Former Bank of Canada governor Mark Carney has been appointed Canada’s Prime Minister (PM), to take over imminently from outgoing PM Justin Trudeau.
Carney, appointed leader of the country’s Liberal Party ahead of a general election, will need to use all his commercial and political acumen to boost the Canadian economy in the face of US tariffs and stave off the worst impacts of an escalating trade war.
Source: Liberal Party
Goods which meet US–Mexico–Canada (USMCA) criteria are being spared tariffs until 2 April but there are now 25% tariffs on goods that do not satisfy USMCA rules of origin, as well as a lower 10% tariff on those energy products imported from Canada that fall outside the USMCA preference, and a 10% tariff on potash. This is a key ingredient for fertiliser needed by US farmers.
Carney, who also led the Bank of England through a challenging spell, could call a snap general election or else opposition parties may force one with a no-confidence vote later this month. In 2020, he began serving as the UN Special Envoy for Climate Action and Finance.
Canada’s energy policy has made significant strides in hydrogen and clean energy. It remains to be seen how much tariffs may impact this progress, though potentially the US fossil-fuel-first strategy may push renewable investors to look north of the border.
Quebec is looking to double electricity output by 2050, while Ontario forecasts electricity demand growth of 59% by 2050.
Canada’s power grid is notably cleaner than the US, with over 80% of its electricity coming from carbon-free sources, primarily due to its abundant hydroelectric resources. In contrast, the US grid is about 60% clean (renewables and nuclear), relying more heavily on fossil fuels such as natural gas and coal.
Speaking on the Energy Gang podcast, Andrew Leach, an energy and environmental economist at the University of Alberta, said, “There has been this feeling of less partnership over time, and now amplified with ‘we don’t need their resources’ – which isn’t true, but it’s sparked a different conversation.”
Industrial gas major Air Products’ Net Zero hydrogen energy complex, backed by CD$475m federal and provincial funding, will make Edmonton the centre of western Canada’s hydrogen economy. It will contain a leading auto-thermal reformer, carbon capture operations, a power generation facility fuelled fully by hydrogen, a 35 tonnes-per-day hydrogen liquefaction facility, and an air separation facility producing liquid oxygen and nitrogen.
As part of Budget 2021, the Canada government began investing $319m over seven years in research and development to advance the commercial viability of carbon management technologies, including those related to carbon capture utilisation and storage (CCUS) and carbon dioxide removal (CDR).
More recently, CCUS funding has been provided through the country’s Energy Innovation Program (EIP).
The Crawford Nickel Sulphide project is one project in this space. It is slated to become one of Canada’s largest permanent carbon storage facilities, capable of sequestering up to 1.5 million tonnes of CO2 annually.
