Global uncertainty means Canada must rise, compete in new ‘friendshoring’ era

Ottawa is looking to capitalize on a new era of "friendshoring" among democratic nations with a new suite of clean technology incentives designed to try to keep Canada competitive

The federal government is looking to capitalize on a new era of “friendshoring” among democratic nations with a new suite of clean technology and natural resources investment incentives designed to try to keep Canada competitive in an increasingly green-focused global economy.

In the fall economic statement Thursday, Finance Minister Chrystia Freeland, who is also the country’s deputy prime minister, says the world’s economy is at a “turning point,” and that Canada can be poised to benefit from this shift with its rich cache of resources that are in high global demand.

“We are entering an era of friendshoring — a time when our democratic partners and their most important companies are looking to shift their dependence from dictatorships to democracies,” Freeland said in a prepared copy of her speech in the House of Commons.

“We have the natural resources to power the global net-zero transition and to support our allies with their energy security as that transition continues to pick up speed.”

Global economic tensions and a push among democratic countries toward net-zero economies underpin many of the new initiatives outlined in the Trudeau government’s fall economic statement.

The document outlines how record-high inflation and interest rates are slowing economic growth, but also how global forces such as Russia’s war with Ukraine and supply chain woes have also been wreaking havoc with efforts to stabilize the cost of living for Canadians.

Canada is not the only country grappling with these volatile global market conditions, but it can stand to benefit from countries and private sector companies looking to invest in green technology and clean energy solutions as they look to prioritize trade and investment with countries that share their values, Freeland said in her prepared remarks.

But the United States’ Inflation Reduction Act also appears to have played a role in spurring Canadian efforts to better keep up with the U.S. on clean energy investments and incentives.