Speech for the Honourable Steven Guilbeault, Minister of Environment and Climate Change, at GLOBExCHANGE 2023
Thank you for that introduction, and good afternoon, everyone.
It is my pleasure to join you here on this second day of Globe.
I want to begin by acknowledging that we are gathered on the traditional territory of the Huron-Wendat, the Anishnaabeg, Haudenosaunee, and most specifically, the traditional and Treaty territory of the Mississaugas of the Credit First Nation.
We now call this place Toronto, and it is a perfect location for this conference and for the theme of the remarks I want to give today: climate change means business. Because Toronto is Canada’s finance engine.
I am here to make the case—echoed by many financial leaders in this room—that we are on the cusp of an economic boom driven by environmental necessity and the myriad of opportunities that will come in this century from the clean energy and net-zero innovation.
The Government of Canada is laying the groundwork, in collaboration with businesses across the country, to achieve a more prosperous and more sustainable Canada.
Did you see that last week, the Toronto Stock Exchange released their list of top performers for 2022?
Investors are voting with their wallets, choosing companies in the vanguard of clean energy...
Critical minerals, battery technologies, hydrogen, and solar power—these are the high performers.
Environmental action on climate change has become the driving force for economic opportunity in the 21st century.
And the power of that environmental tide is clear, even amid all the other global currents today.
It’s been one year since Russia began their illegal invasion of Ukraine, sparking a European energy crisis and global price spikes.
In the short term, yes, our allies in Europe need fossil fuels to get through the winter.
But in the longer term, the war is resulting in a redoubling of clean-power investment and innovation.
The International Energy Agency has clearly spelled this out: the war in Ukraine is accelerating the push for clean energy.
Canada—a reliable, responsible energy exporter—is supporting our European allies in every way we can.
I am particularly excited by the potential for our critical minerals and clean energy.
The German Chancellor came to Canada and, with the Prime Minister, announced a green hydrogen project powered by offshore wind in Newfoundland.
That’s the environmental tide powering investment.
But there are other currents as well.
The United States.
Last year, the US Congress passed the biggest legislative package on climate action ever seen anywhere in the world.
A $369 billion deal.
The Inflation Reduction Act removes any doubt that we can stick with the status quo.
It has made the rush for innovation in clean tech more competitive than ever.
Make no mistake, this is a competitive race.
And Canada has a lot of advantages: People. Resources. Know-how. Energy wealth.
The government of Canada has earmarked $120 billion for climate action, so we’re already rolling, but we know we must continue momentum.
Many of you already know my back story.
I’ve been attending international climate conferences for almost 30 years now.
They used to be gatherings of activists, government types, and scientists.
Today, people complain that these international climate conferences are overrun with bankers and investors.
I say this is a very good thing!
The finance sector’s involvement shows that climate interests are being mainstreamed in capital markets, and climate action also means investor opportunity.
Yesterday, I co-hosted a roundtable discussion along with Kathy Bardswick, Chair of the Sustainable Finance Action Council.
We had several leaders and CEOs from the financial sector—banks, underwriters, institutional investors. The message I heard was clear.
“We want to do more, but give us clear regulatory signals and enabling investment environments.”
Well, let me tell you all that our Government will work with you to provide predictable market signals and an attractive investment environment. The Government will carefully lay out investments to arrive at the ultimate destination of a clean and prosperous Canada.
Last year at the Globe conference, in Vancouver, the government launched the most comprehensive and detailed emissions reductions plan in Canada’s history.
Sector-by-sector, we showed the cost-effective pathways we need to take to reach our goal of a forty to forty-five percent reduction of emissions by 2030, on to net zero by 2050.
Even with all the new emerging challenges we have faced in the past year, we’ve also come a long way.
After two straight years of emission reductions in this country, we are continuing to bend the curve on emissions—even in the context of a post-pandemic economic rebound.
And we are cutting pollution while laying more track for economic opportunity.
The government needs to engage in the biggest environmental crisis and market opportunity of our lifetime.
The Government’s job is to create incentives and regulations that give the markets clear, long-term signals to reduce emissions and do it in a flexible, cost-effective manner.
The Government’s job is to provide the tools and guardrails—the enabling conditions—to assess the risks and benefits of climate change for your long-term planning and investment decisions.
The Government’s job is to listen to the private sector on what the best market signals are to mobilize private capital toward meeting our climate change objectives.
This last point is, in fact, the very basis for our price on carbon pollution.
Let me give you an example.
At COP27 in Egypt last fall, the CEO of one of Canada’s largest power-generating companies told me something interesting.
He said, and I quote:
“Without a longer term view—a sustainable view of reasonable pricing with reasonable stability—a lot of really good projects wouldn’t happen in Canada.”
In fact, he told me that a $2 billion carbon capture investment he has in development was dependent on carbon pricing to go ahead.
And what I heard again yesterday in my roundtable discussion is that the financial sector and private sector are keen to seize investment opportunities in climate action.
Take a look around at what’s happening across Canada.
Imperial Oil just announced it is investing $720 million to build Canada's largest renewable diesel facility near Edmonton.
It will use low-carbon hydrogen supplied by Air Products, a company our Government supported through our Net Zero Accelerator initiative.
Or, take a look at the zero-emission trucks that began rolling off GM’s assembly line in Ingersoll, Ontario, in December.
Or the massive new battery plant under construction in Windsor, Ontario.
Or the James Bay lithium mine we just approved in northern Quebec.
These are but a few examples.
The economic frontier is in clean energy and technologies and critical minerals.
All of this reinforces the central message I hear at Globe: Climate change means business.
Another economic frontier: a smarter, cleaner electricity grid.
Businesses frequently tell me that access to a source of clean electricity plays a deciding factor on where to locate their operations.
The good news is Canada already has one of the cleanest electricity grids in the world.
Almost 85 per percent of the electricity that Canadians use comes from non-emitting sources, like hydro.
In the last forty years, Canada’s total electricity capacity has doubled, while in the last twenty years the emissions from the sector have been cut in half.
And we are well-positioned to keep leading.
Jonathan Wilkinson, Minister of Natural Resources of Canada, frequently compares building a national clean electricity grid to the building of the national railway!
So how does the Government support market forces to achieve this vision?
Last year, we launched the Smart Renewables and Electrification Pathways program.
This provides over $1.5 billion for large-scale renewable energy projects capable of providing grid services, energy storage, or grid-modernization projects.
The Government of Canada is working on Clean Electricity Regulations that will be the basis of reaching a net-zero grid by 2035.
And the Net Zero Accelerator, among other federal programs and tax credits, gives industries the incentive to switch from carbon fuels to clean electricity.
But I want to come back to that big US climate package. It’s no mistake that they call it the Inflation Reduction Act.
Like them, Canada understands that climate action must not only create new economic opportunities, it must also support households facing an inflated cost of living.
Take a look at the growing market for heat pumps and home retrofits.
Government of Canada investments are helping households facing energy poverty, and helping consumers who are anxious to get off the roller-coaster of global fossil fuel price spikes.
Environmental action is the unifying thread from that household in rural Nova Scotia, to the boardroom of a Bay Street office tower, to a renewable diesel facility in Edmonton.
The Government continues to lay out positive developments helping to mobilize private finance toward cleaner investments.
Earlier today, Treasury Board President Mona Fortier and I announced that as of April 1st, all federal government contracts of $25 million and up will need to disclose their greenhouse gases and set reduction targets.
Businesses can do this by joining the Net-Zero Challenge that we launched last year. It’s already up to over 40 companies, like Microsoft, Aecon Group, 3M Canada, and Cogeco.
The Net-Zero Challenge is giving businesses—big and small—the tools and guidance to report their own leadership on cutting emissions, and the recognition.
Last March, investors eagerly snapped up the first Government of Canada issuance of green bonds, with the final order book of over $11 billion setting a record high for a Canadian dollar green bond offering. We expect another issuance soon.
And last Friday, the Government announced a new Greenhouse Gas Offset Credit System to provide a market-based incentive for Canadians to upgrade large-scale refrigeration and air conditioning systems.
One view on the role of government—an outdated view that is not suited for 21st century environmental ambition—is that we are here to restrict, limit, and impose.
I argue that the opposite is true. The role of government is to enable, expand, and catalyze private sector ambition and innovation.
I don’t know, but this might not be the speech you expected to hear from me.
When I started my work in the environment field, far too few people—whether in government or in business—were taking the threat of climate change seriously enough. The reality of our changing climate and its impacts is now undeniable.
No less than the Office of the Superintendent of Financial Institutions and the Bank of Canada have contributed to our understanding of the risks of climate change. Through the ground-breaking scenario analysis they completed last year, we now have a better understanding of the risks climate change poses to the financial system.
This work from the Office of the Superintendent of Financial Institutions and the Bank of Canada concluded, and I quote: “Delaying climate policy action increases the overall economic impacts and risks to financial stability.” The evidence has never been stronger—the need to act is now.
When I look at my kids, I sometimes worry that the cascade of bad news, dire forecasts, and extreme weather events can make people shrug and give up, or turn away.
That’s why I stress the massive opportunity that clean energy presents.
Every region of the country has a role to play, every sector.
And let’s not be glib about the magnitude of the challenge as well. Canada is a large oil- and gas-producing nation.
But oil and gas companies themselves have committed to reaching net zero.
The oil and gas emissions cap currently in development creates a level playing field to enable the re-investments needed to reach that goal.
This is about the future of our workers, too.
Labour success underpins commercial success.
And Canada again has a head start with a highly-skilled workforce.
Canada can do this. Investing in a clean economy opens the doors to an unprecedented degree of opportunity, and it will also command an unprecedented commitment to innovation.
As a government, we must think very carefully and send clear signals to help shape long-term market decisions.
This is true for large household decisions, like car purchases and heating systems.
It is particularly important for major capital projects, which can lock in capital for decades.
The race is on. Canada has all the required components to run it well and win, but run it we must.
And so, I’ll say it again. Climate change means business. And so do we.
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