Even if only for a matter of weeks, Mark Carney is likely to become prime minister of Canada when this Liberal leadership race concludes. His vision for the country is rife with climate strategies and schemes belonging to a world most can remember, but that no longer exists.
The world has moved on. International accords such as the 2015 Paris Agreement, cooperation between financial institutions on climate goals, and more carbon pricing are no longer priorities for Canada in 2025. Canada is not a superpower, no serious person would say differently, and we have to swim in the global current of change.
This doesn’t mean bowing to the whims of an unpredictable strongman, but it does require recognizing that the Obama world of liberal internationalism and high-minded ideals is gone. Whatever chance it had of enduring died with Joe Biden’s presidency.
Russia’s invasion of Ukraine in 2022 had already scrambled world energy supply lines, and Trump’s return to the White House, along with the rise of AI technology, have changed everything.
AI in particular has been one of the biggest shifts since Carney’s days as a central banker. The astonishing and rapid growth of AI has resulted in eye-popping demands for energy, with data centres set to consume more electricity than entire cities.
Grids will be pushed to their limits. This spells danger for Canadian provinces like British Columbia, whose hydroelectricity regime can no longer reliably supply its economy and population. For consecutive years now, BC Hydro has been forced to import energy from Alberta and the U.S., the latter of which may soon be subject to counter-tariffs and other heightened costs.
Carney’s ideas about the climate and the so-called “energy transition” are at odds with his promises to grow the use of AI in the public service and future economy. Canada will have to build many data centres to keep up with other G7 countries, but where will their energy come from?
Nuclear energy is the most commonly cited solution, and several American big-tech giants have made plans to use small modular reactors (SMRs) to power the data centres. Once built, nuclear power provides an abundance of cheap, low-emitting, and reliable energy.
B.C. has standing laws that prohibit the building of nuclear generators, and the provincial NDP government unambiguously rejected the possibility of changing that. In the meantime, wind and solar will not cut it, both being subject to weather patterns that make them unreliable and insufficient.
The best alternative is natural gas, 1,368 trillion cubic feet of which sits beneath the feet of Canadians and can serve as an abundant source of power for the modern economy. Unfortunately, Carney’s ideas about carbon pricing would fall directly on the producers, making it far more expensive while deterring investment.
Trump is an unabashed economic nationalist, and Canada needs to make itself competitive and attractive to both energy and technological investment.
Canadian natural gas is more important than ever, both for the country and the world. After Russia invaded Ukraine, EU countries had to rapidly seek new, stable suppliers of energy to replace the massive Russian gas imports that supplied much of the EU.
The war revealed how energy security amongst friends and allies was just as important as emissions reductions, if not moreso. Canada’s first opportunity was squandered when the Liberal government rebuffed European calls for Canadian LNG as having “no business case”.
Germany has been forced to turn back to coal as a power source as energy bills surge, driving German automobile manufacturers to close down some of their plants. Canadian LNG exports need to be prioritized for domestic use and exports abroad, and insisting on slapping punitive carbon taxes on the industry is against Canada’s interests.
Another challenge to Canada’s economic future is the recently proposed, $44 billion USD LNG project in Alaska. Envisioned as a joint US-Japanese, the project would establish Alaska as the leading LNG exporter to Japan, one of the world’s largest importers of natural gas.
If completed, the Alaska LNG project would be a direct threat to BC’s natural gas industry. One of the major projects, Cedar LNG in Kitimat, is set to come online in 2028, followed by two more in Squamish and near Prince Rupert. B.C. has a good head start, but the US and Japan plowing ahead with $44 billion LNG deals should be a wakeup call to Ottawa.
An LNG export deal with Japan of similar value should be completed while American LNG still has to pass through the Panama Canal to get to Japan, not after it starts being shipped from Alaska. Taxing natural gas producers will slow potential projects down and make Canada less competitive.
Canada cannot diversify its trading partners if the U.S. is allowed to overtake our industries and slowing it down with carbon taxes and Canada’s onerous regulatory regime in the name of outdated climate movements is a gift to President Trump.
Like it or not, major international initiatives live or die depending on American involvement. This was true of the Trans-Pacific Partnership (TPP), and it is true of NATO.
Mark Carney’s own attempts to forge agreements such as the Glasgow Financial Alliance for Net Zero (GFANZ), which has been abandoned by major American and Canadian banks and financial institutions, have collapsed. Canada needs to prioritize building up our own internal energy infrastructure and making it as competitive and attractive to investors as possible.
This is the age of nationalism, and we should recognize the opportunities it will bring to Canada. If Carney’s pledge to make Canadians “masters of our own house” means trying to captain toothless climate accords and drive away investment, then he should not be the head of our house.
National Post