Institutional investors will be paying close attention to the federal government’s upcoming Climate Competitiveness Strategy announcement.
Canada can either become a place that attracts, grows and retains innovative businesses looking for a place to set up shop, or it can become a global afterthought.
And Canada can either draw in the global capital investments that support those businesses and grow our economy, or it can lose the race for investor dollars.
With our abundant resources, skilled workforce, and capacity for innovation, Canadians have what it takes to lead. But the road ahead requires us to rethink how we attract and retain investment in the industries of the future. The choices we make now will determine whether Canada flounders in this global future or helps shape it.
SHARE has a 25-year history of working with institutional investors in Canada and around the world. What we know from experience is this: major global investors, as well as our homegrown pension investors, want access to low carbon opportunities, climate-resilient industries, and transition-ready companies.
It’s not enough to tell investors they should invest in Canada. If we want investors to contribute to our country’s growth, we have to create a stable, open environment that inspires them to invest, give them the information they need to be confident in the resilience of our projects, infrastructure and businesses in the face of climate change, and make clear that we take the transition to a net zero future seriously.
Any serious plan for climate competitiveness will require action on several fronts:
- First, guarantee a stable, predictable investment environment. Businesses and investors need to know that regulatory, tax, and incentive policies won’t swing wildly from one government to the next. Consistency builds confidence. Tools like carbon contracts for difference (CCFD) can stabilize investor expectations and keep Canada at the forefront of the clean economy.
- Second, ensure fair competition between leaders and laggards. That means supporting and improving Canada’s industrial carbon pricing system. It’s one of our fundamental tools for climate competitiveness. It rewards innovators by providing consistent and clear financial incentives for improvement.
We can make it better, but we can’t abandon it.
- Third, guarantee access to clean, competitively-priced energy. The availability of clean, affordable electricity is now a decisive factor in business location decisions. Our trading partners are demanding low-carbon products. We could be supplying those markets, attracting and growing projects and companies that require clean energy to make their products and services. But our cross-Canada electrical grid is subject to messy and unnecessary interprovincial trade barriers and poor coordination. To deliver, the federal government must convene provincial leaders to build a cross-Canada grid that delivers clean power across provincial borders, and establish Input Tax Credits that encourage both clean energy production and expanded grid infrastructure.
- Fourth, establish climate risk-related disclosures and investment options. Both domestic and international investors have consistently asked for transparent, standardized data on climate risks. Mandating this data through federal corporate law and provincial securities regulation will close information gaps and help investors accurately assess the risk and value of Canadian firms.
The truth is, the less investors know, the less they’re going to invest.
- Fifth, we can only ramp up our critical minerals industry working with Indigenous peoples, not around them. Lengthy approval timelines and legal uncertainty deter investment—especially in critical minerals and transition industries. SHARE applauds the federal government for the establishment of the Major Projects Office and looks forward to the streamlining of federal regulatory project approvals. But we’re kidding ourselves if we think sidestepping or undermining constitutionally-protected Indigenous rights will speed things up. It won’t and it shouldn’t. The Crown should lead in obtaining free, prior and informed consent so industry and investors have confidence that everyone’s rights are respected and projects can truly move ahead.
- Sixth, invest in workers and decent work. A new economy needs skilled workers, and good workplaces. A high road approach to decent work, job growth and skills development is a competitive – and investible – advantage. Let our neighbours to the south take the low road on labour. We can do better, by being better.
The Path Forward
Canada’s advantage is clear. With stable policies, clean power, skilled people, and world-class standards, we can unlock a wave of business investment and capital inflows that power our transition to a clean, inclusive, and prosperous future.
Let’s invest in Canada’s future.
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The views and opinions expressed in this article are those of SHARE and do not necessarily reflect the official policy or position of The Hill Times.
