and our collective mood downward.

For most of human history, we didn’t pursue growth in the way we do today. Wealth was a measure of success, but GDP became a global economic tool only 80 years ago. The more the economy grows, the greater the number of jobs and wealth. This creates resources that broadly improve the lives of citizens.

How the abundance agenda could unshackle the green economy

Along the way, the GDP yardstick has morphed into a different beast. “Now it’s tied up in our culture. It’s tied up in our politics, it’s tied up in our business, it’s tied up in our [retirement savings plans],” Orsagh says.

Degrowth, meanwhile, has a shorter history, taking its modern roots from the “décroissance” movement of early-2000s France. The idea took hold so strongly that former French president Nicolas Sarkozy enlisted Nobel-Prize-winning economists to head a commission that explored possible alternatives to GDP as a progress indicator. Degrowthers have many to choose from, ranging from health metrics like life expectancy or alternative indicators like the Sustainable Development Index or the World Happiness Report.

While in recent years the European Parliament, the European Union’s legislative body, has hosted two degrowth conferences, the movement has less clout in North America. That’s partly because, in Tayyab’s view, institutions like labour unions, environmentalist organizations and socialist parties are stronger in Europe, making their voices more powerful on the subject, and, in turn, making degrowth more viable. One of the leading voices in degrowth, Japanese philosopher Kohei Saito, says EU countries make more space in their economies for noncommercial activities, which is, he told Foreign Policy, “already half-degrowth.”

“[Degrowth] is well established in Europe and finds resonance with similar ideas from the Global South like Buen Vivir (Latin America), Swara (India) and Ubuntu (Africa),” Tayyab says.

Since governments operate at scale and can leverage state institutions to achieve degrowth targets, Tayyab says this power is necessary for degrowth: “The problem is that our governments during the neoliberal era have become followers of markets rather than shaping them for the people they putatively serve.”

Creative defiance

The business world would also have to start reshaping itself for a degrowth economy, and the jury is out on how this will take shape. Some firms may keep similar models – like public health or transit agencies – while others may have to explore new business lines or corporate structures as they negotiate the balance between their own scale and profit, and the health of people and planet.

Another obstacle might be the “D-word” itself, with its negative prefix and all the attached gloomy presumptions, like the fears of austerity or Luddism that boosters say are extreme reactions. Degrowth is less a regression than a reallocation of economic energies, they argue. “There’s still going to be things that grow, but let’s not grow the things that are destroying us or life-support systems,” says Christopher F. Jones, a historian of environment, economics and energy at Arizona State University.

But degrowthers exist on a wide spectrum, and they advocate for a lot of different things. Politicians and business owners may, because of competing interests, draw their limits to keep political donors happy or preserve profits, but everyday boosters frame degrowth in their own image too.

Some supporters apply degrowth ideals with relative conservatism. The economy they want to live in might end up more like a steady-state economy, which values improvement over expansion and focuses on optimizing resources. Others take a more radical approach, pontificating on burning the capitalist system down and starting over in a socialist (if not communist) utopia. This reset strategy must be dismissed as it offers no real plan for incremental improvements. Lives improve only if and when utopia is found. Environmental crises and lifestyle challenges would compound in the meantime.

For a movement selling itself to a skeptical public, having wildly different visions of degrowth exist in the same conversation is a marketing nightmare. Conversations about degrowth sometimes conflate it with “doughnut economics,” a regenerative economic model designed to account for environmental limits. Shaped like the pastry, the doughnut model has an inner ring of basic human needs but with the ecological ceiling as the outer ring, finding a balance in the space between for the well-being of people and planet. Degrowth boosters also increasingly use “postgrowth” and “degrowth” interchangeably, despite them previously being treated as more distinct concepts.

Orsagh, who writes a newsletter on degrowth but whose institute has “postgrowth” in the title, sees the former as a tool to get to the latter. “Degrowth isn’t a replacement for capitalism,” he says. “It’s what the path is to whatever comes next.”

North America represents a final frontier of sorts for degrowth. “In Canada, there doesn’t yet exist a strong enough political force that can articulate these demands,” Tayyab says.

Even so, in some niche areas, degrowth policies are taking hold in Canada and abroad – mostly related to reducing the time spent at work.

The right to disconnect, a policy that allows employees to ignore work-related emails and calls outside of their contracted hours, is one example of the trend. In Canada, it is already law in Ontario for firms with 25 or more employees. The federal government may soon enforce such a law for regulated industries, such as banking. At least a dozen nations have versions of similar regulations on the books.

Four-day workweeks and universal basic income, two other policies in this vein, are also increasingly becoming part of economic conversations, shifting away from traditional ideas of growth, productivity and work–life balance. Multiple countries, Canada included, explored basic income supports through a suite of emergency benefits during the COVID-19 pandemic. They were successful in untangling the ability to live with dignity from labour value and lifting people from poverty. In Canada, the percentage of Canadians living in poverty dropped from 10.3% in 2019 to 6.4% in 2020. One analysis found the assistance sufficient to move a single person out of poverty even in pricey Toronto. Such pandemic relief also led to record low poverty in the United States in 2023. Both countries lost this momentum after the policies lapsed, with rates creeping up.

Jones, who recently authored The Invention of Infinite Growth, thinks promoting the idea of a well-being economy, instead of hammering against GDP, can help degrowth make inroads. “Not every culture has to define well-being the same way, but everyone could agree we want to pursue it,” he says.

It’s an idealistic future to hope for, but that isn’t a criticism. Degrowth may be at odds with today’s economy, but it’s not necessarily at odds with a world we’d enjoy living in or one where we make faster progress toward tackling the climate crisis. It may seem disconnected from reality, but that’s a failure of imagination, and imagination is precisely what we need to move forward – to look at what we have at our disposal and get creative, rather than push it any further beyond its limits.

Rob Csernyik is a freelance journalist specializing in business and investigative reporting, as well as long-form features.

The post Why the degrowth movement thinks it can do abundance better appeared first on Corporate Knights.

If you haven’t heard about abundance yet, you probably will. The concept is having a moment and shaping policy discussions in North America and around the world. Titles like Klein and Thompson’s, Yoni Appelbaum’s Stuck and Marc Dunkelman’s Why Nothing Works all make versions of the same case. 

Abundance is starting to step off the bookstore shelf, igniting policy discussion forums at think tanks and universities. In September, more than 120 U.S. local politicians formed Abundance Elected to mould future local political leaders in the concept’s image.

Listen to any podcasts discussing abundance (themselves abundant) and critical realities are often glossed over. Innovations rarely take hold overnight, and some big swings will spectacularly fail. Abundance is often inscrutably clouded in start-up speak and the dynamic postures and sky’s-the-limit potential of aspiring Elon Musks pitching to venture capitalists. Financial speculators can take a punt on whatever risky start-up they want; it’s their dime. But for reimagining society, politicians and business leaders need to focus on concrete issues, not vibes. It is necessary to sell the sizzle and the lab-grown steak.

Abundance proponents suggest that a sizable amount of the scarcity we live with is born of assessments, bureaucratic processes and regulations. For example, the International Energy Agency estimates that around 1,650 gigawatts of clean energy capacity in advanced development stages is waiting to be connected to the grid. By reducing barriers, we can spur innovation, fight climate change, grow the economy and live our best lives. 

Though abundance is a more-is-more policy, the growth it inspires is not indiscriminate. “They want growth in very specific areas: growth in climate technology, growth in scientific discovery, growth in housing stock that allows people to live in cities,” says Christopher F. Jones, a historian of environment, economics and energy at Arizona State University. Though Jones disagrees with some of the key arguments the book makes, he says this focus makes abundance “different and more subtle” than simply chasing gross domestic product.

While talking heads sell abundance as new, in some respects it’s not radically different from the economic system we already have. Abundance is pro-business, friendly to entrepreneurs and new entrants, and it doesn’t sideline traditional metrics like GDP growth and job creation. It is a maximalist creed that caters to desires people have for the latest tech and enjoying lives of leisure, if we can step out of our own way.

In their telling, scientists, clean energy companies and real estate developers are sitting idle like cars at a red light, waiting for it to turn green so they can solve problems like illness, climate change and scarce housing. One example is the COVID-19 vaccine. Creating a working vaccine in short order required the U.S. government to launch Operation Warp Speed (OWS), reducing red tape for drug approval, investing in research, and collaborating with corporate America to get jabs in arms. Klein and Thompson point to the speed and effectiveness of OWS as an example of what abundance-style thinking leads to.

The crises spread plainly before us – climate and housing especially – add urgency to this narrative. “We either build faster or accept catastrophe,” they write. 

Fewer restrictions, more big swings

In Canada, we build slow. In a recent podcast appearance, Prime Minister Mark Carney advocated changing the federal government’s approach to green-lighting and regulation, shifting “from why to how” when it comes to major projects. For example, it’s not unheard of for projects facing federal environmental assessments such as interprovincial transmission lines, hydropower or railways to expect the process to take years. And a review from Blakes law firm says the climate of environmental regulations in Canada is growing stricter, rather than more relaxed. Meanwhile, Europe is dramatically simplifying its climate reporting standards for companies to boost competitiveness.

According to the abundance crowd, the reflex to keep tightening environmental rules has become an anachronism. As the toll of our activities on the planet shocked the public in the 1960s and 1970s and led them to demand change from those in power, the price for building green became building slowly. It served us then, but boosters of abundance suggest these regulations now prevent us from building and innovating enough, and the costs and time delays have become if not discouraging, prohibitive. With fewer restrictions and more big swings, the growth we realize, in theory, could go on forever.

Yet keeping lifestyles robust and expanding the economy – even with pure and green aims – is at odds with the more penitent, scaled-back approach that critics say the climate and ecological crises demand.

Consider the expected growth of AI use, powered by electricity-intensive data centres. The World Economic Forum estimates that globally such centres will use more power than Japan by 2030. An abundance argument doesn’t demand a societal pivot away from AI tech, or disincentivize the industry – it switches it to green energy, so we can have our cake and eat it too. At least to a certain point.

“When confronting the reality of infinite growth and resource consumption on a finite planet, they resort to hand-waving it away via techno-optimism: the belief that new technologies will overcome resource constraints,” says Matt Orsagh, co-founder of the Arketa Institute for Post-Growth Finance.

If abundance’s central problem is society not flexing its innovation muscles enough, there’s another critical dilemma alongside it. Have we pushed the limits of our ecosystem too far with pollutants and resource extraction, and if not, how much further can we morally and physically go?

Who benefits?

Abundance harkens to David Potter’s mid-20th-century “people of plenty” concept, which suggested that Americans defined themselves by the economic abundance that shaped their lives and coloured national character after the Second World War. It ushered in a new prosperity for many, in those less regulated days, even if key ingredients in examples of the time included exploitative practices (like extensive rail lines built using poorly paid immigrant labour) today’s society wouldn’t accept.

Abundance proponents suggest we can all benefit under a wide economic umbrella. But Jones says that Klein and Thompson focus too much on urban audiences in Abundance and that policies that concentrate too keenly on cities might leave behind low- and middle-income rural residents. Omer Tayyab, an ecological economist at the University of Barcelona’s Institute of Environmental Science and Technology, notes that the United States is already a wealthy country per capita yet chooses not to distribute the wealth. “Having a more deregulated system, even if it were to produce more, wouldn’t necessarily mean that the most vulnerable are uplifted,” he says.

Then there is the trust question. In an abundance society, political leaders will decide where to focus deregulation and growth opportunities. Business people will choose how to innovate in ways that make society more plentiful, which may not always bless their bottom lines. Yet we’re in an era unconducive to trusting these groups to reform in the best interests of the hoi polloi. Earlier this year, Angus Reid polled liberal and conservative Canadians to see what groups they trusted. Both overwhelmingly have a “great deal or fair amount of trust” in scientists. Political leaders, big businesses and large tech companies scored low.

Rebuilding public trust will be critical to chasing an abundance agenda in the United States. Recent polling suggests Democrats respond more favourably to populist rather than abundance-coded messages.

Mark Carney: Abundance bro?

Abundance policy offerings are scarce in Canada. Provincial governments in Alberta and Ontario have successfully won mandates with promises to trim red tape, but fixes have mostly been small, mundane bureaucratic processes rather than at-scale fixes to unlock abundance. Tariff threats, lagging productivity and failure to commercialize innovation make abundance a timely concern.

Canada’s 2025 election polls showed that Canadians were worried about the country’s relationship with the United States, housing affordability and cost of living. Abundance policies align with these concerns, but the connection has to be explicitly drawn by lawmakers. 

As a centrist liberal politician, Mark Carney aligns ideologically with the dominant view of abundance circulating in society. But suggestions from columnists and other wonks that he is an abundance politician conflates abundance with willingness to build. Case in point: Build Canada Homes. The new federal entity has a goal of increasing home construction in Canada, and Liberals have promoted it using abundance language. Carney recently announced initial funding of $13 billion and the construction of 4,000 new homes on six sites across the country.

But abundance is meant to unleash tools we have at the ready. The goals of Build Canada Homes, though promoted in abundance-speak, are heavily predicated on advanced prefab technology that isn’t at scale yet, plus Canada lacks the construction workforce to build this influx of homes.

Mike Moffatt, an economist with the Missing Middle Initiative, points to the Federal Housing Accelerator fund as another example of abundance-flavoured policymaking to address the housing crisis. The $4.4-billion purse is directed at helping municipalities increase housing stock faster, tying approval to outcomes like increasing density and growing supply faster than historical averages. What separates it from status quo thinking is not only the big vision, but a program designed to outpace current expectations for housing growth and the willingness to change regulatory habits to make it happen.

It’s too early to tell if the abundance movement will take itself, as one advocacy group puts it, “from op-eds to outcomes.” But interesting times call for solutions that meet the moment. Our culture of regulation has led to a point where many feel society is stagnant and regulations are preventing us from thriving. Abundance represents a clear break from this history. If making inroads on housing, climate change and more bountiful lives is really only a matter of turning red lights to green, perhaps it’s time to finally start making the switch.

Rob Csernyik is a freelance journalist specializing in business and investigative reporting, as well as long-form features.

The post How the abundance agenda could unshackle the green economy appeared first on Corporate Knights.

There are different paths to achieving a net-zero economy, but getting there affordably won’t be possible with an “all of the above” approach. To keep the costs of the transition as low as possible, we need to be strategic. Setting aside false and inefficient solutions, here’s a snapshot of how our cleaner, greener future will look:

Electrified transport

EV prices reach parity and become less costly than gasoline vehicles in the 2030s, while the average range of a full battery exceeds 550 kilometres. Drivers reap a giant clean-energy dividend on fuel, saving billions on energy costs compared to the fossil fuel era.

Vehicle-to-grid technology

The batteries in tens of millions of interconnected EVs provide additional energy storage to ensure a reliable grid. By 2050, vehicle-to-grid (V2G) technology saves hundreds of billions in grid investments and puts money in vehicle owners’ pockets.

Utility-scale battery storage 

Quicker to build than gas plants, large battery farms are critical to the transition to a renewable-based electricity supply. Over the longer term, they are supplemented by V2G storage (see below), shaving billions off utility costs and consumer bills.

Green buildings

Existing buildings are retrofit with heat pumps, and new buildings are efficient, electric, EV-ready and climate resilient. Home energy bills go down and are more resilient to inflation.  

Long-distance transmission 

Sharing is caring – and also energy efficient. Rather than segregated electricity systems, jurisdictions have access to electricity-generating capacity in wider regions. Prairie sunshine powers the dinner-hour peak along the Atlantic, and winds in the East supply morning electricity in the West.

Heat pumps 

Three to five times more efficient than gas boilers, heat pumps drastically reduce the energy consumption of buildings and protect households from big spikes in fossil fuel prices. They replace many air conditioners, too, for even more savings. 

This article was published in the Knight Bites section of the summer 2025 issue of Corporate Knights magazine. Order your copy here.

The post Meet the low-cost, low-emission economy of the future appeared first on Corporate Knights.

As the United States reverses course on climate-change-related energy policies, Canada has a unique opportunity to take the lead on the transition to cleaner energy in North America. But realizing that potential will require much faster action to implement the clean-economy tax credits that were introduced by the previous Liberal government.

The post Can Canada be a clean energy superpower? Not without tax credits. appeared first on Corporate Knights.

American conservationist David Brower ironically observed that “we are at war with nature, and we are winning.” The floods in Pakistan are one front in our clash with the planetary boundaries that define the rules for everything we do, but the war with nature will come to your doorstep soon.

Of course, there is no possibility of winning such a war, and UN Secretary General António Guterres has declared that “making peace with nature is the defining task of the 21st century and must be the top priority for everyone, everywhere.”

We know how to make that peace. The outlook would be bleaker if we did not know what needs to be done, or if what we needed to do was not also the path to renewed prosperity and economic justice.

The Corporate Knights Climate and Economic Renewal Plan describes a pathway to peace based on energy efficiency, electrification and expanding the supply of carbon-free energy. Some of its key components include:

• Retrofit, modernize and electrify most of the existing nine million residential and commercial buildings across Canada, with a priority on affordability for everyone.

• Rapidly expand the supply of renewable electricity and storage and increase inter-provincial grid connections.

• Increase electric vehicle market shares to 100% of light vehicles and 75% of trucks, with 10 million EVs on the road by 2030 and a fully built-out trans-Canada fast-charging infrastructure, supplemented by 2,000 kilometres of new bicycle rights-of-way and infrastructure support.

• Reduce the greenhouse gas emissions of steel and cement production by 50% or more by 2030.

• Support the economic conversion of Canada’s oil patch to a post-petroleum era by redeploying expertise and resources to growth sectors and high-value-added opportunities such as the burgeoning carbon fibre market.

• Increase the supply of critical minerals while exemplifying the social, ethical and environmental attributes of what mining must become in a sustainable economy.

• Convert 30% of agricultural land to low-till cultivation practices by 2030.

Compared with current climate-change-response spending in Canada of $15 to $25 billion per year, the Corporate Knights plan has capital requirements of $126 billion per year over the next critical decade. This aligns with other estimates that an effective emergency response to climate change will require investments in the order of 5 to 6% of GDP.

How this total is split between public and private sources of capital will depend on policy and will vary by sector, but the overall effort required is still within the range of our previous efforts to respond to existential threats and broken economies. A $126-billion-per-year investment plan for climate and economic renewal is certainly possible in Canada, an economy with an output of $2 trillion per year and capital investments of $450 billion per year, and whose government alone just spent $500 billion in an emergency response to the COVID pandemic.

Unlike most of the expenditures on COVID, many of the investments needed to respond to the climate emergency would not only pay for themselves but would position Canada for decades of economic prosperity. As the world ramps up its efforts to address the climate crisis in the 2020s, it will create a $9-trillion-per-year market for smart building solutions, electric vehicles and related batteries and infrastructure, renewable grid technology, critical minerals, sustainable biotechnologies, plant-based protein and other building blocks of the post-fossil economy.

Just as the successful economies of the 20th century were those that were able to capitalize on fossil fuels and combustion technologies, the successful economies of the 21st century will be those that have the technologies and know-how to operate within planetary boundaries.

As we have witnessed in Pakistan and countless other places in recent months, climate chaos is relentless, unforgiving and on the march. The status quo is no longer the safe option, and it hasn’t been for some time now. And in any case, as David Brower also once remarked, “I don’t think we were built to be safe; I think we were built to try things.”

Ralph Torrie is the research director at Corporate Knights.

Related post:

For more on the plan visit corporateknights.com/investmentplan.

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What’s the most effective way to spend that money? Corporate Knights’ Climate and Economic Renewal Plan lays out six major green investments.

There’s no place like green homes.

To make this country’s buildings more comfortable, affordable and energy-efficient in all weather, we’ll need to spend $57 billion a year on retrofitting and electrifying 10 million homes, plus $22 billion on commercial buildings. That includes phasing out old heating and lighting systems for modern, efficient systems with smart energy management.

Full of (clean) energy.

Around 80% of Canada’s power supply comes from non-emitting technologies (renewables, nuclear and hydro), and the country has a goal to hit 90% by 2030. To get there, Canada will need to spend $24 billion per year on expanded renewable capacity and interprovincial electricity connections to ensure clean electricity supply is evenly distributed.

That new electric vehicle smell.

By 2030, hopefully, there will be 10 million EVs (as well as many more bicycles) on Canadian roads. But to get there, we’ll need to spend $16 billion per year on a range of measures that include building out our charging network. We can encourage cycling by creating an additional 2,000 kilometres of bike lanes.

This transition will run on batteries.

We need to (sustainably) shore up our supply of critical minerals that will go into batteries that power EVs. The global market for lithium-ion batteries is expected to grow to US$135 billion by 2031, and Canada has all the minerals needed to make EV batteries.

Not- so-heavy industry.

To cut emissions from heavy industries like cement and steel by 50% by 2030, we’ll need to spend $5 billion per year. We should also support the burgeoning carbon fibre market (a strong material made from bitumen) to shift Canada’s oil industry into a post-petroleum future.

Bet the farm on climate.

We can help farmers make their operations more sustainable, using regenerative methods (such as planting cover crops) that store more carbon in the ground while cutting back on the overuse of synthetic nitrogen fertilizers. This will require a $3-billion-per-year investment.

For more on Corporate Knights’ Climate and Economic Renewal Plan, read ‘The price of making peace with nature,‘ from CK’s research director Ralph Torrie.

The post These 6 green investments would kick-start Canada’s economic renewal appeared first on Corporate Knights.

In one year’s time, countries, companies and communities will try to launch the sustainable revolution, to put the market into service of humanity and once again have society’s values drive value.

Over my lifetime, the population of mammals, birds, fish, reptiles and amphibians is estimated to have fallen by 70%. Perhaps because they were not formally, financially valued, these losses were initially downplayed, and their cause was treated as an issue for another day. But now the effects of climate change are beginning to affect assets that have a market price, making the scale of the looming calamity more tangible.

With the COVID crisis exposing the tragic folly of undervaluing resilience and ignoring systemic risk, society is beginning to place greater value on sustainability, and that’s a precondition to solving the climate crisis.

Thus far, efforts to address climate change have struggled between urgency and complacency. These tensions reflect the common challenges of value. Human frailties create a tragedy of the horizon. That means the catastrophic impacts of climate change will fall largely on future generations. Market failures create the tragedy of the commons, and this arises when individuals, acting in their own self-interest, undermine the common good by depleting a shared resource.

Now there is a way out. If society sets a clear goal, it will become profitable to be part of the solution and costly to remain part of the problem. The more credible our government commitments to net-zero, the more investors will pour money in, and the more a virtuous circle of large scale and greater efficiency will operate, but that leads directly to the second challenge, which is politics.

We need a strong consensus to break the tragedies of the horizon and the commons. So far, over 126 countries have set net-zero targets. And there are a variety of industry groups and financial institutions that are beginning to commit to doing their part. Momentum’s building, but the reality is that even more is required. Social movements like Fridays for Futures, which Greta Thunberg started, give hope that society won’t settle for worthy statements followed by futile gestures. The connections between changing environmental values, changing technologies and the changing environmental politics can drive self-reinforcing cycles. Greater consumer demand for sustainable products increases the economic returns to green technologies and the political returns to green policies, and this is how a path to a more sustainable world begins.

In this context, finance can play a decisive role. The more the financial sector focuses on the transition to net-zero the more new technologies will be financed in anticipation of climate action. Sustainable investing can shift from the fringes to the mainstream, driving the transformation. This is how values drive value. And that’s why our objective for Glasgow next year [at, COP26, the 26th UN Climate Change conference] is to put in place the foundation so that every financial decision takes climate change into account.

On returns, addressing climate change is ultimately about delivering what society values. This means that the transition to a green economy can be the greatest commercial opportunity of our time. We’ll increasingly view companies and assets through the lens of the climate transition. So who is on the right and the wrong side of climate history?

If you work for a company, find out whether it has a plan to transition to net-zero. If so, great – how can it be made better? And if it doesn’t have a plan, why not? Secondly, wherever you put your hard-earned savings – in a bank, a pension pot or the stock market – find out whether it’s being managed towards net-zero. And if not, why not?
And third, ask not what the climate is doing to your country, but what your country can do for the climate.

We need a world where we’re no longer solely guided by measures like GDP, that were devised a century ago when the earth seemed immortal and the social norms of the market felt immutable. A market in the transition to net-zero is now being built on these foundations of reporting risk management and returns. In this way, private finance can bend the arc of history towards climate justice, and value can serve values.

The post From climate crisis to real prosperity appeared first on Corporate Knights.

-Hon. Bill Morneau, Minister of Finance, Canada

Over the last few months, policymakers around the world have taken unprecedented action to protect their people from the COVID-19 pandemic. As we move beyond the acute phase of the health crisis phase, countries are now designing recovery plans to deal with the economic fallout.

Many of the world’s leading economic and political authorities, including the International Monetary Fund, the International Energy Agency and our G-20 peers, are leading calls for governments to make jobs-rich green recovery. In Canada, more than 40 major business leaders are advocating for a bold green recovery to help get people back to work and bolster Canada’s chances of playing to win in large and growing low-carbon markets where we have competitive advantages.

As policy-makers design economic recovery plans, they are making decisions that will cast the die of our economy for decades to come. For this once-in-a-generation investment, it’s vital that we look ahead and invest in building an economy that’s ready for tomorrow, instead of spending large amounts of public money on infrastructure and technologies that will soon be outdated.

The Building Back Better plan set out in this report is a synthesis of seven white papers published between April 22 and June 3 . Our plan makes it clear that governments have a unique opportunity today to boost economic growth, create millions of new jobs and position Canadian businesses as suppliers rather than buyers in tomorrow’s economy.

This document, put together with input from more than 100 of Canada’s most inspired minds, outlines a series of investments that the federal government could make to set Canada on a path to a resilient, net-zero economic recovery. The areas for investment for the Building Back Better Canada Plan include the following programs:

• deep retrofits of homes and workplaces
• accelerated electric vehicle (EV) uptake
• support for active mobility (e.g. walking and biking)
• greening of the electricity grid
• decarbonizing of heavy industry
• nature-based climate solutions for our forests and farmland, and
• making Canada a leading supplier of EV components and zero-carbon natural resources.

Combined, the proposals create or maintain more than 6.3 million years of employment and crowd in $681 billion of additional investment in the next decade. They would also deliver $44 billion annually in energy savings to Canadians while reducing greenhouse gas (GHG) emissions by 242 megatonnes (Mt) of CO2e per year by 2030 and setting a course for a zero carbon Canada within a generation. The proposals are different from what the federal government currently has in place in two important respects: they go further on emissions reductions and they go to the heart of our industrial policy, targeting investments in high-growth areas where Canada has strong competitive advantages to compete and win in global markets.

The federal investment of $11 billion per year (0.5% of GDP) for 10 years would trigger total investments of $790 billion, including both public and private, over the 2021-2030 period.

The federal investment could be paid for by issuing sovereign green bonds or closing federal tax loopholes and eliminating current Canadian corporate tax breaks, or some combination thereof.

Stronger use of regulations or higher carbon pricing could potentially reduce the cost of the plan for the federal government, but this would likely result in delays – an important consideration for stimulus spending, as well as for ensuring Canadian businesses don’t miss the low-carbon economy train that is speeding out of the station.

The federal contribution would be front-loaded, with almost 40% of it booked in the first two years and half of those early funds earmarked for deep building retrofits, which deliver broad and immediate job benefits (including for the more gender-diverse design and architecture industry) with strong economic multipliers. A study by the International Monetary Fund on climate policy and recovery found that “environmental measures have been a valuable part of fiscal stimulus packages,” emphasizing that “energy efficiency investments are particularly well-suited to stimulus spending,” because they can be executed quickly. 

Aside from jobs, this burst of investment would help to create economies of scale and bring costs down, especially for building energy retrofits.

Fully $40 billion of the $109 billion federal portion of the recovery package is earmarked to catalyze commercial-scale investments to ensure Canada is a supplier rather than buyer in the booming global markets for zero-emissions vehicles, clean fuels, property technologies and essential materials for the low-carbon economy.

The capital expenditures projected for these proposals are well within the bounds of routine levels of investment in Canada, which exceed $400 billion per year. For example, in the residential sector, Canadians spend $60 billion annually to renovate their homes. Building Back Better Homes and Workplaces would redirect 10% of existing renovation spending in the first year, rising to 60% in the fifth year and declining to 15% of current investments in the 10th year. During the transition to a fossil-free electric power system throughout Canada, the Greening the Grid proposal for investments in solar, wind and storage capacity averages $12.9 billion per year in a sector that routinely absorbs $22 to $23 billion per year in capital expenditures. Combined with other expected investments in this sector, including those needed to finish hydro megaprojects already underway, total investment in the electric power sector is expected to grow by about 20% during the transition to a carbon-free grid.

Our proposal is that the Building Back Better Canada Plan would ensure that, starting now, integrated and mutually supportive zero-carbon investment programs support Canada’s move to net-zero emissions while delivering strong risk-adjusted returns to Canadians through their savings and pensions.

In addition to direct federal investment, it is essential that the federal government set the right policy framework to drive the transition to net-zero and use its spending power to encourage provinces and municipalities to follow suit by attaching green strings as a condition for accessing federal stimulus funds. The need for supportive policy spans across all the proposals included here, from model building codes and zoning for zero-carbon affordable housing, to zero-emissions vehicles mandates, fast and fair power-grid access for storage and renewables, recalibration of agricultural subsidies, circular economy targets, and large-scale green government procurement, including embodied carbon of building materials. Providing a clear policy direction to drive toward a zero-carbon economy is essential to sustaining the momentum and securing investor confidence.

This Building Back Better Plan is a different kind of plan from what happened following the global financial crisis of 2008-9, when just 8% of Canada’s stimulus contributed to sustainability and resiliency, compared to 12% in the U.S., 38% in China and 59% in the European Union, according to HSBC Global Research.

This time we have a government that was elected with a strong mandate for climate action and a clearly stated commitment to transitioning Canada to a low-carbon economy. The government is rightly focused on getting the economy growing and people back to work as quickly as possible, especially women (who lost more than twice as many jobs as men). The best way to do that is with investments that profit from the immediate returns from energy efficiency and significant savings from steeply declining renewable energy costs.

 Ipsos global poll: 61% of Canadians said they agree or tend to agree that “in the economic recovery after COVID-19, it’s important that government actions prioritize climate change” – and that was without being given information about the job-rich nature of a green recovery.

 

Some of the world’s leading economists recently completed an analysis of possible COVID-19 economic recovery packages. They concluded that compared to traditional fiscal stimuli, green projects create more jobs, deliver higher short-term economic returns per dollar spent and deliver higher long-term cost savings. This finding is also supported by McKinsey’s research,  which found that a low-carbon recovery could not only initiate the significant emissions reductions needed to tackle climate change but also create more jobs and economic growth than a high-carbon recovery would.

Applying a climate lens to economic recovery can help us identify some of the best opportunities to get people back to work immediately while building a more resilient Canada for the long-term, ready to capitalize on new global growth trends.

Chart notes: (1) Federal contribution is front-loaded in first two years to maximize stimulus impact, bring costs down and incentivize complimentary policies essential to crowd in private capital and sustain the momentum. (2) Includes direct and indirect jobs as per Statistics Canada and Torrie Smith Associates analysis. Job years correspond to 1 job for 1 year; job multipliers measure only employment created during spend. In practice, economic stimulus/recovery could create jobs that become self-sustaining, resulting in more job years than shown here. (3) Based on gross-value-added (GVA) multiplier at a sector level as per McKinsey & Co. (4) Based on analysis by Torrie Smith Associates available here: https://corporateknights.com/wp-content/uploads/2020/04/CK-Residential-Retrofit-Calculator-200602.xlsx, https://corporateknights.com/wp-content/uploads/2020/04/CK-Commercial-Building-Retrofit-Calculator-200422-1.xlsx, https://corporateknights.com/wp-content/uploads/2020/04/Carbon-Free-Grid-Calculator-200527.xlsx, https://corporateknights.com/wp-content/uploads/2020/05/CK-Transport-Calculator-200611-V9.xlsx (5) Most of the greenhouse gas reductions from these investments would be concentrated downstream in what is known as scope 3 emissions, resulting from displaced emissions by light-weight carbon fibres as one example.

Global green recovery efforts already underway

• On May 27, the European Commission proposed a €750 billion ($1.14 trillion) recovery fund to steer the continent toward carbon neutrality by 2050, with a quarter of the plan earmarked for the EU Green Deal (with energy efficiency retrofits being the top budget item).

• On May 26, France announced an €8 billion ($12 billion) plan to accelerate the transition to electric cars, which will include increasing the monetary amount buyers can receive as a state incentive toward the purchase of an electric car.

• German Chancellor Angela Merkel has indicated that her government aims to implement a stimulus package that “helps the economy’s move toward climate neutrality,” saying “it will be all the more important that if we set up economic stimulus programs, we must always keep a close eye on climate protection.” Germany’s €130 billion stimulus package includes massive investment in EV charging stations, doubling the incentive for EV purchases from €3,000 to €6,000 and the establishment of a €50 billion futures fund for R&D investment. These are in addition to demand-side policies, including €300 for every child in Germany and a time-limited reduction in the VAT from 19 to 16%.

• Denmark has allocated 30 billion kroner ($6 billion) for green building renovations, with a short-term priority to upgrade 72,000 public housing units in 2020/21.

The post Report: Building Back Better with a Bold Green Recovery appeared first on Corporate Knights.

When the pandemic hit, Canadians were spending over 200 hours per year in their cars, driving a total of more than 300 billion kilometres a year – 2,000 times the distance from the earth to the sun. The cost of owning and maintaining private automobiles comprises a larger share of household spending than food, clothing or any other household expense except shelter, even without including the share of taxes that goes to building and maintaining the transportation infrastructure. Yet cars are parked 95% of the time and are increasingly slowed down by traffic congestion during the 5% of the time they are actually being used. 

We know that the gasoline-powered mobility system is not sustainable. Transportation accounts for 25% (185 megatonnes of carbon dioxide equivalent) of our total national greenhouse gas emissions, and between 1990 and 2018, GHG emissions from transportation grew by an eye-watering 53%. The trend is sobering and should make us reflect. In cities, our cars, SUVs and pickup trucks as well as the light freight vehicles that deliver our e-commerce purchases account for as much as 50% of the urban carbon footprint, bringing with it the air pollution that shortens the lives of children and adults alike. 

Canada’s aspirations to make the transformation to a low carbon economy are not achievable without deep reductions in personal vehicle emissions. Transportation remains a major and growing source of GHGs and air pollution. When we turn our attention to how we will restore our lives and our economy once the pandemic passes, the future of the system of our transportation and mobility services emerges as a key question. The post-COVID recovery presents a historic opportunity to make major improvements in Canada’s transportation system.

What would it take?

The Active and Safe Mobility Fund and Free and Safe Transit Fund

Physical distancing has encouraged new habits that depend on walking and cycling rather than driving and taking public transit. Let’s try to keep some of these new habits.

A number of cities are enabling more people to walk and cycle while maintaining physical distance by converting roads into pedestrian and cycling areas. There are several cities globally that are implementing low-emission zones (LEZ) or zero-emission zones (ZEZ), sometimes called exclusion zones. Currently, there are no such zones in Canada. –Some cities, such as Vancouver, are considering zero-emission zones, but no formal zones have been implemented. Low-emission zones benefit the health of residents thanks to reduced air and noise pollution resulting from a general reduction in vehicles entering the area. They can also be a source of revenue for the city implementing the policy, money that could in turn be redirected toward environmental initiatives and perhaps electric vehicle incentives.

In some cities, the thinking has shifted from giving preferential treatment to zero-emission vehicles to prioritizing pedestrians and cyclists and other active mobility as a way of getting around. For example, Milan has announced that over the summer, 35 kilometres of streets will be expanded for increased cycling and walking space to protect residents as COVID-19 restrictions are lifted. Closer to home, Vancouver banned vehicular traffic in Stanley Park, with the roads remaining open to joggers and cyclists. The change is temporary, but there are voices calling to implement the policy permanently. In general, active mobility corridors have several benefits, including reduced air pollution, greater opportunities for outdoor recreation in cities and incentives to use active mobility modes for transport instead of cars – once again improving the general health of the population. And spaces for active mobility where the air is clean may also play an important role for recreation that is affordable for families living with the economic fallout of COVID-19. That is why our first proposal for creating jobs by building back better mobility is for an Active and Safe Mobility Fund. 

This fund would support communities by creating permanent corridors for safe and active mobility for people walking and cycling to work and school, while maintaining physical distancing. The grants would be available for all permanent active mobility corridors that municipalities implement within the next 12 months. This program would put people to work right away by leveraging the pressing need for safe, active mobility. 

In addition, we are proposing a Free and Safe Transit Fund. This fund would ensure that people have free access to transit throughout all of Canada’s municipal transit systems for one year. It would require $6 billion in stimulus spending, which would flow directly into the pockets of people, with a strong tilt toward lower-income groups, where the GDP multipliers are highest. This fund will support essential and other workers who rely on public transit at a time when every dollar counts. It will also ensure that students are able to get to school without worrying about the cost of transit fare. The fund will guarantee the revenues that user fees have previously represented. It will also provide the cash needed to enable transit authorities to hire additional staff to clean the surfaces of vehicles and cars.

Where greater distances make walking and cycling unfeasible, and where transit is not able to meet mobility needs, we need to take a deeper look.

Electric vehicles are a must-have 

The reductions in the cost and improvements in the performance of electric vehicles are reminiscent of an earlier historical period, exactly 100 years ago. In 1920, in the wake of the global influenza pandemic, relatively few Canadian households owned a car. Ten years later, half the households in Canada had a private automobile. Every year throughout the 1920s, the price of owning a car dropped and the comfort and performance of the cars improved. We are at a similar fork in the road with electric vehicles. They are so much more efficient than fuel-powered cars that in spite of the higher cost of electricity, they cost much less to operate than cars that run on fossil fuels (about 80% less) and need less  maintenance. The total cost of ownership over the lifetime of an electric car is now lower than for a gas-powered vehicles in most cases, and sticker-price parity with gas-powered cars is expected within the next three or four years. 

There is another interesting parallel with the early history of the car in Canada. In the 1920s, the roads infrastructure and fuel distribution systems to support the burgeoning car population lagged behind the growth in car sales, as did consumer credit support for car purchases. Governments scrambled to build and pave the roads, and financing innovations paved the road to affordability for average families. Electric cars now face a similar situation – the cars are ready and Canadians are ready, but the financing and charging infrastructure lags behind.

By switching from gas and diesel to electricity for transportation wherever it’s feasible, it is possible to save money while making our drive to a net-zero emissions economy a reality. The situation is reflected in the federal government’s current goal for zero-emission vehicles (ZEVs), which is to capture 10% of all passenger vehicle sales per year by 2025, 30% by 2030 and 100% by 2040. 

However, Canada’s rate of zero-emission car, truck and bus deployment lags far behind that of other cold-climate peers – like Norway, where in 2019 electric vehicles represented 56% of all new cars sold (with the goal of electric vehicles being 100% of all new car sales by 2030). In Canada, electric vehicles, including hybrids, represent only 3.5% of passenger vehicle sales. In 2018, the market share of battery electric vehicles (BEVs) in Norway was 29.5%, while Canada lagged far behind at only 1.2%, in the company of the United States (1.62%) and Germany (1.05%). 

If our goal is to reach net-zero GHG emissions by 2050, why is Canada stalled? There are many moving parts to the mobility and transportation market, but there are at least four areas we need to improve: 

• providing loan guarantees to buyers where credit markets are still emerging (i.e. leasing and lending structures);
• accelerating investment in public infrastructure on which carbon-free vehicles depend (i.e. EV charging stations); 
• broadening eligibility for incentives to make up for the difference in price between new carbon-free vehicles and internal combustion vehicles (i.e. including fleets as eligible for EV incentives); and
• attracting investment to establish competitive supply chains (i.e. to process minerals needed to make batteries, as well as make and assemble components for EVs and charging stations and to assemble electric vehicles).

Canada has  programs in place to address some of these elements but needs to do much more. So let’s look at how stimulus programs by the federal government can contribute to creating efficient credit markets; increase EV purchases by individuals, businesses and public institutions; build charging infrastructure; and attract investments to create supply chains for a variety of EVs, including private automobiles, transit and school buses, and light freight trucks.

Establish efficient carbon-free lending for EVs

Let’s start with the consumer who wants to buy an EV. Buying a car became easier over the 20th century, ever since Henry Ford put his mind to making the purchase of a Model T something his employees could manage on the salaries he could afford to pay them while still keeping the price of the Model T down. To make things work, his employees needed to pay for their cars over time. The solution was for the banks to treat the car as an asset that could be used to underwrite the loan needed to buy the car. Doing this was a little tricky because in order to have “security,” the banks needed to know the value of the car from the time it rolled off the production line and was purchased, and each year thereafter for the duration of the loan. With this information, a bank could lend money for a car purchase because if the borrower could not pay back the loan, the bank could take back the car and sell it to repay what was owed. The risk of default was therefore very low, and as a result buying or leasing a car could cost only a little more than the “sticker price.” 

Fast forward to today.

Anyone who has tried to lease an EV in Canada has experienced sticker shock. And the shock is not from the price difference between the EV version of a car model and the ICE edition. The incentives mentioned above address most of that gap. The shock is from the cost of financing the vehicle: banks currently have little historical data on what the value of an EV will be at the end of the lease period, so the monthly lease payments for an EV are much higher, because of unrealistic worst-case actuarial assumptions that the EV will experience maximum depreciation over the course of the lease. That means monthly payments for an EV lease are often twice those of its ICE equivalent. Just like when Henry Ford started selling Model Ts, banks don’t yet have sufficient information on the value of an EV in each year of life after purchase, to the end of its useful life. Similar to our deep-retrofit finance proposal, we propose a federal guarantee of EV automotive loans over a period of three years to enable banks to collect data on the real residual value of EVs so that they can be financed in the same way as ICE vehicles are today.

Incentives for carbon-free ride sharing

Electric vehicles are starting to make their way into the Canadian market, but, as stated, we have not been quick off the mark. In 2018, only 1.2% of new motor vehicles registered in Canada ran completely on batteries, with no reliance on an internal combustion engine. That was a near doubling of sales from 2017, but we are a long way from the market share penetration of battery electric vehicles (BEVs) in another cold, sparsely populated, oil-producing economy: the market penetration of BEVs in Norway was 25 times higher than ours in 2018, at 29.5% of all registered cars. And in Canada, the up-take is much higher in some provinces than others, with 97% of EVs registered in 2018 in three provinces: Quebec, Ontario and British Columbia. 

One way to make progress fast is through car-sharing services such as EVO and Communauto, which have grown in popularity. These services enable us to access a  fleet of shared cars when we need it. They are hugely popular in cities like Paris, where many people have forgone the financial burden of owning, maintaining and insuring a car and the hassle of finding and paying for parking. Instead people are opting to use the EV fleet operated on behalf of the city of Paris. These EVs are parked next to charging stations in hundreds of prime locations designated by the city. 

Ride-hailing services such as Uber and Lyft have also grown quickly. Like car-sharing services, these are part of the growing category referred to as “mobility as a service” (MaaS). They have proven to be popular, but today, more than 50% of vehicle kilometres travelled (VKTs for short) are with no passengers in the vehicle. This has led researchers to conclude that ride-hailing services produce 69% more emissions than the trips they displace. That’s a steep price to pay for the convenience of instant mobility when the cars that provide that service are powered by ICEs. So to make ride hailing more economical for drivers and lighten these services’ environmental and health impacts, converting these cars to electric vehicles is a priority. For this reason, we propose that the existing federal zero-emissions vehicles program be extended to include ride-sharing and ride-hailing fleets (and that these incentives be available upfront rather than after purchase). Because BEVs cost less to operate than ICE vehicles, this program puts money in the pockets of drivers within one year.

On your marks, get ready, install more EV charging stations

Charging stations, either at home or on the way to and from our destinations, need to be available for us to be able to use our EVs – just as is the case with ICE cars and gas stations. In light of the slow growth in EV use in Canada, it’s not surprising that Canada’s position on EV charging stations also needs a big boost. 

With 5,004 charging stations, Canada’s ratio of charging stations to 100,000 inhabitants is 13.4, which is 35% that of France, 41% that of Germany, 47% that of the UK and only 7% of that of Norway (which has 186 charging stations per 100,000 inhabitants!).   The current focus of the federal Zero Emission Vehicle Infrastructure Program (ZEVIP)*, targeted at owners and occupants of multi-unit residential buildings (MURBs), is primed and ready to support the installation of charging stations within the year. But more could be done to speed up the deployment of charging stations where people live and work.

The ZEVIP program has $130 million in funding over five years and covers 50% of the cost of charging installation for eligible transit, workplace, fleet, on-street and multi-unit residential projects.  To accelerate the stimulus impact of installation jobs over the next 12 months, this program could be expanded to cover 100% of the expense of installing charging infrastructure (80% grant, 20% loan guarantee), with a focus on fleets and professional drivers to help reduce business costs during the economic downturn. The program could also be expanded to enable transit operators to prepare to operate electric buses and for the next 12 months – as we have recommended for EV purchase incentive– should be based on delivering funding in advance of the EV installation project, rather than after project completion.

To grow Canada’s EV charging infrastructure to levels approaching those of other advanced economies, this program could include hard targets of 1,500 public fast-charging stations; 10,000 stations for cars, SUVs and pickup trucks; 1,000 for fleet use, including local delivery vehicles; and 1,000 for transit to support bus electrification over the next 12 months. 

On your marks, get set, electrify the Trans-Canada Highway

Public charging stations are a key piece of the puzzle to ensure we get the electric vehicle growth we need. Connecting us from West to East and acting as the backbone for many roads “inland” is the Trans-Canada Highway. But efforts to electrify the Trans-Canada have not been realized, and there are interoperability issues with current charging stations. In some cases, matters are complicated by contractual arrangements for highway rest stops that are physically on Crown land but are governed by long-term leases held by companies that sell gasoline and diesel as well as provide food and services to travellers. With COVID-19, traffic to these rest stops is, and is likely to remain, depressed. 

For this reason, we have proposed the Electrify the Trans-Canada Highway program, which would leverage existing programs to deliver a public alternative in the form of 500 ultrafast charging stations, each containing 10 slots to charge passenger vehicles in five minutes and two slots for heavy freight haulers ultrafast charging. This would do for electrified transportation what the National Dream did for rail. 

Leveraging Canada’s EV supply chain to create an EV manufacturing hub

Our last proposal is to be ready to seize the opportunity to attract investment to establish a competitive Canadian supply chain for electric vehicles. Canada has a number of companies today that are making and assembling parts for electric buses and light freight trucks. It also has tier-one automotive manufacturers, as well as world-class nickel resources, which are key minerals for electric batteries. 

As part of a low-carbon recovery, Canada can build on this advantage to establish an EV manufacturing hub to harness the economic benefits of the growing global market for ZEVs. Creating an EV manufacturing hub could be accomplished with a dedicated industrial development strategy to identify potential clusters of expertise for expansion. Stimulus could play a part in this through a federal incentive of 50% for the cost of new facilities that create jobs (half grant, half loan guarantee). Ensuring that Canadians have the benefits of our move to zero-carbon transportation requires us to be competitive and ready to attract the industrial infrastructure for carbon-free vehicles and trucks. 

Building Back Better Transportation

The Opportunity

Tens of thousands of jobs could be created over the next 12 months with programs to support the electrification of transportation and construction of new cycling infrastructure. Many of the investments, such as those in charging infrastructure, facilitate and leverage much larger investments in the electrification of the transportation sector. Incentives for companies that are manufacturing EV components can help put Canada on a low-carbon recovery pathway and create good jobs. Transportation currently accounts for 25% of Canada’s emissions. These investments could reduce GHGs by at least 12 Mt CO2e per year by 2030, improve air quality, save drivers money and benefit people’s health by making active and public transportation more accessible. 

The Proposal

Stimulus investments to create jobs

The Government of Canada has made commendable progress over the last five years in the establishment of programs to increase the number of zero-emission vehicles (ZEVs) on Canada’s roads. To stimulate jobs over the next 12 months, these programs need to be turbocharged in a time-limited way, including:

1. Active and Safe Mobility Fund: Cycling and other modes of active transportation are important for reducing congestion and GHG emissions in cities, and can provide economic opportunities for tourism in smaller communities. Many municipalities have a roster of cycling infrastructure projects awaiting funding. Federal funding for projects that can begin construction in the next 12 months could create construction jobs, enhance cycling infrastructure and improve the health and safety of residents.Cost: $2 billion
2.  Free and Safe Transit Fund: This proposal would ensure that people have free access to transit throughout all of Canada’s municipal transit systems for one year.  Funds would flow through existing programs It will also provide the cash needed to enable transit authorities to hire additional staff to clean the surfaces of vehicles and cars.

Cost: $6 billion

3. Installation of charging infrastructure (national): The current Zero Emission Vehicle Infrastructure Program (ZEVIP) and Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI) cover 50% of the cost of charging installation. To kickstart installation jobs in the near-term, the government could launch new fast-track requests for proposals (RFPs) and would provide the financing in advance for any proponents able to complete projects over the next 12 months and ensure the program is sufficiently funded to support eligible projects. A loan guarantee should be provided for the additional cost for proponents that need it.

To have the desired job-creation impact in the near-term, the delivery of the program funding will need to be streamlined and efficient, using financial institutions to speed delivery if needed. The priority should be placed on projects that help fill gaps in the current Trans-Canada network and improve interoperability. 

4.Installation of charging infrastructure (local): To kickstart installation jobs in urban areas, federal support for the cost of installation and electricity upgrades could be provided to building owners, homeowners, municipalities, utilities and other businesses. This should include DC and Level 2 chargers and be in the form of 50% grant and 50% loan guarantee for projects that can be completed over the next 12 months. Electric vehicles can also provide distributed storage and peak management services to the new electricity system that is emerging, but only if the charging infrastructure is “vehicle-to-grid” ready. 

5.Incentives for ZEV fleet purchase: The current iZEV program provides a point-of-sale rebate for the purchase of a ZEV up to $5,000 per vehicle. Over the next 12 months, passenger fleets could be further incentivized to purchase ZEVs by: doubling the incentives from $5,000 to $10,000 for fleet vehicles

• doubling the incentives from $5,000 to $10,000 for fleet vehicles (for 12 months)
• providing a loan guarantee for the remainder of the vehicle cost, secured by the government;
• simplifying the process for consumers with a one-window approach for the loan and rebate at the time of purchase; and 
• removing the cap on the number of vehicles per business for “mobility as a service” companies such as car sharing, taxi companies and ride hailing to support uptake among those for whom the current tax incentive does not apply.

This could help these businesses and drivers save an estimated $6,000 to 8,000 per year per vehicle on operating costs and support businesses that manufacture ZEV components. In addition, a new rebate should be available for heavy duty vehicles to support the conversion of delivery truck fleets. This rebate should significantly help close the gap between the cost of purchasing fossil fuel vehicles compared to ZEVs.  

  Recovering with zero-carbon transportation jobs

6. Creating an EV manufacturing hub: Canada already has businesses with expertise in batteries, auto-parts manufacturing, assembly, autonomous vehicle technology and materials. As part of a low-carbon recovery, Canada can build on this advantage to establish an EV manufacturing hub to harness the economic benefits of the growing global market for ZEVs. This could be accomplished with a dedicated industrial development strategy to identify potential clusters of expertise for expansion and a federal incentive of 50% for the cost of new facilities that create jobs (half grant, half loan guarantee). 

7. ZEV Mandate: Canada can send a strong signal to ZEV suppliers by adopting a federal ZEV mandate that ensures Canada meets its targets for zero emissions light duty vehicles of 10% by 2025, 30% by 2030 and 100% by 2040. A mandate for manufacturers would ensure that Canadians have access to ZEVs and create additional incentive for the establishment of an EV manufacturing hub. 

As was the case with our proposals for green buildings and green power, the same kinds of “new normal” innovations have been making their way into the mobility sector for some time – changing how we access transportation services. These big changes are coming to the array of ways we rely on to access our workplaces, to see friends and family, for freight delivery to bring the food we eat to nearby stores, to deliver parcels and all of the millions of moving parts in the transportation system that keeps the economy going.

*Program name corrected.

To learn more, explore our transport calculator:

CK Transport Calculator

Ralph Torrie is senior associate with Sustainability Solutions Group and partner at Torrie Smith Associates.

Céline Bak is the founder and president of Analytica Advisors.

With files from Gilliean McEachern,Toby Heaps, Aleena Naseem and Laura Väyrynen

Notice to reader: Please be aware some of the figures and other details in this white paper have been updated in the Final Report to reflect feedback.

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