Ahead of the publication of Prime Minister Mark Carney’s climate competitiveness strategy, his energy minister offered some hints about what will be included when it is introduced in Tuesday’s budget.
Minister for Energy and Natural Resources Tim Hodgson spoke on Wednesday ahead of meetings with G7 officials and environment and energy ministers.
Stakeholders in the environment and cleantech space had hoped Ottawa would release the strategy ahead of the two-day G7 meeting, which officially begins Thursday in Toronto.
But without specifically mentioning the climate strategy, Hodgson spoke of three levers that guide the government’s work.
One involves “tactically using” public funds and tax credits to reduce risk and spur investment in “one-of-a-kind projects,” Hodgson said.
The goal, the minister said, is to ensure that the Canadian economy “remains competitive and that Canadian products compete (and win) in a low-carbon world.”
The minister suggested Canada’s burgeoning carbon capture, storage and removal sector could be scaled back and expanded with government funding.
He cited Arca, a Canadian company that on Wednesday announced it had signed a deal with Microsoft to remove carbon dioxide from the atmosphere. The company received funding from NorthX Climate Tech, a Canadian organization supported by Natural Resources Canada.
Hodgson said Ottawa is also focused on creating an environment of regulatory certainty that requires predictable policies, faster timelines and reliable permits. The federal government is already in the process of implementing its law to accelerate important resource projects.
The minister said the final lever is the use of artificial intelligence to make energy systems “smarter, faster and more resilient.”
“AI is already reshaping the way we produce, move and consume energy,” Hodgson said. “It is helping operators predict grid demand in real time, accelerating the discovery of materials for better batteries and optimizing renewable energy such as wind farms.”
Anniversary of draft emissions limit
A senior federal government source who is not authorized to speak publicly says the first two levers – incentivizing greater investment in cleantech innovation and providing certainty to industry – are “relevant” to the climate competitiveness strategy.
Hodgson’s comments did not mention the future of the proposal to limit industrial emissions. The budget date, Nov. 4, marks one year since the federal government released its proposed regulations to impose a strict limit on emissions from the oil and gas sector, the largest share of Canada’s emissions.
Louise Comeau, a former federal government adviser on climate policy, said Hodgson is signaling that the Carney government favors carbon capture and storage over an emissions cap.
Carbon capture, which has not yet been demonstrated at scale, has been proposed as a way for the cement, steel and oil and gas industries to maintain or increase production with lower emissions.
“I don’t think it’s a secret that the proposed cap on oil and gas will not be regulated in favor of investment in carbon capture and storage,” said Comeau, a former member of Ottawa’s Net Zero Advisory Body.
Hodgson also mentioned several other low-carbon energy generation initiatives that Ottawa is leading, including nuclear plant life extensions, small modular reactors, the development of natural gas with carbon capture and storage, and the integration of grid-scale battery storage.
Prime Minister Mark Carney did not confirm whether he would maintain Canada’s 2030 and 2035 emissions targets in his response to a question about changing the targets on Monday. Pembina Institute transportation program director Adam Thorn discusses how Carney’s pause on the federal electric vehicle mandate jeopardizes goals and what Canada can still do to save emissions.
For heavy transport and other sectors where reducing emissions has been a challenge, Hodgson talked about clean hydrogen and sustainable biofuels.
Recent analysis by the Canadian Climate Institute has shown that Canada will not meet its 2030 climate goals, where Canada has committed to reducing emissions by at least 40 per cent below 2005 levels.
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At the rate Canada is going, according to the institute, the country would be lucky to get more than halfway there.
The federal government’s own greenhouse gas projections from January show Canada will fall short of its climate goals.
Since Carney took office, he has canceled the consumer price of carbon and halted the electric vehicle availability standard, without proposing new measures to make up for lost emissions reductions.
