The following is a re-print of the February 2026 edition of Shift Storm, the CCPA’s monthly newsletter which focuses on the intersection of work and climate change. Click here to subscribe to Shift Storm and get the latest updates straight to your inbox as soon as they come out.
Electric vehicles are the “cars of the future” according to Canada’s new automotive strategy, which aspires to increase EV adoption, increase EV production and reduce passenger vehicle emissions in one transformative swoop.
On paper, it is a win-win-win proposition for consumers, auto workers and the climate. But the more I think about it, the less certain I am that any Canadian electric vehicle policy can truly check all three boxes.
The best approach for consumers and the climate would be to open the floodgates to foreign-made EVs, mainly from China, that are cheaper than anything built in North America. That would help us hit EV sales targets and displace internal combustion engines, but it would decimate the domestic auto industry and all of the associated jobs and investment.
The best approach for auto workers and the climate would be to invest significant public money in the domestic EV supply chain, regulate sales of internal combustion engines, and maintain tariff barriers on foreign competition. It would protect domestic workers and facilitate a managed transition toward an electrified fleet, but it would drive up vehicle prices for consumers.
The best approach for workers and consumers—in the short term, at least—would be to drop climate-related regulations altogether, allowing industry to focus on producing the lowest-cost vehicles for the domestic market. By aligning with the current U.S. administration on this front, it may also offer a path toward normalizing trade relations. But this approach would largely doom our efforts at transport electrification, including the longer term affordability benefits.
(These are all terrible oversimplifications, but bear with me.)
What does the new auto strategy achieve? In an effort to balance these competing priorities, it comes up short on all three.
For consumers, the promise of a few thousands Chinese EVs at some point in the next five years, as well as the return of limited purchase incentives that will be phased out over the same period, will not make EVs significantly more cost competitive. It’s worth emphasizing that last year’s cancellation of the consumer carbon price amounted to a bigger incentive for gas cars than the government is now offering for EVs.
For workers, the strategy amounts to a temporary reprieve with no guarantee of long-term investment in the sector. Few EVs are actually built in Canada, and, without tariff-free access to the U.S. market, no foreign auto company is going to make new investments on that front. Our domestic market is simply too small to justify new plants, and 90 per cent of the vehicles we make are sold south of the border.
Finally, from a climate perspective, the replacement of the electric vehicle sales mandate with yet-to-be-determined pollution standards is a significant blow. Whereas the prior mandate guaranteed reduced sales of internal combustion engines and thus reduced emissions over time, these new targets are merely aspirational—an approach to climate policy that has failed time and time again. We may put more EVs on the road, but that alone will not reduce emissions from the transportation sector.
In terms of EV policy, there is no perfect solution here. Despite our economic dependence on auto manufacturing, the “Canadian” auto industry is, by and large, a foreign auto industry with plants in Canada. That severely limits our industrial flexibility. Even as the rest of the world shifts aggressively toward EVs, we are ultimately chained to the U.S. auto market and, to a lesser extent, the U.S. auto industry, which is currently backsliding on its EV ambitions.
For Canada, it may be more productive to think about the role EVs play in the context of our broader transportation system. From a consumer, worker and climate perspective, we are likely better served by shifting away from personal vehicles as much as possible. Public investment in transit and active transportation is far more economically efficient, better for the environment and offers greater well-being benefits than the same investment in propping up EV sales. But that’s a discussion for another newsletter…
As we celebrate three years of the Shift Storm newsletter, I want to thank you for reading along and sending such great feedback on each issue. Now let’s get into this month’s research.
Storm surge: this month’s key reads
The costs of climate change are rising, but it’s the tipping points we should be worried about
A handful of new studies highlight the damage that climate change is already causing and how much worse—and how much more unpredictable—it is likely to get in the absence of climate change mitigation and adaptation efforts.
Researchers from the Institute for Catastrophic Loss Reduction published Societal Loss from Historic Natural Catastrophes in Canada, which finds that disaster-related costs have risen by nine per cent per year over the past several decades—far faster than the economy overall. The study does not explicitly attribute the increase to climate change, but it does warn about our current unsustainable trajectory. At this rate, by mid-century, it will take our construction sector two months out of every year just to address the losses from the previous year.
Although disasters are the most obvious impact of climate change, they are hardly the only ones. A new study published in Science Advances finds that wildfire smoke caused 24,000 premature deaths per year in the U.S. from 2006 to 2020. The comparable figure for Canada is about 1,400 deaths per year. As this newsletter has previously discussed, smoke from Canadian wildfires has been linked to tens of thousands of deaths around the world in the past few years alone.
In addition, in Prepare or Repair, the Canadian Climate Institute calculates that we are already spending $9 billion more per year to maintain public infrastructure (roads, bridges, wastewater systems, etc.) than we would be in the absence of human-caused climate change. That figure is slated to rise to $14 billion per year by mid century, as more heat and more rain causes materials to break down faster. The good news is that most of those future costs can be avoided with proactive investments in climate resilient infrastructure, but it will take $3 billion per year up front—a sensible investment but not one that many Canadian governments are entertaining.
However, as researchers at the University of Exeter point out in an important new report, Recalibrating Climate Risk, all of these figures may be missing the point. Climate damages are often treated as marginal shocks, in economics speak, which means they are viewed as external forces that can be absorbed by an economy. However, as global temperatures march ever upward, climate-related disasters are increasingly tipping over into structural shocks, which are so large they can stop an economy from functioning as usual. For example, a few washed out roads merely adds to the overall cost of road maintenance, but when a whole town floods it disrupts so many systems at once that the economic costs spiral well beyond the direct damages.
Climate scientists often talk about physical tipping points, which are well-summarized in a recent article in the journal One Earth. The collapse of major ice sheets, for example, would have sudden and transformative effects on the global climate that are not reflected in the smooth curves of forecast models. But climate policy advocates don’t often talk about economic tipping points. At the policy level, we are not preparing for climate impacts that cause entire economic systems to collapse at once, raising the costs exponentially.
Research radar: the latest developments in work and climate
Canada’s first official just transition plan is here, and it’s no plan at all. The federal government quietly tabled the 2026-2030 Sustainable Jobs Action Plan this week, which is supposed to be the official strategy for advancing a worker-first climate agenda. I’ll need some more time to dig through it, but, at a glance, it amounts to a glorified press release for the government’s energy agenda with no new policies or targets to support workers or advance climate action. A big miss.
Canadian climate policy is falling further and further behind… Canada was never on track to hit any of its climate targets, but a new analysis from the Canadian Climate Institute finds that Canada is even further away from its targets than two years ago. Despite assurances to the contrary, the federal government’s systematic dismantling of Canadian climate policy over the past year has come at a measurable cost. As CCI points out, Canada’s climate success now hinges almost entirely on the negotiation of stronger industrial carbon pricing between Alberta and the feds—a precarious situation where any “compromise” will almost certainly result in even weaker climate policy.
…and the federal government knows it. Documents obtained by DeSmog reveal that the federal government was well aware of the speculative nature of the Pathways carbon capture project even as it made the project central to its climate plans. Carbon capture is and has always been a fig leaf—offering plausible deniability on the climate front as the government works with the oil industry to increase production for export.
There are better nation-building projects than mines and pipelines. The federal government is in a nation-building mood, but the conversation has largely been hijacked by the extractive sector. In Connecting the Dots, Clean Energy Canada presents a different perspective. The report identifies four sectors—electricity transmission, mineral refining, EV charging and modular housing—that fit the nation-building mould but would set Canada up for longer-term success in a cleaner global economy. Unlike raw extraction, these are value-added industries that have the added benefit of improving affordability, reducing emissions and making the rest of the economy work better.
Parliament calls a spade a spade, but will the government act? After two years of study, the Liberal-chaired Parliamentary environment committee published Impacts of Canada’s Financial System Related to the Environment and Climate Change, which makes several very strong recommendations. In particular, the report hammers on the problem of greenwashing and the need to regulate the claims of the fossil fuel industry (and its financial backers). It is also explicit that support for fossil fuels of all kinds—including natural gas—should not be included in any definition of sustainable finance. It remains to be seen whether the federal government actually follows through in its final sustainable finance guidelines, which are still under development.
LNG development is a massive financial gamble, with the climate at stake. The Institute for Energy Economics and Financial Analysis has released the North American LNG Export Tracker, which is a useful resource for folks on the liquefied natural gas file. A key theme in the analysis is the tenuous economics of LNG in Canada. The rush to build new facilities has driven up construction costs even as forecast demand (and prices) have moderated. It’s a conclusion echoed in another new report, The LNG Casino, published by Investors for Paris Compliance. For its part, the BC government remains pollyannaish about LNG and doubled down on the sector in its recent budget.
The publicly-subsidized TMX pipeline is still losing money. Some excellent reporting in the Tyee reveals that the sudden profitability of the Trans Mountain Expansion pipeline is the result of an accounting trick to hide its debt. In fact, TMX has always been a money loser as the publicly-owned pipeline subsidizes the private companies shipping their oil to the west coast.
Canada is missing out on cheap solar power at our own peril. What types of energy should Canada be investing in instead of LNG and oil? As the venerable Peter Nicholson argues in a new article published by the Johnson Shoyama Graduate School of Public Policy, Canada has systematically underestimated the value of solar power, which is quickly becoming the dominant source of global electricity. The economics of solar power with battery backups are so good now, in fact, that solar is still the cheapest option for new power even during Canadian winters. A solar-only grid is not, on its own, sufficient during the darkest months, but when complemented with wind and pumped hydro it can meet the majority of our future power needs.
Fossil fuel companies are suing countries over climate action. For decades, the CCPA has been warning about the dangers of the investor-state dispute settlement (ISDS) system included in many free trade and investment agreements. A new report from Climate Action Network Europe, ISDS vs. The Climate, takes up the mantle, illustrating how ISDS allows fossil fuel companies to sue governments for billions of dollars in damages for attempting to constrain coal, oil and gas production. The system is especially stacked against developing countries, and presents a huge obstacle to effective global climate action.
Scotland dragged its feet on just transition policies, and now Aberdeen is paying the price. In its final report, No Time to Lose, Scotland’s Just Transition Commission offers a dire assessment of just transition efforts in the country. The key takeaway, which I’ve been yelling about from the rooftops for many years, is that reactive transition efforts are doomed to fail. To succeed, planning must be proactive, which means new economic opportunities must be created before old ones disappear. Scotland’s oil and gas heartland is learning that lesson the hard way, but it’s not too late for Canada’s oil and gas regions to take the initiative.
Canada’s best climate podcast continues to drive the conversation. This is your periodic reminder that the Energy vs. Climate podcast offers the deepest and most nuanced discussions about energy policy in Canada and is well worth a listen. I don’t always agree with their takes, but I always learn something new. Their recent episode on Alberta’s energy transition was excellent. And while we’re making recommendations, friend-of-the-newsletter Seth Klein has started a newsletter of his own, Emergency Measures, that’s worth checking out.
Dark clouds: artificial intelligence on the horizon
Federal AI consultation puts cart before the horse. The federal government released Engagements on Canada’s next AI Strategy, which summarizes the results of last fall’s rushed AI consultation. Ironically, the government used AI tools to analyze public submissions—presupposing the utility and safety of these systems before considering the results of the consultation. It’s a bad omen, as Blair Attard-Frost argues in BetaKit, and not likely to improve Canadians’ low levels of trust in AI systems or companies. On a more hopeful note, a group of civil society organizations has launched a People’s Consultation on AI, which is an attempt to create a more thoughtful public discussion around the role of AI in Canada. Submissions are open until March 15.
Big data centres are coming to Canada and communities need to prepare. As we discussed last month, 2026 is likely going to be the year that the great data centre build-out spills into Canada. What does that mean for Canadian communities? My colleagues Simon Enoch and Rachel Pettigrew have written a helpful primer, “So you’re getting a data centre! Here’s what to know,” that unpacks the major issues.
AI as a climate solution is a bait-and-switch. Some AI proponents argue that the technology holds the potential to solve climate change and other environmental challenges, but a new report, The AI Climate Hoax, published by a coalition of international NGOs, throws cold water on the idea. The crux of the issue is that the kinds of AI that can help with, for example, climate modeling and energy efficiency (i.e., machine learning) are not the same kinds of AI that are driving the current wave of investment and energy consumption (i.e., generative AI). Whenever I hear that a new technology will solve climate change, I feel obligated to point out that we’ve already had the technologies we need for several decades. Technology is not the sticking point.Pro-worker AI is possible, but not if Big Tech gets its way. Three superstar economists, Daron Acemoglu, David Autor and Simon Johnson, have co-authored Building pro-worker AI, a deep and insightful report that makes a simple argument: AI can either be used to replace workers or it can be used to help workers—and we should choose the latter. It probably goes without saying that the current direction of AI development and deployment is not aligned with this pro-worker vision, but the report offers a wide range of recommendations for moving the needle, including more aggressive antitrust actions.
