By Cornelis Van Kooten, Climate Realists of B.C., July 2026
Summary: Canada’s climate goals, including a national clean-energy grid and zero-polluting homes while excessive regulation strangles resource extraction and export, are economically unsustainable. Without resource exports, including fossil fuels, the country must rely on imports for goods and services, leading to inflation and increasing poverty. Furthermore, the focus on renewable energy sources like solar and wind is impractical.
Encouraged by the UN’s former climate czar and now Prime Minister, Mark Carney, Canada is on an economically destructive course in its pursuit of climate virtuosity. It has the highest carbon tax in the world ($C110/tCO2) and its mayors have put out an “Elbows Up for Climate” manifesto that has five policy aims (https://elbowsupforclimate.ca/):
- A national East-West-North clean electric grid, powered by renewable energy not fossil gas, to make Canada a clean energy superpower and secure our energy sovereignty;
- At least two million non-market homes that are zero-polluting, efficient and built to the highest standards, creating more affordable, transit-linked communities;
- Retrofits and mass heat-pump and solar installations across the country that will cut energy bills and pollution and spur economic activity in every community;
- A clean transportation system with a national high-speed rail network, extended with Canadian-made electric buses connected to local transit; it begins by reversing cuts to federal transit funding and scaling up investments;
- A national resilience, response and recovery strategy to rebuild from the disasters already baked in, funded by a tax on excess oil and gas profits from the war in Iran. This follows the lead of our European Union allies and ensures polluters pay for the damages caused by their activities and could generate up to $46 billion in revenue.
All of this costs money—a lot of money. I’m not sure if mayors and their advisors understand simple economics.
For example, if a country imports goods & services, it must pay for this via exports. If we demand G&S from the U.S., China, Europe, etc., we need to export. If not, the Canadian dollar falls in value, meaning that imports become more expensive and inflation is the outcome.
This is particularly insidious as we import the machinery and other inputs that enable us to manufacture things. If prices of these go up, we have built-in inflation. And inflation is perhaps the worst economic outcome as it will lead to poverty for almost the entire nation. Inflation is what has plagued places like Argentina, Venezuela, and many other poorer countries—it can be very difficult to overcome. Recall that Argentina was a rich country along the lines of Canada prior to WWII.
So what can we export? One suggestion is that we again open our housing market to foreign buyers. They purchase a property right—a piece of paper. Foreigners can also purchase Canadian government bonds—Canadian debt. This too offsets purchase of imports. Or we can sell foreigners actual goods or services.
Automobiles are on the way out due to the “Elbows up” movement, as are other goods. We can sell natural resources to other nations, but resource extraction is also hampered by regulations and opposition. Unless we change course, we are doomed to increasing poverty.
A couple of years ago, I looked at the demand for electricity because of EV subsidies. I suggested that B.C. and other jurisdictions needed to start building new power plants, and not unreliable solar or wind.
As a result of EV subsidies and promotion, B.C. has become a net importer of electricity, some 32.6 TWh before counting output from the new Site C dam. However, if Site C produced at capacity, it would reduce imports by 8.5 TWh, leaving a shortfall of domestic production of 24.1 TWh, or the output of three Site C hydro facilities.
But Site C could never produce at 100% capacity—60% is more realistic, which means it would only reduce imports to 27.3 /TWh or four decent-sized (nearly 1000 MW capacity) gas plants. Given that snowpacks have been low due to “drought” conditions, this need would be reduced if snowpacks were normal; but the need would remain if the U.S. cut off electricity exports because of higher needs south of the border.
Using data from the Alberta grid, my peer-reviewed research indicates that it is impossible to generate enough electricity solely using renewable energy sources, mainly solar and wind.
It is possible to reduce emissions of CO2 by nearly 40% by relying heavily on intermittent wind and solar, plus some biomass, but the costs are quite high as one needs to build out gas capacity for periods when renewable energy is unavailable. These results hold even if utility-grade batteries are available!
However, if nuclear power is allowed along with wind and solar, an optimistic scenario suggests that CO2 emissions can be reduced by slightly more than 90%, but never by anything close to 100%. And what is most interesting: nuclear power outcompetes wind and solar for battery capacity.
Then there remains another issue regarding net zero. First, Canada is not truly interested in NZ by 2050, otherwise it would not have agreed to purchase 12 diesel submarines from Germany and upwards of 88 F-35 (or 30 F-35 and 60 SAAB Gripe) fighter jets. The submarines and planes will all be in full operation in 2050. Does the Prime Minister think the submarines and fighter jets are going to use something other than a fossil-fuel product?
Second, the focus on resolving climate change is solely on (1) the electricity-generating sector and (2) carbon capture and storage (CCS). In Canada, electricity accounts for only about one-fifth of fossil-fuel use. Ignoring the remaining sectors, except perhaps transportation (viz., movement towards EVs), means we are not truly interested in getting to NZ. Further, CCS is an untried and unreliable investment. Where it has been tried, it has turned out to be extremely expensive and abandoned. And it might not be effective and may even be dangerous.
In southern Saskatchewan, where CO2 is injected to aid secondary oil recovery, one engineer told me that they were unable to track the CO2 and thought that it was escaping somewhere. As to danger, it might be worthwhile to recall that on August 21,1986, an eruption of CO2 from Lake Nyos in northwestern Cameroon killed more than 1,700 people and 3,500 livestock.
It is time that Canadians start to consider the real world instead of fictitious stories about how we can and should eliminate fossil fuels from our economy. It might be necessary to recall that even the IPCC does not believe human emissions of CO2 and other greenhouse gases could be considered an existential threat.1
G. Cornelis van Kooten is a Fraser Institute senior fellow, held the Canada Research Chair in Environmental Studies and Climate at the University of Victoria for 21 years, and is currently scholar in residence at Trinity Western University.. His research interest focuses on natural resource economics and management, and issues related to the economics of climate change. He is a member of Climate Realists of B.C.
- The IPCC no longer considers the “extreme” RCP8.5 scenario, often cited as the default scenario by mainstream media, as realistic, invalidating the “climate catastrophe” scenarios. [↩]