The biggest risk of Canada’s net-zero strategy? Not reaching net-zero

This article was originally published in The Globe and Mail, March 17, 2022.

By: Perrin Beatty, Heather Chalmers and Matthew Wetmore

Perrin Beatty is president and CEO of the Canadian Chamber of Commerce. Heather
Chalmers is president and CEO of GE Canada. Matthew Wetmore is national managing
partner of industries and regions at PwC Canada.

Canada’s business community is concerned about the country’s plan for net zero – but not
for reasons you may think.

As members of the Canadian Chamber of Commerce’s Net-zero Council, which brings
together more than 20 businesses that have committed to decarbonize their operations by
2050 or sooner, business leaders from across all sectors of Canadian industry are voicing
their biggest concern: Canada’s progress to net-zero may falter unless we recognize and
work with different perspectives and regional priorities.

As co-chairs of the Chamber’s Net Zero Council, GE Canada and PwC Canada recognize that
recent environmental achievements would not have been possible without government
leadership and assistance. The success of Canada’s 2050 net-zero goal depends on a strong
government commitment and having a clear, detailed plan to meet our targets in Canada’s
2030 emissions-reduction strategy, which Environment and Climate Change Canada will
release later this month.

We must learn from past challenges and our lack of success (Canada has yet to meet any of
its climate commitments) to achieve net-zero. Our country needs a practical, principled, yet
flexible approach to emissions reductions that recognizes domestic and global
opportunities for climate leadership. And the private sector must also do its part.

As we move ahead, the “how” matters so much more than the “why.” Waiting for a uniform
consensus among industries, regions and researchers is the largest risk to Canada’s net-zero
goal and economic opportunities related to energy transitions.

Decarbonization will look very different to Canadians depending on where they live – we
should neither expect nor require that any two provinces reach net-zero in the same way.
Each province’s strategy will be determined by its existing infrastructure, natural-resources
availability and policy and regulatory environment.

The federal government can lead by executing a clear plan that speeds the deployment of
all forms of emissions-reducing and non-emitting technologies, including hydrogen, new nuclear infrastructure and existing nuclear optimization, direct air capture, energy storage, renewables, carbon capture and storage, and smart grids.

This broad-spectrum approach is not spreading ourselves too thin. On the contrary, it is the
more ambitious path. Investment and scale will position Canada to succeed on a wide range
of decarbonization pathways.

To support Canada’s path to net-zero, we believe that the federal government needs four
key principles in its 2030 emissions-reduction plan.

First, Canada’s climate and economic plans must be tightly coupled. Environmental
stewardship and standard of living are not an “either/or” dichotomy. Emissions-intensive
industries help produce Canada’s high standard of living. That is why our 2030 plan must
include clear incentives to facilitate major investments in clean technologies, as well as
helping sectors requiring transformation in a way that reflects our regional realities.

Second, Canada’s climate plan must consider net-zero in a global context. We can be
a global leader in sustainable finance and in producing and exporting sustainably produced
low-emission energy, carbon dioxide-removal technologies, clean fuels, critical minerals
and finished goods. These products can displace the carbon-intensive (and politically or
socially less savoury) alternatives currently dominating international markets across
sectors and increasingly threatening global energy security.

Canada should maximize domestic and global emission reductions as quickly as possible by
innovating and exporting workable solutions. To achieve this goal, leveraging the economic
competitiveness of our private sector will be essential.

Third, private sector investment will not occur without pragmatic, predictable
policies. We need major investments in carbon-capture technologies, hydrogen
infrastructure, energy storage, renewable and low-emission energy production (including
nuclear), resiliency, supply chains and efficiencies in company operations designed to
reduce carbon-intensity and total emissions.

These investments all hinge on favourable business conditions being brought about by
environmental policies and programs. Canada must maintain its federal carbon tax, deploy
and sustain investment and production tax credits and continue to roll out fiscal measures
such as the Net Zero Accelerator initiative that encourage significant capital investment.

Fourth, Canada needs an orderly transition to net-zero. To maintain public support for
decarbonization and avoid risks like material spikes in energy costs and worker dislocation
because we haven’t done enough to help workers transition to new jobs amid sectoral
shifts, we need a clear plan. Insufficient planning will delay emissions reductions and make
transition more difficult as we near 2050.

The business community can contribute to Canada’s net-zero future by doing what it does
best – innovating and delivering results. Including these four principles in Canada’s 2030
emissions reduction strategy will help us get the job done.