StrategyCorp Newsletter: A Climate of Change
A Climate of Change
Summer Look Back 2023
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Record-breaking wildfires burning across the nation have dominated news cycles this summer, revealing a new reality for Canadians. With the impacts of climate change facing us head on, from droughts, floods, warmer than normal water temperatures, and unrelenting forest fires, all eyes are on our government and regulators as Canadians search for solutions.
What We’re Tracking
COMING IN HOT
After the federal government announced a new suite of planned clean energy regulations and grants to achieve a net-zero grid by 2035, Danielle Smith’s UCP government told the feds that Alberta will “chart its own path” to net-zero.
This statement follows Alberta’s recent controversial decision to pause all renewable energy approvals until 2024.
Power and politics: A federal-Alberta working group met in September to address the two governments’ energy policy divide. The meeting concluded with Alberta pledging to reach carbon-neutrality by 2050—but it came with a threat: any emissions cap announcement from Ottawa would “risk the viability of the working group’s continued discussions.”
What to watch for: Developments from the federal and Alberta governments’ working group focused on finding consensus around emissions reduction and electricity decarbonization timelines.
GOING NUCLEAR, AGAIN
Ontario announced its plan to build three more small modular reactors at the Darlington nuclear power site east of Toronto. The project is expected to be completed by 2036 and would generate greenhouse gas-free electricity for 1.2 million homes.
Trend watch: The Darlington SMR news came on the heels of an announcement that pre-development work will commence on a potential expansion of the Bruce Nuclear Generating Station, representing the first large-scale nuclear build in over three decades at the world’s largest operating nuclear power station.
Big picture: These investments demonstrate the ascendence of nuclear power generation at a critical time. Ontario has clearly chosen its path to increasing baseload power generation to address future energy needs – will other provinces follow suit?
ONLINE NEWS ACT
After Bill C-18 went into effect, Meta followed Google’s lead and announced its decision to remove links to Canadian news content from their Facebook and Instagram platforms, calling the law an unfair tax on links that target just a few large players.
Early fallout: Evacuees in wildfire-threatened areas of the Northwest Territories said that link-blocking during the ongoing standoff between Meta and the federal government was making it difficult to share critical and timely information.
Members of the Northwest Territories legislature also voted to delay their upcoming elections by six weeks due to the disruption and displacements caused by the wildfires. At one point during the summer, nearly 70 per cent of the territory’s population was under evacuation orders.
The big questions: Amidst the finger-pointing between tech companies and Ottawa, are Canadians truly comfortable with the availability of critical news—especially during this era of climate-induced emergencies and postponed elections? Or will that story only be read by those who Bing it?
BACK TO SCHOOL (AND SESSION)
With summer in the rear-view mirror, legislatures across the country are returning to session, with representatives feeling refreshed and ready to move their priorities forward.
Keep an eye on: With shifting poll numbers and politically charged atmospheres in many legislatures, governments across the country will be looking to frame a positive storyline for the months ahead. Expect lots of politics and a battle for who controls the narrative.
MANITOBANS GO TO THE POLLS
The NDP and PC Party had been polling in what looked like a dead heat with control of the Manitoba Legislature hanging in the balance. But in recent days, the NDP seems to be pulling ahead. The PCs, now led by Premier Heather Stefanson, have been in power since 2016, but NDP leader Wab Kinew looks like the most serious challenger they’ve faced.
Key impact: Prairie provinces have been staunchly conservative for several years. If the NDP can break through in October, it would mark the first victory for them in a prairie province since 2015. An NDP victory would make Kinew the first Indigenous premier of a Canadian province, following in the footsteps of Richard Nerysoo, who in 1984 became the first Indigenous premier of a territory with his election in the Northwest Territories.
NATIONAL ADAPTATION STRATEGY
Released in June, the strategy is intended to make the country more resilient to the impacts of climate change. The plan is centered around five interconnected systems: disaster resilience, health and wellbeing, nature and biodiversity, infrastructure, and economy and workers.
Bringing it into focus: Delivering results on climate adaption and mitigation will be an increasing priority for governments across the country, but much of the decisions about how to deploy those resources remain to be made. Companies who can deliver value towards these priorities will have great opportunities in the years ahead.
The Canadian economy slowed down in the second quarter of 2023, with real gross domestic product (GDP) showing a small contraction. This was the second GDP decline in the past three quarters. Statistics Canada noted that drought and wildfires negatively impacted the GDP numbers of certain sectors of the economy.
As high interest rates continue to be a drag on economic activity, inflation moved in the wrong direction in August, reaccelerating to four per cent year-over-year. Two major household components, food and shelter, recorded even greater increases, scaling up between six and seven per cent compared with the same period in 2022.
A closer look: One small piece of good news is that despite the year-over-year trend, grocery prices actually decreased by 0.4 percent in August compared to July. Will this price pullback continue into the fall?