TORONTO — Rachel Doran, executive director of Clean Energy Canada, made the following statement in response to the federal government’s second tranche of nation-building projects:
“The clean economy is growing globally, and Canada needs to be ready to power, produce, and export goods with the greatest value to our future prosperity. That means we must also focus our limited time and resources on industries and projects that are poised to compete in an increasingly electrified world.
“At a high level, it’s worth acknowledging that the federal government is taking this new global reality to heart, as was expressed clearly by the prime minister today. Out of 11 national interest projects announced to date, eight can be categorized as clean economy projects, with five in critical minerals and three in clean energy and transmission. Only two are in fossil fuels.
“Globally, more people worked in the energy sector in 2023 than in 2019, almost exclusively due to growth in clean energy. Clean energy employment surpassed that of fossil fuels in 2021, and this can be seen in the choices of Canada’s 10 largest non-U.S. trade partners, all of whom have net-zero commitments and carbon pricing systems, while roughly half apply carbon border adjustments on imports and have domestic EV requirements reshaping car markets.
“Which is why the support for new liquified natural gas production and facilities also announced today could backfire. Earlier this week, the International Energy Agency noted in its latest energy outlook that while demand for LNG is anticipated to grow between now and 2030, supply is outpacing this demand, with an expected wave in natural gas supply likely to lower international prices.
“The IEA predicts that by 2030, the global LNG market will already face an annual overcapacity of 65 billion cubic metres, based on projects already built or under construction, which, for comparison, is about three times the size of LNG Canada’s Phase 1 facility’s annual production.
“As a result, any new projects will likely enter a market with dropping demand and falling prices, with operators unable to recover their costs. If designation as a major project is accompanied by investment dollars, it could be Canadian taxpayers left on the hook, subsidizing unprofitable industries and dealing with the aftermath of stranded assets, lost jobs, and unrealized Crown revenues.
“This can be compared to other sectors better poised for growth in an increasingly electrified world. Demand for the critical minerals that feed into clean technologies—lithium, graphite, nickel, and cobalt—will grow two to five times by 2040. Promisingly, Canada is the top choice globally for spending on critical mineral exploration, accounting for 19% of global expenditure, and is the second-ranked country for battery supply chain potential, thanks to our mineral resources and manufacturing hubs in Quebec and Ontario.
“Meanwhile, clean electricity and transmission—including new interprovincial connections—play a vital role as the lifeblood of Canada’s clean economy, providing affordable clean power to projects that are increasingly turning to electrification to stay competitive. Low-carbon manufacturing, powered by a strong, clean grid, will be a Canadian competitive advantage for both our exports and attracting global companies looking to expand their North American footprint.
“Ultimately, while the federal government is taking important actions to invest in Canada’s clean economy that will pay dividends for years to come, it is also exposing Canada to more risk by chasing an uncertain LNG market. Those resources could instead be used to further double down on building Canada into a clean energy superpower, seizing opportunities for which we know demand will be strong and growing.”