OTTAWA — Canada must boost investments in the green transition in the federal budget to be presented next week, or else it risks losing out on a one-time opportunity to boost jobs and economic growth, Finance Minister Chrystia Freeland said on Monday.

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Canada’s 2023-2024 budget will include a “serious investment” in clean technologies, Freeland said in a speech in Oshawa, Ontario, without providing details, though she also promised fiscal restraint in the face of high inflation.

“Investments in our economic capacity are fiscally responsible,” Freeland told reporters after her speech, saying not making those investments at what is a “crucial crossroads” would be “reckless” and “irresponsible.”

“We … can invest aggressively in the clean economy of the 21st century in a smart, focused, Canadian way. Or we can be left behind,” she said.

Countries across the globe are trying to take advantage of a rapid shift to low-carbon energy, and the passage in the United States of the Inflation Reduction Act (IRA) last year provides massive incentives for those who invest there.

Canadian Prime Minister Justin Trudeau has set a goal of net-zero carbon emissions by 2050, and all new cars sold from 2035 must be zero emissions. Car manufacturers in the U.S. and Canada, which are already highly integrated, are in the process of pivoting toward building more electric vehicles (EVs).

Greater cooperation on critical minerals used to make EV batteries is going to be a topic of discussion between Trudeau and U.S. President Joe Biden, who is visiting Canada later this week, officials in Ottawa said.

China now dominates the world’s supply of critical minerals for EV batteries.

Russian President Vladimir “Putin and the pandemic have cruelly revealed to the world’s democracies the risks of economic reliance on dictatorships,” Freeland said.

Since Canada has limited financial firepower compared with the United States, it will focus on increasing the electricity grid’s capacity, battery manufacturing and mass timber construction, said a source familiar with the budget plans.

“From clean energy, to clean technology, to battery manufacturing, to electric vehicles, we can become a global leader in the growing clean economy,” Freeland said in her speech. “We can create hundreds of thousands of good, middle class jobs.”

Freeland also said there would be targeted inflation relief for the “most vulnerable” Canadians.

“This support will be narrowly focused and fiscally responsible,” she said.

© Thomson Reuters 2023