Jan De Silva is the president and CEO of the Toronto Region Board of Trade
Canadian policymakers today face a litany of challenges unlike any encountered in the last decade: Putin’s war in Ukraine, record inflationary pressures, a looming global recession and the battle to get ahead of the ongoing climate crisis.
It’s this latter crisis that will have disproportionate, long-term impacts on Canada’s economy. The good news is that the climate crisis is not merely a massive challenge we must solve; it’s also a multi-trillion-dollar economic opportunity for our region, its businesses and workforce.
Consider these two facts alone: the global cleantech market is projected to exceed US$3.3 trillion in 2022, accounting for 2% of global GDP. On a global scale, bold climate action could deliver more than US$26 trillion in economic benefits in the lead-up to 2030.
Canada has a head start in the race to lead the emerging climate economy, with world-leading innovators and a booming tech sector. Earlier this year, research firm Startup Genome recognized the Toronto-Waterloo corridor, Vancouver and Calgary as the country’s best cleantech start-up ecosystems. In fact, clean technology products represented 3.3% of Canada’s total GDP in 2020, accounting for almost 323,000 jobs. Notably, 13 Canadian companies made the prestigious 2022 Global Cleantech 100 list: no small feat for an economy of our size.
Now is the time for Canadian governments at every level – and from every political stripe – to capitalize on this economic opportunity. By adapting and implementing climate strategies today and homegrown technologies, we can reach our climate targets by 2040 and lay the underpinnings for a stronger, more internationally competitive economy as we emerge from today’s period of acute economic uncertainty.
The Board of Trade’s in-depth conversations with our members have shown us that businesses are ready to invest in reducing their emissions but require a stable and competitive policy environment to do so.
Clean technology investments often have high upfront capital costs and long payback periods. Governments at all levels should introduce a more comprehensive set of incentives to de-risk business investments in clean technology solutions.
Federal cleantech investment tax credits should be stackable, transferable and applicable to a wide range of cleantech investments. Provinces such as Ontario should also provide targeted support of electricity rate guarantees to secure investment in large electrification projects – such as the current proposal to introduce a more affordable interruptible electricity rate for hydrogen production.
For smaller and medium-sized manufacturers in particular, these investments in decarbonization, while highly desirable, are less commercially attractive, particularly in today’s high interest rate environment.
American climate economy
Recent developments in the United States have changed the global landscape for climate action; we risk losing investments and jobs to our southern neighbour without a robust policy response.
In August, U.S. President Joe Biden signed the Inflation Reduction Act into law. The legislation will result in dramatic investments to meet U.S. climate change goals through a mix of tax incentives, grants and loan guarantees aimed at boosting clean energy and transportation.
The legislation contains some of the most robust clean energy tax credit programs in North American history – a fact that is not lost on Canadian businesses looking south for expansion.
When she delivered the federal government’s fall economic statement in early November, Deputy Prime Minister Chrystia Freeland called for a “green industrial transformation comparable in scale only to the Industrial Revolution itself.”
The mini-budget provided more details on several key measures to boost Canada’s competitiveness in these sectors, including business tax credits for clean technology and hydrogen investments and the creation of a $15-billion Canada Growth Fund targeted at domestic businesses that invest in the net-zero economy.
These new initiatives are a start, but more is needed.
The federal budget this spring will need to include measures to materially support key climate economy and advanced manufacturing investments to stem the southward flow of capital because of the Inflation Reduction Act. The budget should enhance tax credits for carbon capture and storage technologies to be more competitive with the new Inflation Reduction Act provisions.
With reputable cleantech innovators, willing businesses and ambitious climate goals, the Toronto region has what it takes to be a North American leader in the climate economy. Toronto-based clean technology developers, such as e-Zinc, ecobee and Li-Cycle, have already proven their capacity for practical, real-world, results-driven innovation. And many organizations such as ArcelorMittal Dofasco, the University of Toronto and Toronto Pearson Airport have already taken impressive steps to green their operations.
Globally, the climate economy has the hallmarks of a new goldrush: the next frontier. With the U.S. now making unprecedented investments in the climate economy, Canadian policymakers, in partnership with the business community, must leverage the “climate economy” narrative to avoid being left behind. Now is the time to seize the opportunity for our country’s growth and competitiveness over the coming decade and beyond.
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
