How Closing Canada’s Clean Investment Gap Will Boost Growth and Reduce Pollution

Canada stands at a crossroads. Blessed with world-class low-carbon energy, rich critical mineral deposits and a skilled workforce, the country is positioned to thrive in the global clean economy transition. Yet the reality is lackluster: we have some ways to go before we’re attracting the investment and building the projects that will boost our economic growth and long-term prospects while reducing pollution in a rapidly evolving and competitive world.

There’s no doubt, the world is prioritizing clean energy, innovative tech and electrification. Global clean investments have been growing at a rate of 22 per cent annually, outpacing oil and gas investments by two-to-one—yet Canada is still not maximizing its share of this boom. Despite being the world’s eighth-largest clean investment market (~$50 billion in 2024), Canada is well behind our more aggressive and ambitious trading partners. That means we’re not just missing out on job and economic growth opportunities, but also the affordability and pollution reduction benefits associated with electrification, clean energy and tech innovation. Provinces like Ontario and British Columbia have made strides — for example, BC Hydro’s recent power call is expected to yield $5-6 billion in clean energy capital — but more cohesive national action is urgently needed.

Here are three ways that boosting clean investment in new and traditional Canadian sectors will spur economic growth and reduce pollution:

Investing in electrifying traditional sectors reduces costs and makes products more competitive.

Canada’s ten largest non-US trading partners have policies favouring low-carbon imports. With one of the cleanest electricity systems in the world—more than 80 percent of Canadian electricity is emissions-free—many Canadian building materials and resources already enter the global market as some of the lowest-carbon options available.

One such example is Algoma Steel, which recently made the switch from a traditional blast furnace to an electric arc furnace, a $700 M investment. This shift is expected to increase production capacity, reduce the need for mined ore, enhance profitability and cut carbon emissions by 70 per cent.

Several provinces, including Ontario, British Columbia and Quebec, are using their clean energy advantage to attract major investments from high-profile companies. As global demand for electricity continues to grow, jurisdictions with reliable, low-emission power will become increasingly attractive to businesses seeking to sell to markets that demand lower-carbon products.

Investing in critical mineral mining and battery manufacturing will help set Canada up as a preferred trading partner of choice in a rapidly growing sector.

Canada’s mining sector is already a global leader, with mineral exports of $151 billion in 2023, accounting for 21 per cent of our total merchandise exports. And global demand is only increasing. Countries like South Korea and Japan — already key Canadian trading partners — are pursuing clean energy strategies that will require large quantities of critical minerals.

The global market for these resources is expected to reach at least $685 billion CAD (a 50 – 100 per cent increase) by 2040. many countries are looking to reduce their reliance on China for these goods. This presents a major opportunity for Canadian mines and workers, if we attract the necessary investment and implement policies that support responsible, timely project development to meet this growing demand.

Investing in the clean economy has major benefits for Canadian workers and communities.

Investments in the clean economy do more than boost trade and reduce pollution—they generate meaningful and lasting benefits for workers, communities and the broader Canadian economy. In fact, investments in clean sectors create more jobs per dollar than those in carbon-intensive industries. For example, every dollar invested in building efficiency creates 2.8 times more jobs than the same investment in fossil fuels, while solar power generates 1.5 times more.

Investing in Canada’s electricity grid also means more money back in Canadians’ pockets, as household energy costs are projected to drop an average of 12 per cent by 2050.

Charting the best path

Canada can create the conditions to support innovators and send strong signals to investors by setting growth goals, ensuring policy certainty and durability, and simplifying and enhancing investment incentives. Without bold and coordinated policy action, we risk falling further behind in the global low carbon- competition.

The fix is clear: ramp up investment, reduce friction, and back the sectors where Canada can win. The prize? High value- jobs, resilient growth, reduced pollution and a clean economy- powerhouse—a vision worth investing in.