Profits from ICE vehicles will help fund the company’s broader EV ambitions. Eventually, the Oshawa plant, along with the rest of GM’s footprint in Canada, will convert to EV production, he says. GM’s global chief executive officer, Mary Barra, has said 40 per cent of U.S.-produced models will be battery-powered by the end of 2025.
But manufacturing electric vehicles in Canada is just one step on the road toward zero emissions. Electric motors — whether powered by hydrogen fuel-cells or electric batteries — require new infrastructure, metals and materials, technology, and clean power to be truly green.
The good news is that this creates potential for a raft of new jobs just as Canada faces growing international pressure to abandon oil sands production. From October 2014 to October 2020, the oil and gas extraction sector shrank by almost 15 per cent, or about 9,000 jobs. One of U.S. President Joe Biden’s first steps in office — the cancelation of the Keystone XL oil pipeline project — led TC Energy Corp. to immediately slash 1,000 jobs on both sides of the border.
“The thing about transportation, in the context of Canada, is that this isn't just an emissions reduction plan; it’s also an economic plan,” said Sarah Petrevan, policy director at Clean Energy Canada.
The federal government has said there could be $70 billion to $100 billion in additional stimulus spending over the next three years. Petrevan says dedicating a hefty chunk of that to clean up the transportation sector would be money well-spent.
With his December announcement of an aggressive hike to the country’s carbon tax, Prime Minister Justin Trudeau has promised that Canada will meet or exceed its goal to cut emissions by 30 per cent from 2005 to 2030. The widely hailed measure could help redeem Canada’s sooty reputation abroad. What’s less clear is how much it will spill over to transport, or how much future spending might be aimed at cleaning up the sector.
Smaller targeted measures such as continuing to offer rebates to consumers who buy zero-emissions vehicles, and putting up $150 million to build charging and refuelling stations, are helpful but not transformative, Petrevan said. What’s needed are funding and policies to support the entire value chain, from batteries to car assembly.
As the pandemic unleashes a flood of stimulus spending, the potential to restructure economies around zero-emissions goals has grown. To date, more than two dozen countries have directed nearly a trillion dollars in stimulus toward a green recovery, according to Bloomberg New Energy Finance’s Covid-19 Green Policy Tracker. EU leaders have pledged at least $900 billion to green sectors. Germany, France and South Korea have used stimulus funds to launch ambitious climate programs that will reshape their economies for generations.
By comparison, the largest part of Canada’s $15 billion green stimulus plan announced in December is focused on energy-efficiency measures BNEF believes are unlikely to have substantive impact on emissions — though they will likely create jobs.
‘HARMONIZED NORTH AMERICAN STANDARD’
Meanwhile, Biden is hoping to push some version of a sweeping new green energy stimulus plan through Congress, to transition the United States to net-zero carbon emissions by 2050. In the weeks after the November election, speculation that Canada could work with the U.S. on cross-border solutions to speed adoption of zero-emissions vehicles picked up. The expectation is that Biden will push for a host of measures, including stronger fuel-efficiency requirements and a higher social cost for carbon, and pressure Trudeau to follow suit.
“We now have a president who is much more aligned with not only my own values as prime minister but also the values of Canadians,” Trudeau said at a news conference Jan. 22 following Biden’s decision to cancel the Keystone XL pipeline.
Dean Stonely, CEO of Ford Canada, said the most helpful transportation policy Canada’s Liberal government could produce would be a “harmonized standard for all of North America.”
Government support, such as the almost $600 million offered to Ford in Ontario, and more consistent policies among Canadian government agencies will also be crucial, he said. Uneven subsidies have made EVs more affordable in some provinces than others, leading to inventory disparities. This will even out as the technology continues to develop.
A recent report from Bloomberg NEF notes that falling battery prices will push EV and ICE vehicles to price parity by the mid 2020s, eliminating the need for subsidies.
‘HAVE TO SPEND’
Trudeau’s most substantive environmental policy, hiking the national carbon tax, aims to foster green innovation across sectors by driving up the cost of carbon emissions for business.
“For the first time, Canada has a credible plan to meet its 2030 climate commitments,” said Richard Florizone, CEO of the International Institute for Sustainable Development, a Winnipeg-based think tank.
What the country has yet to see, he said, is the kind of “activist industrial policy” that has gained favour among many governments during the pandemic.
Having pledged a comparatively modest $15 billion, to date, for green investments in its recent environment plan, Finance Minister Chrystia Freeland has hinted that the government could spend a further $70 billion to $100 billion on pandemic stimulus.
“We’re going to have to spend,” said Florizone. “Why don’t we spend in ways that will lay down the track for the economy of the future?”