Smart Prosperity

#NewThinking is good
for the environment
and the economy.

New Thinking
March 2016


From the Executive Summary

The Smart Prosperity initiative was founded by respected Canadian leaders from business, think tanks, labour, Indigenous Peoples, youth, and NGO communities. Our purpose: To harness new thinking to map out, and accelerate Canada’s transition to a stronger, cleaner economy.

This document offers a clear vision and roadmap for that transition, outlining the goals and rewards Canadians can achieve by moving in this direction and what it will take to make necessary progress. There is evidence all around us that Canada has the know-how to marry our economic and environmental values. The research and examples below demonstrate that seizing the best opportunity for Canada’s future means drawing on our time-tested strengths and historical experience. A clean, strong economy is the natural extension of our Canadian values and culture. But accelerating that transition at the pace required demands innovative thinking and a clear, unified national direction across all levels of government, all sectors of our economy, and civil society.

WHY CANADA NEEDS SMART PROSPERITY
The world is changing and the most advanced economic players are forging cleaner, more innovative economies. An emerging consensus of the world’s most trusted economic and business authorities agrees that the global economy is moving toward a new, low-pollution model built on clean innovation. This transformation is inevitable, and Canada must act fast to secure a prosperous future as the world’s leading economies reinvent themselves.

The old idea that we must choose between a strong economy and a healthy environment has been proven false. Around the world, nations are demonstrating that doing the right thing for the environment can also do right by the bottom line. This includes China’s and the U.S.’s massive clean energy investments, Finland’s bet on energy-efficiency technology, and Sweden’s pacesetting pursuit of a low-pollution economy.

This changing global economy offers opportunity for Canada, across all sectors. The rapid growth of emerging markets is putting greater pressures on already stressed resources and ecosystems. This reality, combined with the imperative to address climate change, is creating a lucrative market for low-pollution innovation across every field. The global clean-technology market is expected to exceed $2 trillion in size by 2020.

Over the next 15 years, $90 trillion in new infrastructure investments will be required around the world to achieve a global low-carbon transition. Countries that mobilize investment in clean innovation now will be best positioned to capture a share of these massive economic opportunities.

From advanced energy storage technology to sustainable urban design, and from carbon pricing to lightweight auto manufacturing, Canada has already begun to build the foundation for a next-generation economy. Our clean-tech sector now employs more than 50,000 people, and our stock exchanges host more clean-tech companies than any other country in the world.5,6 We have the tools and the wherewithal to succeed in this new economic environment, and every sector—from resource development, manufacturing, and agriculture to clean technology—stands to gain.

Stronger economic and environmental performance is the key to success. Securing our competitiveness, however, means accelerating the pace of change. In part due to our cold climate, enormous landmass, and resourceintensive economy, Canada begins from a lagging position by many measures of energy and resource productivity. But Canadians are eager to do better. The overwhelming majority of us—more than 85%—strongly support enhancing Canada’s reputation for clean manufacturing and major changes in our energy use and waste.

If our ambition is to remain economically competitive with leading nations, meet our global climate commitments, and leave future generations of Canadians with a healthy planet, then we need to make some significant strides in the next 5-10 years. That includes, for example; improving our energy, material and water consumption productivity; better protecting our natural assets (healthy rivers, forests, and oceans); and increasing innovation and “eco-preneurship” across all sectors.

Canada’s success can draw on our long-standing strengths and values, but we need the right incentives to accelerate and scale up our efforts. Smart policies can create win-win outcomes. Smart policies provide us with the tools to improve environmental protection and catalyze a stronger, cleaner economy that builds on our existing strengths. Already there is a shif across Canada toward cleaner power, smarter transportation, more conservation, and more energy-efficient buildings. And there is mounting evidence that effective policies can achieve better economic and environmental results.

In British Columbia, a pioneering carbon tax inspired a 16% decline in fuel use,
while the province’s GDP growth kept pace with the rest of Canada. Ontario’s
coal phase-out is not only North America’s largest single carbon pollution measure, but also the catalyst for a burgeoning clean-tech industry. Outside the country, Israel and Australia have used stringent water-use policies to spur innovation. Flexible pricing policies (e.g., carbon-pricing, user fees) and adaptive regulations can harness the power of the market to drive necessary shifts at the lowest cost. In sum, the right policy context will set the stage for us to establish “Made in Canada” as a globally respected brand of environmental productivity and innovation.

Canadians can rise to this challenge. We have been here before. Canada has a history of taking far-sighted policy actions to prepare for global economic changes. In the 1980s, we responded to the rise of globalization and the emergence of planetary-scale environmental problems such as acid rain and ozone layer depletion with new free trade agreements, aggressive debt reduction, and lead roles in international environmental actions such as the Montreal Protocol.

At the same time, partnerships like the Canadian Oil Sands Innovation Alliance and the Boreal Forest Agreement demonstrate our ability to collaborate across sectors to find solutions to our most pressing environmental challenges.

With leadership that looks beyond the status quo to recognize what is actually possible, this kind of collaboration has enabled us to, among other transformations, turn away from coal-fired electricity generation in Ontario and elsewhere, all but eliminate acid rain, and stop deterioration of the Earth’s ozone layer. And we have achieved this all while improving our social and economic well-being. That same kind of leadership can now build a stronger, cleaner economy that will generate the next generation of jobs and secure a better future for Canadians.