Canadian climate policy is competitive relative to the U.S.: TD Bank

Spending on Canada’s clean energy transition over the past few years has kept pace with the U.S. on a relative basis, according to a report from TD Economics on Monday.

Canada has spent around $139 billion on its various energy transition measures since it released its Fiscal 2021 budget, according to a report authored by Francis Fong, a managing director and senior economist at TD Economics. This level of spending accounts for about five per cent of nominal gross domestic product (GDP), according to Fong.

Canada’s spending in this area “compares favourably” to the U.S., Fong said, which is estimated to spend US$393 billion through its Inflation Reduction Act or about 1.5 per cent of nominal GDP.

“The higher proportional outlays are likely a necessity for a small, open economy that needs to punch above its weight in order to compete for similar foreign investments relative to industrial powerhouses… that historically are able to attract more capital and form centers of innovation,” Fong said in the report.