By Mitchell Beer

This Weekender mostly combines material we published in late February and early April, but the context is a bit more urgent…again.

Monday is Election Day in Canada, and with less than 100 hours to go before polls open, Donald Trump reinserted himself into the campaign, telling TIME Magazine he’s “really not trolling” with his mutterings about turning us into a 51st state.

In an interview published Friday, Trump brought the focus back to the annexation threat that The Weekender and many others have been warning about for months. He repeated his false claims that the U.S. is subsidizing Canada, declaring that “the only way this thing really works is for Canada to become a state.”

“It now seems increasingly obvious that Trump’s expansionist aspirations are no fleeting fancy,” CBC writes. “He kept quiet for a while, leading some to wonder whether he’d gotten it out of his system.” But “in recent days, the president has been blunt in different encounters with media that he seriously would love to see Canada become a state.”

Trump’s apparent seriousness about annexation leads to two questions, the answers to which may well be shaped by the election results Monday night:

• What are the prospects for Canada to form new trading relationships with other regions and countries that are facing Trump’s malignant wrath, to diversify our economies and stand together against a common threat?

• How can climate and energy strategy become part of the glue that holds this new alliance together, and what policies and real-world actions will Canada need to join in?

The World Pushes Back

The astonishing thing over the last few weeks was not that Donald Trump went ahead with his threat to blow up the global trading system by imposing tariffs on about 60 countries, including two economically mischievous islands populated only by penguins.

It was that the rest of the world was so fast to push back, ready and determined to move on from an era of U.S. economic dominance. That a promising approach to building a new trading bloc that bypasses the rogue regime in the White House went from online conversation to serious proposition in scarcely a week.

That if you surveyed the scene from just the right angle, a new, emerging bloc might be able to cover more ground and tackle multiple problems at once by pivoting to low-carbon goods and real decarbonization technologies.

And that Canada might yet place itself at the centre of the world’s next great, low-carbon trading alliance, as long as our incoming federal government has the insight and inclination to play along. (Which is a longabouts way of saying…your vote matters.)

In the 100 or so hours after Trump’s self-styled “Liberation Day” announcement earlier this month, we saw a fast flurry of analyses on the slapdash, amateur-hour process behind the decision, the immediate impact on jobs, a shock reaction from global stock markets that has continued through the month, and the apparent certainty that this spells the end of global trade as we’ve known it.

But there are more interesting, even hopeful and positive questions to ask, beginning with:

If every end is also a beginning, what’s next?

If the tariffs are really dealing a death blow to the established international trading system, what if this undercuts the fossil fuel industry as badly as Trump’s direct hostility and interference have devastated the U.S. renewable energy sector and climate justice community?

For Canada, now that we’ve declared that there’s no way back to an era when our economy was over-dependent on our neighbour to the south, what else do we gain by getting closer to countries that are farther along on their climate and decarbonization journey?

And how can we work with our future trading partners to accelerate the shift?

Sleeping Beside an Elephant

The roiling, ranting, manufactured crisis that Donald Trump has brought to our doorstep has communities, countries, and whole continents scrambling for solutions. So we might as well admit and embrace the reality staring right at us—Trump has created a moment when the sense of what’s “realistic” gets tossed in the air, when unexpected lines of thought suddenly make a whole lot more sense.

For Canada, that response begins with a level of unity and shared purpose that we haven’t seen in many decades—prompting former prime minister Jean Chrétien to slyly declare that he would have nominated Trump for an Order of Canada if only the honour were available to convicted criminals.

It extends into some serious, long-overdue conversations about how to make our economy truly independent. We’ve always known we were sleeping beside an elephant, as Prime Minister Pierre Trudeau told the Washington Press Club in 1969.

But there’s been little serious talk about dialling up our economic relationships in other parts of the world sufficiently to dial back our dependence on the U.S. Until now.

It began with a post by Social Capital Partners Chair Jon Shell, suggesting a new trading bloc with the economic clout to survive, thrive, and leave the United States behind.

“We know what Donald Trump is afraid of,” he wrote on LinkedIn. “Now let’s organize around it.”

The EU, UK, Canada, Japan, South Korea, and Australia (I’m now calling them “EU + 5”) collectively have 760 million people and control 34% of the global economy and vast quantities of natural resources. We are an obvious threat to the U.S. and to China if we were to organize.

The best way to beat a bully is for the rest of the group to rise up against him.

The rest of Shell’s scenario is that much more plausible in the year when Canada holds the rotating chair of the Group of 7 forum of industrialized nations, and will be hosting the G7 leaders’ summit in June.

The most powerful signal to give Trump would be for this group to meet in a very public way, ideally in Canada, so the meeting would play out on American TV in the right time zones. The stats on the economic and resource might of this new group would scroll across the bottom of Fox News. [If we can assume that Fox would even carry the story—Ed.]

A joint statement at the end pledging to work together as friends and allies to ensure a resilient and prosperous future for our populations would be a powerful message. Quick wins could be action on Ukraine and munitions manufacturing.

First and last, it needs to be 100% clear—and for Trump, spelled out with a Sharpie in simple, single-syllable words with lots of golf analogies—that no one is taking this lying down.

“My strong recommendation to Canada, Mexico, Japan, the United Kingdom, and the European Union is to join together to create a free trade zone that excludes the United States, imposing at least a 10% tariff on all imports from America,” writes Bill Clinton-era U.S. labour secretary Robert Reich. “Don’t negotiate. Do this now so you’ll be negotiating from a position of power.”

G7? Meet the ‘Free 7’ (By Comparison)

As Reich’s formula suggests, a useful add-on to Shell’s thinking would be to build on Canada’s relationship with its more reliable trading partner in North America by including Mexico in an EU + 6.

And by declaring an emphasis on clean energy and decarbonization trade, the countries could jump-start their economies after Trump’s tariff attack, boost affordability and local self-reliance across the entire bloc, support Ukraine’s reconstruction, and prevent military conflict in the first place—and oh, by the way, move closer to meeting their climate targets.

The focus on climate and carbon would be consistent with the accelerated priorities the European Union has been setting since 2022, when Vladimir Putin’s invasion of Ukraine turned energy efficiency and renewables into a geopolitical security strategy for countries that were too dependent on Russian gas.

And this general line of thought has been gaining traction. Within a week, the idea of a wider trading bloc had broken out from social media and Substack newsletters to general media in a Toronto Star post by John Austin, a nonresident senior fellow at the Washington, DC-based Brookings Institution. His formulation brought together the EU, Japan, the UK, Canada, Mexico, South Korea, and Thailand in a group of nations that “would dwarf the U.S., as well as the economies of China combined with its ally Russia.”

Given America’s new stance, now is the time for the G7 member nations to disinvite the U.S. from the group, and morph to a new organization: a “Free 7.” It would be a new forum in which the nations that still believe in democracy, free markets, freedom of expression, and free trade would collaborate to strengthen their collective hand and push back against authoritarians—which now includes the U.S.

The work of the new Free 7 would be the urgent task of building an international coalition that stands up to the authoritarian axis—and successfully contains it. This means standing up to pressure from the U.S.

Take this as a thumbs-up for the basic idea, not necessarily the branding Austin attaches to it. It would take a whole other edition of The Weekender (or more) to unpack what we mean by “Free” and how well or widely it applies to the countries in the group, certainly including Canada.

But the point of contrast with full-on authoritarians like Trump still makes a lot of sense—to counter the rush to fascism that we’re seeing in the U.S. and, if it goes this way, to reignite the response to climate change and the energy transition. That general line of thought makes South Korea an interesting addition to the group after an unequivocal population pushed back against an egregious assault on the country’s democracy—unlike their U.S. counterparts, who splintered in response to Trump’s 2020 election loss and the deadly insurrection attempt that followed.

Carbon is the New Tariff

In February, The Weekender reported that the emerging, global demand for low-emissions trade isn’t just a North American phenomenon—nor even a trend that North America is leading. And that carbon controls could soon become the new tariff.

The European Union adopted the world’s first carbon border adjustment mechanism (CBAM) in 2023, and its implementation is set to begin this year. That bit of progress landed in the middle of the Liberal leadership campaign earlier this year when then-candidate Mark Carney proposed to replace the hated consumer carbon tax by introducing a CBAM regime with other like-minded countries.

That thinking leads toward a plausible and really promising future where climate impact is a key criterion guiding trading relationships, as long as the system is rigorous enough to deliver real-world results. If a country is seriously and measurably reducing emissions, it qualifies. If it isn’t, it gets politely but firmly left behind.

As far back as January, Canada’s future trading partners were already making moves in the right direction. In the first week after Trump’s inauguration, a small flurry of analysis indicated that the rest of the world was moving on—not least because countries have already seen eight years of punitive, provocative U.S. tariffs under the Joe Biden presidency as well as Trump 1.0, and they’re quite rightly fed up.

The trend was most definitely paralleled by an emerging, global shift in energy priorities. “Most major economies are investing in ever-cheaper solar and wind power,” the New York Times wrote. “Even as coal, oil, and gas still power the global economy, and more fossil fuels are burned year after year, the movement globally is toward heavy investment in solar, wind, and batteries, the prices of which have fallen sharply in recent years.”

Time to Stand for What Matters

But in international trade relations, as in the fight against climate change, standing against what we can’t and won’t accept is just half the battle. The next successful trading bloc will only fulfill John Austin’s vision of a “Free 7” if we’re very clear and deliberate about the kind of economic activity we want.

In a Toronto Star op ed, Savanna McGregor, Grand Chief of the Algonquin Anishinabeg Nation Tribal Council, said Conservative Leader Pierre Poilievre’s “Canada First” National Energy Corridor wouldn’t meet that standard.

Reading Mr. Poilievre’s announcement, I am left wondering why it does not mention Indigenous people even passingly, other than to expect fancifully that we give “approval … before any money is spent.” Surely he knows Canada’s constitution requires Indigenous consultation, accommodation, and ultimately consent to build major infrastructure inside his National Energy Corridor? How can there be consultation (to say nothing of accommodation and consent) if the corridor is “pre-approved” before anyone has the blueprints for what infrastructure will be built and where?

McGregor asks how city dwellers would respond to word of a “pre-approved” major development in their own back yard, with no indication of whether it’s a school, a shopping mall, or a radioactive waste dump.

It sounds ridiculous and contemptuous, yet this is exactly how Mr. Poilievre and many others hold Indigenous communities today (there is a radioactive waste dump on Algonquin land right now). Obviously, pushing a development decision without identifying the development would never fly in a city where the residents have no constitutional right to be consulted—so it definitely will not fly for Indigenous people having that right.

“Ironically, the pre-approved corridor Mr. Poilievre wants to speed development up would nearly paralyze it,” McGregor wrote, citing court cases that would slow down a campaign promise that she describes as a “war with Indigenous nations”.

Then there’s the question of who gains if those projects are fast-tracked. In a separate post for the Star, Toronto Metropolitan University associate professor Shari Pasternak and Emily Lowan, fossil fuel supply lead at Climate Action Network Canada (of which Energy Mix Productions is a member), connected dots to some of the main movers and shakers in Trump’s inner circle. Which means that projects like the Prince Rupert Gas Transmission (PRGT) pipeline and the Ksi Lisims LNG export terminal “are now making Canada vulnerable to Trump’s predatory goal of North American energy dominance.”

Pasternak and Lowan wrote:

The solution is not to copy Trump’s “drill, baby, drill” approach with a thin gloss of maple syrup over top; it is respect for Indigenous jurisdiction and a just transition from fossil fuels to clean energy. Canadian pride should come from ethical investment and reconciliation—not backstopping U.S. corporations.

We’ve all heard the too-easy, too-glib line that a crisis is a terrible thing to waste. And once, just once, I wish the pundits and prognosticators who keep talking that way would turn their attention to the climate crisis and the fossil fuel industries that drive it. Or the nature and biodiversity crisis. Or the food security crisis. Or the multiple, wrenching human rights crises going on around the world as we virtually speak. No need to be fussy.

But here’s the thing so many of us have been hoping for—since the U.S. election result in November, and since around 8:10 PM Eastern last June 27, as we watched then-U.S. president Joe Biden implode onstage in his debate against Trump. Faced with the worst we’ve ever seen from Trump, the #ElbowsUp mantra is extending far beyond Canada, into a global coalition so wide that it might be able to withstand this moment, recover, thrive—and thrive green.

There are no guarantees, and it’ll take a while to see how things land. But the first step in building the solution we need is to envision it. And over the last few weeks, that’s been happening.

The post Opinion: Trump is serious about annexing Canada. How will climate and energy policy bring us the allies we need? appeared first on Thoughtful Journalism About Energy's Future.

This makes the oil and gas industry the single largest source of emissions in Canada, with the oil sands sub-sector alone being responsible for 87 million tonnes, or 12 per cent of Canada’s overall emissions.

“The need to regulate oil and gas emissions is supported by clear evidence,” said Janetta McKenzie, manager of Oil and Gas with the Pembina Institute.

She adds “While other economic sectors, and everyday Canadians, have taken steps to reduce their emissions in recent years, emissions from oil and gas production have continued to grow.”

While most sector emissions have declined or remained flat since 2005, the oil and gas sector has seen the largest increase, at 11 per cent.  As the below figure shows, this increase has been driven by the oil sands – where highly carbon intensive bitumen production has increased, but has not been accompanied by substantive efforts that would reduce absolute emissions.

McKenzie says annual emissions from the oil sands have grown by over 50 million tonnes, an increase of 142 per cent, since 2005.  Pembina Institute research has also found that efforts to reduce emissions intensity in the oil sands (amount of carbon dioxide equivalent per barrel) have stagnated and begun to reverse, rising by one per cent since 2018.

Since 2005, all other oil and gas sub-sectors have made progress to reduce emissions. Some of these reductions can likely be attributed to the successful implementation of federal and provincial methane regulations, which have had a greater impact on emissions from conventional oil and gas production, given the scope for methane abatement in those sub-sectors.

“Some of those who oppose this regulation have sought to present this issue as a mutually exclusive choice between economic prosperity in Canada, and the fight against climate change,” said McKenzie. “But as our analysis has shown, companies can meet this cap through technological solutions while still growing their production. As the Government of Canada has shown today in its modelling, by 2032 there is a minimal impact to Canada’s GDP as a result of this cap.

In June 2024, the Government of Canada finalized and passed into law its Carbon Capture Utilization and Storage Investment Tax Credit (CCUS ITC), which covers 50 per cent of companies’ eligible expenses for capture equipment and 37.5 per cent of eligible expenses for transportation and storage equipment — so long as those expenses are incurred before the end of 2030.

“But all of this depends on companies, particularly in the oil sands, being willing to invest in the emissions reduction technologies that are available to them,” said McKenzie.

“While we have now witnessed several years of promises and pledges from the oil sands sector to decarbonize its operations, it is still the case that the companies are reluctant to move ahead with projects unless they can be assured of a profitable return on their investments.”

Pembina commends the Government of Canada for consulting with a wide range of stakeholders – including the oil and gas sector, and the oil sands companies – as it has sought to create a regulation that can put the oil and gas industry on a path to play a role in Canada’s low-carbon economy of the 2030s and beyond.

According to Pembina, reducing emissions from Canada’s oil and gas production means investing in innovation, skills and technologies to reduce those emissions.  This will be a source of prosperity and job creation in provinces like Alberta.

“Although the Government of Alberta and industry groups have in the last few weeks repeatedly cited third-party studies modelling the hypothetical impacts of the emissions cap on the province’s economy, Pembina Institute analysis has found that these studies hinge on the assumption that the industry chooses to take very little meaningful action to reduce emissions, and therefore has no choice but to limit production in the future when the cap actually comes into effect,” said McKenzie.

“This is misleading for Canadians. The oil and gas sector has options available to it to future-proof its operations and continue to make an important contribution to Canada’s future economy – but to do so, it must invest in long-promised corporate emissions reduction projects without delay.”

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By Mitchell Beer

The federal government is drawing cheers from transit agencies and criticism from riders after announcing a Canada Public Transit Fund that pours C$30 billion over 10 years into new vehicles and infrastructure, but is silent on the yawning operating deficits facing local transit systems.

On a visit to the Toronto Transit Commission’s Greenwood Yard maintenance facility yesterday, Prime Minister Justin Trudeau described the new fund as the “largest public transit investment in Canadian history,” meant to “expand, improve, and modernize public transit” and link transit dollars to housing development.

The program consists of three funding streams, Housing, Infrastructures and Communities Canada explained in a release:

• A series of Metro-Region Agreements, averaging $2 billion per year over 10 years, to “offer predictable funding in regions with the highest demand for public transit and active transportation funding, and where travel patterns often cross municipal boundaries”;

• $500 million per year in baseline funding to support “routine capital and non-capital investment” in transit and active transportation infrastructure;

• $500 million per year in targeted funding, to be managed through specific calls for proposals in areas like active transportation, zero-emissions transit, and rural transit.

‘Set Up to Succeed’

“By investing in public transit, we’re creating communities that are connected, affordable, and set up to succeed,” Trudeau’s office said in a statement. “Funding will begin to flow in 2026, but we are opening the intakes for Metro-Region Agreements and Baseline Funding today, so that we can provide transit agencies and municipalities with the funding certainty they need to advance projects now.”

“We will be submitting our application for new subway trains ASAP (today if possible)!” the TTC said on social media, after hosting Trudeau and Finance Minister Chrystia Freeland at Greenwood Yard.

Funding under the new Metro-Region Agreements will depend on cities and transit agencies working with provincial governments to develop long-term capital investment plans for transit and active transportation infrastructure, the PMO release said. As well, “to access long-term, predictable funding through this program, municipalities will need to take actions that directly unlock housing supply” by eliminating mandatory minimum parking requirements within 800 metres of a high-frequency transit line, and allowing high-density housing at the same distance from high-frequency transit lines and post-secondary institutions.

The Canadian Urban Transit Association welcomed the announcement. “CUTA has long championed the need for permanent federal funding, and today’s announcement marks a significant milestone in our efforts to secure reliable funding for transit infrastructure across Canada,” President and CEO Marco D’Angelo said in a release. He praised the new fund as “a historic investment that will help transit agencies address critical infrastructure challenges and support Canada’s economic, housing, social, and environmental goals.”

‘Parallel Universe’

Transit riders and their supporters pointed to the absence of any news on funding for day-to-day transit operations, as well as the timing of a funding announcement that takes effect in 2026, after the next federal election.

“To transit riders, it feels like this funding announcement is taking place in a parallel universe,” said Denis Agar, executive director of Movement: Metro Vancouver Transit Riders, in a release coordinated by Environmental Defence Canada. “Capital funding to build transit will be crucial for future generations, but what about the people that are riding transit today? The ones that are constantly stuck in congested, overcrowded buses? When is our funding announcement?”

“We are concerned that Prime Minister Trudeau made an announcement at a facility that maintains aging Line 2 subway trains, but did not provide certainty that federal funding for new Line 2 subway trains will come through when it’s needed,” added TTC Riders Executive Director Shelagh Pizey-Allen. “The Permanent Public Transit Fund would be even better news if it began immediately and ensured that subway trains could run as frequently as possible.”

Environmental Defence Clean Transportation Program Manager Nate Wallace called the announcement “a public transit funding program that doesn’t actually fund transit service. A lack of public transit operating funding means buses don’t show up on time, riders spend more time waiting, and fares continue to climb faster than inflation. It will result in continued growth of transit vehicle fleets that cities can’t actually afford to put into service.”

Wallace told The Energy Mix that groups advocating for federal operating funds for transit agencies “were expecting to be disappointed” by this week’s announcement. In February, an analysis by Environmental Defence and Montreal-based Équiterre concluded that permanent transit funding could help double ridership on mass transit and reduce transport emission by 65 million tonnes by 2035. But only if it included key policies like “public transit operating funding, federal strings to encourage housing density near public transit, zero-emission bus procurement requirements, and incentives for cities to speed up public transit service with dedicated bus lanes.”

The announcement covered some but not all of those bases, leading Wallace to conclude that Ottawa missed the opportunity to “effectively double transit ridership” by 2035.

How to Fund Operating Costs

“That’s going to take federal and provincial involvement and operating funding,” he said. Without those key ingredients, “we’re not going to see significant improvements in ridership growth, in the share of people who take public transit as their main way of getting around, and that ultimately means we’re not going to be seeing significant greenhouse gas reductions, which is very disappointing for us.”

The root of the problem, Wallace added, is that municipalities in Canada don’t have the revenue or the revenue-generating authority to provide sufficient funding to transit operations. In jurisdictions where transit works really well, he said, it’s either because cities can assess their own income or payroll taxes, or because national transit funds are available to cover operating costs.

CUTA Communications and Public Affairs Director Jon MacMull acknowledged in an interview that “many transit agencies still are struggling to have adequate operating funding for the level of transit service they need.” But he stressed that the Canada Public Transit Fund was always meant to be about capital costs.

“Today’s announcement was about capital investments, and we’re very pleased to see that involvement from the federal government,” he said. “Today is quite the investment, and I don’t think it should be completely detracted from by the fact that they’re not funding something else.”

MacMull added that the Metro-Region Agreements envisioned in the federal announcement will encourage communities to invest in electrification, zero-emission buses, and charging infrastructure, though those decisions will be “encouraged”, not prescribed. A call for proposals for zero-emission buses under the targeted funding stream “would be another avenue for electrification for those transit agencies that get additional funding.”

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Trudeau government has supported pipelines to remove bottlenecks

This article was published by the Calgary Herald on Dec. 4, 2018.

When I was elected as the MP for Edmonton Mill Woods in 2015, Alberta’s energy sector was hurting. The oil price downturn was having a real impact on my community, neighbours, family and friends.

Our government understood that Alberta needed our support, so we stepped up. Not with words, with actions. That came in the form of $250 million to offset the impact of low oil prices, $1 billion to support small and medium-sized Alberta businesses, $30 million to enable Alberta to clean-up orphaned wells, and $1.3 billion to extend EI benefits to laid off energy sector workers in time of need. We also extended work-sharing programs to keep Albertans working.

In the past three years, we’ve invested $8.5 billion in combined infrastructure funding to build roads, bridges, public transportation, and much, much more.

These are more than dollar figures: they are investments in the people of Alberta. That is why when I see Conservative politicians try to make the claim that our government hasn’t been there for my province, I feel an obligation to set the record straight.

Beyond investments, we have taken decisive action. Before and after taking office, we have supported the Keystone XL pipeline and, more recently, fought on behalf of our energy sector during the negotiations of NAFTA 2.0. The result? The elimination of a clause that prevented Alberta from having full ownership over our resources, and administrative changes that will save the oilpatch more than $60 million a year in fees and costs.

All of this is having an impact. We just saw more evidence this week, as Statistics Canada reported that global investment in Canada was up again during the third quarter of this year — led by the largest investments in mining and energy companies in nearly two years.

Albertans now face another challenge — a perfect storm that has led to a painful oil price differential. I know how painful this differential is. And I know how frustrating it was to see Jason Kenney and his federal government fail for 10 years to get a drop of oil to non-U.S. markets — over 3,500 days and nothing to show for it.

Last weekend, the government of Alberta made an important decision regarding production curtailment, which they have determined to be in the best interest of Albertans. Our government, the government of Alberta, industry, and the hard-working Canadians who work in the oil industry all share the same goal: ensuring that every barrel of Canadian oil gets its full value.

We know that the best way we can support the energy sector is to make sure producers can diversify exports to non-U.S. markets. We are making significant investments in the safety of Canada’s rail system and eliminating bottlenecks for shipped commodities. However, the long-term solution lies in building pipelines that allow our resources to get to non-U.S. markets. That is what our government is focused on, and that is what I’m working each day to deliver.

The Enbridge Line 3 pipeline project, which we approved, is under construction and will come into operation in 2019. This will bring with it a major boost to pipeline capacity — some 370,000 barrels per day.

And, of course, we invested in the Trans Mountain expansion project in the spring, as it faced political headwinds. This was an investment in our energy sector, Albertans and Canada’s future.

In response to the Federal Court of Appeal ruling, I am now focused on making sure we move forward on this project in the right way through meaningful consultations. Doing this is not only the right thing to do, it’s also the most efficient and focused path forward. There’s a lot of work ahead, but it is my top priority. I spent most of last week on the road in B.C., engaging with Indigenous communities. All told, I have met with over 40 communities from all along the route. I am doing this because I understand that trust needs to be rebuilt. This is what we mean by moving forward in the right way.

Even with all of this hard work and support for Albertans, I know there is always more that our government can do. That’s why we are working across federal departments and with the provinces of Alberta and Saskatchewan to analyze solutions to the differential. I have also asked the NEB to look at all options to ensure our existing pipeline capacity is being utilized efficiently and provide a report as soon as possible. We are taking action and we will deliver results.

Alberta, our government has always had your back, and always will.

Amarjeet Sohi is the federal minister of natural resources and the MP for Edmonton Mill Woods.

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New zero emission vehicle policy could lock Canada into EV “replacement model” just as TaaS takes hold in market

The Canadian government announced late last month that a national zero emission vehicle – read, electric vehicle – will be developed by 2018. The Liberals have a chance to get it right and do plenty of good for consumers and the economy, but they have an equal chance of completely screwing it up and wasting a lot of taxpayer money to little effect.

Canada needs a clear-eyed view of electric vehicle technology, EV ownership and business models, and the potential EVs hold for a huge country with a northern climate.

Canada is not California.

Speaking of California, Gov. Jerry Brown brought in his own EV strategy a few years ago and the results are underwhelming.

The state implemented a zero-emission vehicle credit that doesn’t encourage automakers to put more EVs on the road, but puts money in a manufacturer’s pocket anyway.

Brown set a target of 1.5 million EVs sold by 2025 and 4.2 million by 2030, but will fail to meet that target in spectacular fashion, according to a report by the Natural Resource Defense Council last year, which predicted less than a million sold. With only 223,700 registered as of last summer, the odds of the California meeting even diminished expectations is slim.

Nevertheless, California is doubling down on EVs by spending $1 billion on public charging infrastructure. Who will pay the bill? Consumers, via rate hikes.

Why does California matter?

Because eco-hype cyclers want to replicate it in Canada.

When Premier Christy Clark revised British Columbia’s climate plan last year, she ignored all of the recommendations from the climate leadership team she had asked to provide advice. One of the key recommendations from that group was to design a zero emissions vehicle policy just like California’s.

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The May 9 election brought BC a hung legislature, which may result in an NDP minority government backed by the Green Party. Here is Ian Neville, the City of Vancouver’s EV policy analyst (are we surprised Vancouver has one of these?), noting that the NDP/Green agreement called for accepting all of the BC climate team’s recommendations and pumping the tires of “strong government policy” to hasten the “electric mobility future.”

Canadians can reasonably expect a Premier John Horgan to push a similar scheme at the national level now that the federal government is developing a zero emissions vehicle policy.

According to Ottawa, transportation accounts for about 24 per cent of Canada’s emissions, mostly from cars and trucks.

“New measures to improve efficiency across the transportation sector, as well as to encourage zero-emission vehicles, will complement carbon pricing and take advantage of a low-carbon electricity grid,” Environment Minister Catherine McKenna said in a press release when the new direction was announced.

The mostly likely “new measures” will be subsidies designed to lower the cost of EVs, which are generally twice the cost of an equivalent internal combustion engine (ICE) car and more money to subsidize building public charging infrastructure.

In other words, the California approach.

Both measures will fail, just as they have failed in other countries (EV sales and ownership rarely breaks the one per cent of sales and one per cent of national auto fleet threshold, except for Norway and Sweden, small countries with Nordic governments happy to subsidize at high levels).

Why? Because they will support the “replacement model” of private vehicle ownership (consumers simply replace an ICE car with an EV), which will mostly take 50 years or more to displace ICE vehicles as the dominant form of road transportation.

And all those taxpayer dollars will be spent just as new technology (autonomous driving) and a new business model (Transportation as a Service, or TaaS. Read my columns here and here and here and here) promise to revolutionize the way we move people around Canada – especially in mega-cities like Vancouver, where traffic congestion is already a major problem and will only get worse.

If the Canadian government locks itself into policies based on the replacement model and a few years later TaaS begins to transform transportation, then the Justin Trudeau Liberals will have set back the diffusion of EVs rather than aiding it.

And let’s not forget one of the major impediments to the spread of TaaS will be the archaic taxi monopolies that cities like Vancouver and Calgary have propped up for decades and – in the face of competition from ride-sharing company Uber – have been very reluctant to tackle for political reasons.

The next step for the federal process is a national advisory group that will consult with Canadians nd provide recommendations in five areas: vehicle supply, cost and benefits of ownership, infrastructure readiness, public awareness, and clean growth and clean jobs.

Astute readers will note that EV business/ownership models are not on that list.

They need to be. The replacement model will take 20 to 30 years (until the next generation of EV battery is ready) to make any real progress in the market.

Stanford economist Tony Seba predicts that TaaS using self-driving EVs will begin revolutionizing transportation as early as 2020. My reporting suggests the date will be closer to 2030 because Seba is overly optimistic about when autonomous technology will be ready.

Nevertheless, the point here is that the electrification of transportation is potentially on the cusp of radical change and Canada must not be stampeded by the likes of Neville and Vancouver into betting on the wrong model.

Go slow, get the policy right, and reap the benefits. Canada could do worse than follow that strategy.

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