This section is fully supported by Gowling WLG (Canada) LLP
Committed to transitioning to a net-zero emission economy, the Canadian government is working with businesses and stakeholders across the globe to bring clean technology to market. According to Invest in Canada, Canada is an optimal location for such development due to its “low [Research and Development] costs, highly skilled workforce, wealth of natural resources, and support for innovation.”
Canada is a burgeoning hub for green technology transformation in the transportation, infrastructure, and construction sectors. The country seeks to become a leading economy in the development of renewable energies, carbon capture technologies, electrification of vehicles, and innovative fuel sources. Programs like the $8 billion Strategic Innovation Fund – Net Zero Accelerator and the $10 billion Canada Infrastructure Bank (CIB) Growth Plan are supporting projects that aim to decarbonize heavy industry, support clean technologies and help meaningfully accelerate domestic greenhouse gas emissions reductions by 2030.
Recently, the Government of Canada announced a series of investments and regulations to help businesses and industries transition to 100 percent zero-emission vehicle sales by 2035. For example, the Government has invested over $1 billion to support the development of fast chargers for electric vehicles, natural gas stations along key freight corridors, and hydrogen stations in metropolitan centres across the country. New measures were also introduced to support automotive manufacturers, including a corporate tax cut of 50 percent.
Significant investments have also reached the infrastructure and construction sectors in order to achieve net-zero emission targets by 2050. These funds support sustainable power generation, energy-efficient building retrofits, and sustainable broadband infrastructure. In addition, as the International Institute for Sustainable Development reports, a share of this investment is earmarked for accelerating infrastructure planning and implementation, such as by providing important feasibility studies and technical guidance.
Canada is committed to harnessing the benefits of energy efficiency across all sectors. In addition to dedicated funding for efficiency projects, Canada recently joined the “3% Club”, a collective of countries, companies, and institutions committed to achieving three percent increases in energy efficiency every year. Such increases are significant given that the International Energy Agency reports efficiency policies could deliver over 40 percent of the emission reductions needed to achieve the goals of the Paris Agreement.
Previewing the federal government’s acceleration of its plan to decarbonize the Canadian economy, the Fall Economic and Fiscal Update 2021 featured a series of announcements in support of climate initiatives including a commitment to return the proceeds from the Direct Fuel Charge to provinces and small and medium-sized businesses, the finalization of Canada’s National Adaptation Strategy by the end of 2022 and the publishing of a Green Bond framework in the final quarter of FY 2021-22.
Regulatory Landscape
It is important for inbound investors and businesses to navigate the nuances and complexities of Canada’s regulatory landscape. Multiple levels of government – including federal, provincial, territorial, and municipal – enact and regulate environmental laws across the country. Assistance understanding these overlapping legal and regulatory requirements makes successful realization of business opportunities much more achievable.
Environmental laws cover a number of areas including climate change, emissions management, energy, waste management, water treatment, species at risk, waste, contaminated land, toxic substances, fisheries, Corporate Social Responsibility as well as related risk management, planning and environmental impact assessment. If compliance with such laws is not carefully considered and managed, opportunities might be missed and businesses could be subject to financial and reputational damage. Environmental, Social and Governance (ESG) risks are increasingly becoming a focus for shareholders, with investment decisions built on data and planning that considers long-term risk assessments and strategies.