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By Jake Fuss, Julio Mejía, Elmira Aliakbari, Karen Graham and Jock Finlayson
State of the Green Economy
- The Fiscal Cost of Canada’s Low-Carbon Economy documents spending initiatives by the federal government and the governments of Ontario, British Columbia, Alberta, and Quebec since 2014 to promote the low-carbon economy, as well as how much revenue they have foregone through offering tax credits.
- Overall, the combined cost of spending and tax credits supporting a low-carbon economy by the federal government and the four provincial governments is estimated at $143.6 billion from 2014–15 to 2024–25, in nominal terms. When adjusted for inflation, the total reaches $158 billion in 2024 dollars.
- These estimates are based on very conservative assumptions, and they do not cover every program area or government-controlled expenditure related to the low-carbon economy and/or reducing greenhouse gas emissions.
- Sizing Canada’s Green Economy assesses the composition, growth, share of Gross Domestic Product (GDP) output, and employment of Canada’s “clean economy” from 2014 to 2023.
- Canada’s various environmental and clean technology industries collectively have accounted for between 3.07% and 3.62% of all-industry GDP over the 10-year period from 2014 to 2023. While it has grown, the sector as a whole has not been expanding at a pace that meaningfully exceeds the growth of the overall Canadian economy, despite significant policy attention and mounting public subsidies.
- The clean economy represents a respectable and relatively stable share of Canada’s $3.3 trillion economy. However, it remains a small part of Canada’s broader industrial mix, it is not a major source of export earnings, and it is not about to supplant the many other industries that underpin the country’s prosperity and dominate its international exports.
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