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Canada needs to move aggressively to shift the transportation sector off fossil fuels and get people out of cars while taking full advantage of the economic opportunities available in the transition.

In an online roundtable Wednesday, a chorus of policy experts urged the federal government to undertake a 10-year, multibillion-dollar effort to electrify the transport sector as part of its effort to achieve net-zero emissions of greenhouse gases.

Transportation – including passenger vehicles, commercial trucks, planes and trains – accounts for 25% of Canada’s emissions. Emissions from the sector have grown by 53% since 1990.

“We have to tackle this sector if you’re going to get to the net-zero target,” moderator Diana Fox Carney said at a session hosted by Corporate Knights magazine as part of its seven-part Building Back Better event series. “Canada is perhaps lagging some other countries in this regard,” with lower penetration of electric vehicles, the lack of manufacturing of EVs and a lack of forward thinking on mass transit, she noted.

Other analysts, including the International Energy Agency, have noted that Canada’s passenger fleet has one of the worst fuel-efficiency ratings because of lower gasoline prices, long distances and a preference for gas-guzzling SUVs and pickups.

The federal government has pledged to pursue a goal of net-zero emissions by 2050 ­– a target that requires a massive effort to virtually eliminate the use of fossil fuels in industry, transportation and heating buildings. (Any remaining emissions from continued fossil-fuel use would be offset through natural and technological means of removing carbon from the atmosphere.)

To rev up progress toward the net-zero goal, Corporate Knights is encouraging the Liberal government to launch a massive clean-energy stimulus program as it looks to revive an economy that has been devastated by the COVID-19 pandemic.

Several environmental organizations have also echoed the advice of the International Energy Agency that governments should concentrate stimulus spending on clean-energy initiatives to speed up the transition to a low-carbon economy.

Governments need to introduce policies that expand the demand for and the supply of electric cars, but also electric and hydrogen-powered freight vehicles, which account for 42% of transportation emissions, said Carolyn Kim, Ontario regional director for the Pembina Institute.

A table-setting white paper prepared by Ralph Torrie of Torrie Smith Associations and Céline Bak of Analytica Advisors said that a $24 billion clean-transportation investment over 10 years would save drivers $57 billion at the gas pump while generating the equivalent of 17,700 full-time jobs a year and slashing greenhouse gas emissions by 96 million tonnes over the decade.

Included in the proposal is a one-year, $6-billion plan to provide free transit ridership. The program would encourage commuters to return to mass transit after the practice of social-distancing ends. It would also target poorer Canadians who rely on public systems.

“With COVID-19, there is a risk that people who have used transit will revert to cars,” Bak said in an email after the webinar. Underwriting those systems “ensures that public transit authorities are not weakened by COVID-19 and that the GHG impact of COVID-19 is minimized while putting money directly into the pockets of many people,” she added.

The plan also proposes to “electrify” the Trans-Canada Highway with a network of fast-charging stations that can recharge a vehicle battery in five minutes. And it urges Ottawa to help finance the purchase of electric vehicles, especially for fleet owners who currently face higher financing charges for EVs than they do for traditional gas- or diesel-fuelled vehicles.

While there are incentives and policies designed to encourage people to purchase EVs, governments must also act to ensure Canada capitalizes on the opportunities that arise from the transition, said Amarjeet Sohi, a former Liberal cabinet minister. That includes areas such as supplying the metals and minerals required for batteries and wires, expanding the country’s existing presence in the manufacturing of low-carbon trucks and buses, and attracting investment from the global auto sector for the new electric models and their parts.

Decisions on where to locate EV assembly plants are being made outside Canada, and that leaves this country at a disadvantage, said Jerry Dias, president of the Unifor union. Unifor represents thousands of manufacturing workers, mainly in the auto industry that is based in Southern Ontario.

As global automakers expand their offerings of EVs and hybrids, only a small handful of those models are earmarked for Canadian plants, Dias noted. Parts manufacturers are at risk because EVs have far fewer components – no transmissions, radiators or exhaust systems. “We need to move and we need to move quickly” on an industrial strategy, Dias said. “I’m concerned we’ve been slow at getting into the game and we have a lot of ground to make up.”

Marcelo Lu, president of BASF Canada, said this country is well poised to participate in the economic opportunities that will come with the transition.
“I believe Canada is ripe to contribute because it has the resources,” Lu said. However, he added governments may have to share to cost of developing those resources in order to “tip the scales.”

One area in which Canada has carved out a niche is the development of electric buses, run on either plug-in batteries or hydrogen fuel cells that power an electric engine.

Investments in charging infrastructure will support further expansion of battery- and hydrogen-powered buses, trucks and trains, said Josipa Petrunic, president of the Canadian Urban Transit Research and Innovation Consortium.

 

Shawn McCarthy writes on sustainable finance and climate for Corporate Knights. He is also senior counsel for Sussex Strategy Group.

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