Could Canada be a leader in green transformation?

Analysts claim that one of the leading economic powers has the financial resources to invest in green transformation. With sufficient funds, Canada can spend billions of dollars on this matter without endangering the sustainability of its public finances. Tax revenues represent a steady flow of money. The subsidy programs created as a result of the COVID-19 pandemic are coming to an end, the economy is doing better than expected, and there is space to fund the green sector.

Resources are available, but they must be cautious.

Canada's Finance Minister Chrystia Freeland has stated that she would proceed cautiously in the upcoming budget and would not prevent the central bank from fighting inflation, which was almost three times higher than the 2% target in the beginning of the year. This takes into account the possibility of a recession, which could reduce stable tax revenues, and the cost of loans must also be kept in mind.  The transition to green investments is a critical area for the country. Many experts argue that Canada should be doing much more because it has the potential to become a leader in this area. According to Randall Bartlett, Director of Canadian Economics at Dejardins, investing in the transition to green economy should provide certainty. Rebekah Young, head of economic crisis protection at Scotiabank, says that at this stage of the business cycle, saving is a better option unless spending is essential. She expects the debt-to-GDP ratio to remain flat and the government is likely to build up a reserve in case future economic surprises, such as pandemics, which could threaten positive economic growth.

Canada's potential is high

Canada could spend an additional CAD 20 billion (approx. USD 14.8 billion) annually on the green economy. This would keep the net debt-to-GDP ratio below 45.5% in 2021/2022, what would represent the best results among the G7. Flavio Volpe, president of the Automotive Components Manufacturers Association, says that every automaker in North America (there are 15 major ones) should electrify by 2030. Each will purchase batteries from processing plants that don't exist yet.

Canada's investment in the green transition is a matter of getting the balance right, requiring consideration of many factors, such as the state of the economy, the cost of loans, and the need to remain competitive with the United States of America. Overall, the provision for these investments could be 7.5 to 10 billion CAD. The estimates also include new spending on health care over the next decade, which was announced in early February and amounts to CAD $46.2 billion (approximately USD 33.9 billion).

Olivia Lacenova, analyst at Wonderinterest Trading Lt

 

This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.

🍪 Cookies

We use cookies to store, access and process personal data to give you the best online experience. By clicking Accept Cookies you consent to storing all cookies and ensure best website performance. You can modify cookie preferences or withdraw consent by clicking Cookie Settings. To find out more about cookies and purposes, read our Cookie Policy and Privacy Notice.

Cookies settings


Cookie Control

What are cookies?

Cookies are small text files that enable us, and our service provides to uniquely identify your browser or device. Cookies normally work by assigning a unique number to your device and are stored on your browser by the websites that you visit as well as third-party service providers for those website. By the term cookies other technologies as SDKs, pixels and local storage are to be considered.


If Enabled

We may recognize you as a customer which enables customized services, content and advertising, services effectiveness and device recognition for enhanced security
We may improve your experience based on your previous session
We can keep track of your preferences and personalize services
We can improve the performance of Website.


If Disabled

We won't be able to remember your previous sessions, that won't allow us to tailor the website according to your preferences
Some features might not be available and user experience reduced without cookies


Strictly necessary means that essential functions of the Website can not be provided without using them. Because these cookies are essential for the properly working and secure of Website features and services, you cannot opt-out of using these technologies. You can still block them within your browser, but it might cause the disfunction of basic website features.

  • Setting privacy preferences
  • Secure log in
  • Secure connection during the usage of services
  • Filling forms

Analytics and performance tracking technologies to analyze how you use the Website.

  • Most viewed pages
  • Interaction with content
  • Error analysis
  • Testing and Measuring various design effectivity

The Website may use third-party advertising and marketing technologies.

  • Promote our services on other platforms and websites
  • Measure the effectiveness of our campaigns

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83.20% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.