Growing Sustainably
Direction: Stuck
Risk: High
Pace: Lagging
A greener economy to enhance our economic competitiveness
We need to ensure our policy path is sustainable and not focused on short-term results that threaten better outcomes for us in the future.
That means putting the environment at the forefront of policy. Businesses and governments must ramp up efforts to reduce the nation’s carbon footprint.
But sustainable growth isn’t just about the environment. It also means avoiding easy and quick fixes—like too-fast immigration. It means minimizing external imbalances. It means being a good partner to our allies. And it means putting an emphasis on productivity.
Growth at a glance
Aspirational targets have been set across the three pillars to attain long term, inclusive and sustainable growth.
GHG emissions per unit of GDP
In 2021, Canada pledged to reduce its 2005 GHG emissions by 40‑45 per cent by 2030 under the Paris Agreement. According to the latest government data available, Canada’s progress is stalling.
While 2023 emissions hit a 27-year low of ~694 Mt CO2 eq, independent data shows that momentum flattened in 2024. Ottawa has introduced a new 2035 target—a 45% to 50% reduction below 2005 levels—yet remains opaque about the likely failure to meet its 2030 commitments.
Climate change
Primary energy supply from zero-carbon sources (%)
Canada remains a top-tier performer in low-carbon power, with 80% of its grid fed by hydro and nuclear—a profile rivalled only by Norway and Sweden.
Nuclear power generates over half of Ontario’s electricity. Bruce Power remains one of the world’s largest operational nuclear facilities, while the Darlington New Nuclear Project holds the G7’s first license for a grid-scale SMR.
This momentum extends to Western Canada through the November 2025 Canada-Alberta MOU, which commits both governments to developing a nuclear generation strategy by 2027 to deploy competitive power and SMR technology in the Alberta market.
Clean-tech currently contributes $33.4 billion to the economy. While growing, this is significantly short of the Coalition’s $100 billion national target, highlighting a need for more predictable guidelines to spur private investment.
Clean-tech contribution to GDP ($)
Canada’s clean-tech contribution to GDP has increased since 2020. However, growth has been uneven in recent years. There is still a long way to go to achieve the ambitious target set by the Coalition.
Economic Resilience
Ranking for global competitivenesss
Canada’s global competitiveness ranking over the years has gone down, from 8 in 2020 to 19 in 2024 accoCanada moves up eight spots to 11th when it comes to global competitiveness. This ranking by the Institute for Management Development (IMD) World Competitiveness Center measures a number of competitiveness issues such as the domestic economy, business efficiency, scientific infrastructure, health and environment and more. Canada ranks 1 in The Americas (10 countries), up from second place last year, and 2 in countries of populations with more 20 million people (32 countries), up from sixth place last year.
Switzerland, Singapore, and Hong Kong have been named the world’s most competitive economies in the latest IMD World Competitiveness Ranking (WCR), with Canada, Germany, and Luxembourg the most improved within the top 20.
Current trade account
The Trump administration’s tariff policy has played havoc with our trade performance. In the second quarter of 2025, the current account—which tracks the flow of money in and out of a country—swung to a record $21.2 billion deficit, as exports fell off a cliff. Fortunately, they rebounded in the third quarter, which narrowed the deficit to $9.7 billion.
That was still 1.2% of GDP, versus a Coalition target of 0%, or a balanced account.
The current account is important because it’s an indicator of how much of an economy’s spending is financed by foreign capital.
Persistent deficits make us vulnerable to economic or financial shocks. Our capacity to maintain a sustainable international balance hinges largely on our oil and gas sector. For example, exports of energy products—mostly oil and natural gas—totalled about $40 billion in the third quarter.
Without the export revenue generated by our natural resources, our dollar would weaken, and inflation and interest rates would be higher. This is a strong argument for why we must prioritize the security of our supply chains as we seek to diversify our trade relationships.
Households with access to broadband (%)
The digital divide remains a distinct problem. While 6.4% of Canadian households have access to the 50/10 Mbps broadband standard, that figure drops to 83% in rural areas.
Access is even lower on First Nation Reserves, with only 65.7% of households meeting the standard. High-speed internet is no longer a luxury; it is a necessity for remote work, virtual schooling, and operating modern farm equipment.
Without reliable connectivity, rural Canada cannot efficiently sell its resources to the world.
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