For Maclean’s eighth annual chartstravaganza, we’ve as soon as once more requested dozens of economists and analysts to ponder the 12 months to come, and select one chart that can assist outline Canada’s economic system in 2022 and past, and clarify this outlook in their very own phrases.
This 12 months, we’ve determined to launch the charts over a number of days, making this extra of a Chart Week than a one-day information binge. We’ll additionally cowl jobs and earnings, inflation, COVID, and—sure, don’t fear—real-estate outlooks.
Electric automobile gross sales, supercharged
Nicholas Rivers, affiliate professor, Institute of the Environment, University of Ottawa @riversNic
In 2021, for the primary time, greater than 5 per cent of the autos bought by Canadians had been electrical. While that is excellent news for the setting, the right-hand panel in the determine reveals that Canada lags behind many different international locations in electrical automobile (EV) gross sales. In 2021, roughly 10 per cent of the autos offered in China had been electrical. In Germany, it was 20 per cent; 40 per cent in Sweden, and 80 per cent in Norway.
However, whereas it has taken Canada and different international locations a very long time to attain the five-per-cent mark in electrical automobile gross sales (the determine on the left reveals that issues can change quickly as soon as this mark has been hit). In all of the international locations proven, electrical automobile gross sales have taken off shortly after hitting five-per-cent market share. While Norway hit that mark in 2013 and in consequence has an extended head begin in electrifying its automobile fleet, different international locations are following the same trajectory.
For instance, simply two years after hitting the five-per-cent mark in different international locations, 25 per cent of all autos offered had been electrical. And 5 years after passing the five-per-cent mark, international locations seem on tempo to have electrics symbolize 50 per cent of auto gross sales. Given the expertise in different international locations, we must always count on a fast transition in automobile markets in Canada in the approaching years.
Emissions from passenger street transport symbolize about 10 per cent of Canada’s complete greenhouse fuel emissions, and a fast transition in direction of electrification is a technique to considerably cut back these emissions.
Big emitters, huge choices
Jennifer Winter, affiliate professor, Department of Economics, University of Calgary @jenwinter_YYC
There are a myriad of emissions-pricing schemes throughout Canada for industrial emissions (the precise half of the determine). These embody the federal output-based pricing system (OBPS) and quite a few provincial applications. The methods contain necessary participation for some amenities (usually the biggest ones) and opt-in provisions for others. The majority of Canadian industrial emissions are lined by provincial applications, that are typically weaker than the federal system, however the Government of Canada lets that slide. This would possibly change. In 2022, Environment and Climate Change Canada will reassess provincial carbon pricing applications in opposition to the federal minimal customary. This means the evaluation has the potential to enhance the stringency of provincial giant emitter methods if provinces cooperate. But what if some don’t? Facilities in these provinces would possibly revert to the federal OBPS, or be topic to federal top-ups. Either manner, federal-provincial fireworks will certainly outcome. It stays to be seen how a lot dedication the federal authorities will deliver to this concern. We ought to discover out in 2022.
What’s driving down emissions
Blake Shaffer, affiliate professor, Department of Economics, University of Calgary @bcshaffer
The 12 months 2020 noticed a dramatic decline in carbon dioxide emissions in Canada, falling roughly 10 per cent versus the prior 12 months. Of course, the COVID-induced shutdown of huge components of the economic system had been largely chargeable for this decline. But because the chart reveals, that’s not all of it.
The chart is what’s often called a Kaya Identity, named for the researcher who got here up with this methodology of decomposing modifications in CO2 into: inhabitants development, financial exercise, energy effectivity and emission depth.
The latter two phrases symbolize technological enhancements and structural modifications, each in how a lot energy we use in our economic system, and how emission intensive that energy is. Looking intently at 2020, whereas it’s clear a decline in financial exercise performed the starring function, an enchancment (lower) in emission depth additionally helped to decrease CO2 emissions.
As we glance forward to 2021 numbers and past (anticipating a rebound in financial development), will enhancements in emission depth and energy effectivity be enough to maintain CO2 emissions down?
Near or far? Commute distances and electrification alternatives
Sara Hastings-Simon, assistant professor and director, MSc Sustainable Energy Development Program, University of Calgary @S_Hastingssimon
The best-selling electrical automobile globally is an electrical bike. With a small motor and a battery providing pedalling help, a variety of fashions that may carry kids, groceries, and even packages for supply, e-bikes are rising as one device in the toolbox for decarbonization of transportation. Policy makers are embracing the chance, with cities constructing out bike infrastructure, and offering assist for e-bike purchases such because the tax credit score for e-bikes included in the model of the U.S. Build Back Better invoice handed by the House.
But Canada is a giant, sparsely populated nation, leaving many to surprise how sensible bikes are for the distances we routinely journey. A take a look at how Canadians commute reveals that over 20 per cent of journeys are by automobile and beneath 5 kilometres. Including commutes up to 10 kilometres (or up to 25 minutes), bikes grow to be an possibility for changing automobile journeys for over one-third of commutes, demonstrating the significance of going past a one-size-fits-all mannequin to attain the Canadian goal for emissions discount in the transportation sector.
One of the largest limitations for potential cyclists is the dearth of protected infrastructure to get from level A to B, so investments in energetic transportation will possible have the largest influence on how this chart modifications in 2022 and past.
Women in Alberta energy jobs, or not
Aline Coutinho, postdoctoral fellow, Smart Prosperity Institute @AlineSociology
Alberta’s energy sector has traditionally been male-dominated, but it surely turned extra so after the oil value shock of 2015. Job loss has disproportionately impacted girls in the course of the downturn, and their restoration has occurred at a slower fee in contrast to males. While greater than 9,000 males labored in the sector in 2019 relative to 2010, girls’s employment ranges are nonetheless beneath these seen in 2010.
In 2022, as extra information turns into accessible, we needs to be watching and analyzing how these miserable traits change all through the pandemic, particularly in the context of net-zero carbon transition. We want to higher perceive what elements have been hindering the financial restoration of ladies employees in Albertan energy industries, so we’re higher outfitted to design insurance policies that advance gender-equal financial alternatives.
Climate change hitting crop exports
Tania Chaar, analysis assistant, economics, Export Development Canada
Extreme climate circumstances have been a difficult consequence of climate change for the Canadian agri-food business. During the 2021 rising season, Prairie farmers struggled with one of many worst droughts in Canadian historical past, inflicting crop manufacturing for our high agricultural exports to take a nosedive. Compared to 2020, manufacturing throughout all principal area crops decreased by 29 per cent (this quantities to a bit of over 27-million metric tonnes.) This manufacturing shortfall was extra extreme for crops corresponding to wheat and canola (see Figure 1 above), which have accounted for not less than 50 per cent of Canada’s complete crop exports since 2009 and the place Canada is a high provider the world over.
What does this imply for Canadian agri-food exports in 2022? A fast evaluation of Canada’s previous information reveals that the earlier 12 months’s manufacturing ranges are intently tied to the present 12 months’s exports, as demonstrated in Figure 2. With such a drastic drop in Canada’s manufacturing ranges, subsequent 12 months’s markets that rely on high-quality provide of wheat and canola—corresponding to China and the U.S.—might have to deal with a shortfall, together with probably larger home costs for Canadians. Clearly, the Canadian agricultural sector is already feeling the impacts of climate change. Further occurrences of maximum climate occasions pose a substantial danger to the longer term development of Canada’s agricultural exports.
The curler coaster’s bumps (and shopping for alternatives)
Martin Pelletier, senior portfolio supervisor, Wellington-Altus Private Counsel (@mpelletierCIO)
Commodity costs have been on an actual curler coaster experience with loads of consideration given to the monster rally from final 12 months’s COVID lows. That stated, for some perspective, the index is up solely eight to 10 per cent from its pre-COVID ranges, because it has already began promoting off over 10 per cent from its current October highs over considerations of the Omicron variant.
While there was a lot discuss round whether or not inflation is transitory or not, together with the Fed’s current acknowledgement of upper costs, the actual fact of the matter is commodity costs are nonetheless nicely beneath the place they had been earlier than the monetary disaster and the interval following its restoration. We imagine the Feds know this, and aren’t in a rush to elevate rates of interest, actually not at this stage of the restoration.
As the world returns to a life that’s studying to stay with COVID, shoppers are wanting previous Omicron, regardless of what politicians are saying, as a way to discuss down costs additional. The excellent news is we imagine the present value setting continues to be conducive to supporting the financial restoration. Should the sell-off proceed, we expect one ought to look to add some inflation insurance coverage into their portfolio by including some broader commodity publicity.