The GM Oshawa Closure and Canada's Transition to a Zero-Emissions Vehicle Fleet

This post was originally published in Policy Options/ Options Politiques, on December 3rd, 2018.

The recent closure of the GM Oshawa plant has both nothing and everything to do with climate change. Nothing, in the sense that any claim that GM was motivated by altruistic desires to curtail emissions by focusing on electric vehicles is largely hogwash: The plant closure was fundamentally a financial decision made by a mega-corporation stuck making a bid to survive in a very quickly evolving global automobile market. Everything, because at a macro-scale we can in part attribute the closure to climate change, as climate change had a fundamental role in prompting that transformation of the global automobile market.

There are many questions coming out of this unfortunate event. But a couple of the important ones are, Where does this leave Canada in terms of its preparedness to participate in the 21st century automobile sector, which is largely centred on electric and autonomous vehicles? And, what role (if any) should governments, at all levels, play to improve Canada’s industrial positioning in that sector?


Canada has committed to reducing its greenhouse gas emissions by 30 percent below 2005 levels by 2030, and the international community has committed to keeping the world to 1.5°C of warming from preindustrial levels. The transport sector is responsible for a considerable part of both domestic emissions (about 28 percent of the total and growing) and global emissions (about 14 percent of the total), so the transition to a zero-emissions vehicle fleet could be a significant part of the broader climate change mitigation efforts.

There are a few considerations to keep in mind, as Canada navigates through this multifaceted transition. First, there is an important distinction between policies oriented toward shifting production and those focused on consumption. Governments have a role to play in both, but they would require very different types of actions.

On the consumption side, there are the incentives and regulations shaping consumer behaviour. The “carrots” include policies like the handsome rebates offered by some provincial governments toward the purchase of electric vehicles; the “sticks” include putting a price on carbon (making fuel-powered cars more expensive vis-à-vis electric alternatives), and jurisdictional “bans” on internal combustion engines, as we’ve seen in Paris, Madrid and Mexico City. Of course, these bans are rather intangible in terms of actual changes to law or policy, but they are nevertheless important in that they signal to consumers, commercial enterprises and vehicle manufacturers that this change is coming down the pipe, so they should start preparing for it now.

On the production side, we have to keep in mind that the 20th-century auto-sector model (in which a handful of global automakers commanded the market and much of the supply chain associated with it) is pretty much dead now. The new landscape includes a range of new players, with Tesla, BYD, Wheego, Coda, Bison, and even Apple, Google, Uber, Lyft and Zipcar vying for various aspects of the market. These companies are tackling specific challenges like automation sensors, artificial intelligence, larger batteries, onboard telecommunications, GPS, and cybersecurity integration, in the inclusion of automobiles within the sharing economy. A recent analysis by Frost and Sullivan found 1,700 start-ups around the world vying for various shares of these new auto market subsectors.

The GM closure is a wake-up call that the old model of relying on a few large players to benevolently pursue corporate social responsibility goals and drive consumer demand for more efficient vehicles is unlikely to work.

This in itself is an indication that the 21st-century auto sector is much more complex – we’re not just talking about competition between different brands of the same product (variations on the internal combustion engine). We are now talking about competition between different visions of human transportation: ride sharing vs. car-sharing vs. personal car ownership vs. new modes of public transit vs. telecommuting vs. human-driven vehicles vs. autonomous vehicles vs. plug-in hybrid vehicles vs. fully electric vehicles, and so on. The point is, policies centred on propping up the 20th-century model (such as the 2009 auto bailout) are bound to fail in this brave new world.

The good news is that if we think about the new automobile sector as one piece in a much broader multidimensional shift to a clean energy economy, things start to look a little more promising for Canada.

This clean energy shift includes the expansion and greening of the electricity sector; the development of smart grids and third-generation charging infrastructure; major improvements in autonomous vehicle technology; and the rolling out of new emissions-free equipment in the manufacturing and extractives sectors, among other changes. This is where Canada holds promise and opportunity. Whether it’s the mining of copper (electric vehicles use about four times as much copper as internal combustion engine vehicles) and other metals and minerals required for renewable energy and lithium batteries as well as for other hi-tech products, or research and innovation in new efficient or smart technologies, there are numerous opportunities for Canadian firms to participate in various aspects of the clean energy economy.

Governments at all levels do therefore have a role to play, which is to foster the clean energy transition that the players in this new auto sector will depend on to succeed. In this regard, the federal government and some provincial governments deserve at least some credit for large-scale investments they have made in programs like the Autonomous Vehicle Innovation Network, the Pan-Canadian Framework on Clean Growth and Climate Change (which included the development of a Zero-Emissions Vehicles Strategy), the tax incentives for firms using clean energy and manufacturing equipment, and other measures. Many of the incentives in the Pan-Canadian Framework support the demand side of the equation, with heaps of funding for green infrastructure (including public transport projects across the country).

If Canada is going to decarbonize its economy at some point this century, then it will need to achieve a zero-emissions vehicle fleet at some point this century as well. The GM closure is a long overdue wake-up call that the old model of relying on a few large corporate players to benevolently pursue their corporate social responsibility goals and drive consumer demand for more efficient vehicles is unlikely to work, as either an economic or an environmental strategy. Governments at all levels have an important role to play in signalling future objectives for our society, incentivizing positive action on behalf of consumers and producers, and fostering an environment conducive to high-calibre research and world-class innovation; investing in green infrastructures that support the transition; adequately and fairly pricing carbon; and regulating the “bad apples.” It is indeed a sad time for Oshawa, but hope is not entirely lost; policy-makers just need to think forward as they address this challenge, rather than replicating past mistakes.

Decarbonizing Canada: We Must Increase our Efforts in Electrification and Storage

Electric tractors, electric industrial machinery, electric trains, and batteries batteries batteries! These are the kinds of thing we absolutely need if we're going succeed in decarbonizing Canada's economy. It's a numbers game: If we completely switched to renewable energy tomorrow in the electricity sector - phasing out all coal plants and natural gas generating stations - we would still have 88% of the nation's GHG emissions to contend with! Yikes. Putting a price on carbon, increasing efficiency and eliminating waste, and building up renewables are all fine and dandy, but they can only go so far if our machinery and transport vehicles continue to be powered primarily by fossil fuels. Here's an article I wrote for Alternatives Journal about these missing pieces in Canada's climate change plan:

The Missing Pieces in Canada’s Climate Change Mitigation Plan

Canada needs to go above and beyond the Paris Agreement to make a decarbonized economy a reality

THE PARIS CLIMATE TALKS have come to an end, and a historic agreement has been reached. In Canada, environmentalists have breathed a deep sigh of relief as the federal and provincial governments have signalled their plans to collaborate on reducing greenhouse gas (GHG) emissions. However, between all the talk about putting a price on carbon, increasing energy efficiency, and building renewable energy capacity, some crucial pieces of the climate change mitigation puzzle have been largely overlooked — electrification and power storage. It is in these related areas that the provinces and Ottawa must show real leadership if Canada is going to succeed in ‘decarbonizing’ the economy.

It is one thing to green the existing electrical grid, it is quite another to facilitate the electrification of those sectors which have traditionally been dominated by fossil fuel use. Governments have overwhelmingly focused on the former, but it is just as crucial (if not more so) to find ways to electrify the machinery that has previously run on oil, gasoline and natural gas. This means greatly expanding electrical generation and storage capacity and introducing rules, regulations and incentives to change the way individuals and businesses carry out everyday tasks, particularly within the industrial, agricultural and transport sectors.

The norm for the last century has been to use diesel to power our tractors and agricultural vehicles, natural gas (or even oil) to heat our homes, gasoline to power our cars, and any mix of these fossil fuels to run our industrial machinery, construction tools and freight transport. If we want to have any hope of decarbonizing our economy Canada needs to make the shift towards electrification in all of these areas.

Let me demonstrate the absolutely crucial nature of this problem with the following thought exercise: If I told you Canada could completely green the grid overnight – that as of tomorrow only ‘carbon free’ sources of energy (hydro, solar, wind, geothermal, tidal and nuclear) will be used to generate Canada’s electricity, by what percentage would you think the nation’s GHG emissions would drop? It may surprise Canadians to learn that the answer is a measly 12 percent.  In other words, even if we completely eliminate all coal and gas-fired power plants, Canada would still have to find a way to eliminate the vast majority (88 percent) of its GHG emissions.

For many years electrification of this sort simply was not feasible due either to the inability and high cost of storing sufficient quantities of energy effectively in batteries, or the practical dilemmas involved in connecting mobile objects to an electrical current. There is no doubt these challenges persist, yet today significant inroads have been made in power storage technologies. For instance, there is Tesla’s new ‘power wall’ – essentially a large battery powerful enough to energize the typical North American home; or consider the ‘neighbourhood batteries’ that are being used to power entire communities in the UK. While domestic power agencies like Toronto Hydro have begun testing these types of large-scale electrical storage units, there is so much more that must be done at the policy level to facilitate, legislate, fund, and promote electrification and new forms of power storage across the country.The current plans for dealing with that remaining 88 percent focus almost exclusively on improving efficiency (though things like retrofits or new building codes) or putting a price on carbon. These are certainly worthy endeavours, but ultimately these measures will fail on their own because they do not address the reality that energy demand is growing and is forecast to continue growing over the coming decades (both on domestic and global terms). The only clear way to confront the reality of growing energy use while simultaneously reducing emissions is to electrify those sectors and aspects of our daily life that currently rely on fossil fuels.

The transport sector would be a good place to start. The technology exists to make buses, passenger trains and even freight trucks run on electricity, but there is still much in the way of research and development and regulation required to make this goal a reality. The previous federal government claimed climate leadership in September 2014 when it introduced regulations within the transport sector calling on vehicle manufacturers to make more efficient motors. Real leadership, however, would have looked more like the legislation passed at the same time in California, which focused on boosting the electric vehicles market.

There is no doubt electrification is an enormous challenge, but how much of a gargantuan task must it have seemed in the late 19th Century to bring electricity to Canada’s largest cities at a time when kerosene and whale oil were the dominant fuels? Genuine political leadership on climate change must include investment in research, development and innovation in electrification and new forms of power storage, not just in the areas of efficiency, pricing carbon and renewable energy. The latter are important, but we need all the tools in our climate change mitigation toolbox.