6 Low-carbon and Resilient Infrastructure Investment

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Investments in low-carbon and resilient infrastructure are critical for transitioning to a clean, prosperous, and resilient 2050.1 The long life of infrastructure makes it important to make investment decisions today that maximize future expected returns across climate, economic, societal, and environmental objectives (GCEC, 2014; 2015). Tracking investment data can help governments understand where public and private investments are going, analyze benefits generated, and determine whether investments are supporting low-carbon and resilient growth objectives.

Headline Indicator #6: Public & Private Investment in Climate-related Infrastructure 

To measure climate-related infrastructure, we use the flow of annual public and private investments in select categories in 2009 and 2019, illustrated in Figure 6.1. For clean growth success, we want to see investments increase and become lower-carbon and more resilient over time.

Overall, the level and composition of investment within each category changed significantly between 2009 and 2019, with the total level of investment increasing in six of the 11 categories. Investments in hydroelectric production, power transmission, and power distribution experienced the largest growth over the 11-year period and also attracted the highest levels of investment in absolute terms, driven primarily by the public sector (Statistics Canada, 2020). Big hydroelectric projects, such as the Site C Dam in British Columbia and the Muskrat Falls Dam in Newfoundland and Labrador, were likely large contributing factors to these trends.

Investments in pollution abatement and control were another area of significant growth. Although starting from a much smaller base relative to investments in the electricity system, spending on pollution and abatement increased 23-fold between 2009 and 2019. The bulk of this spending was in the private sector, where investments grew from $12 million in 2009 to $413 million in 2019, reflecting a shift to comply with broader and more stringent environmental policies across the country. 

Notably, total investments in wind and solar decreased 78 per cent between 2009 and 2019 after reaching a peak of nearly $2.7 billion in 2013. And while the majority of investment in wind and solar came from the private sector between 2009 and 2015, the public sector was the dominant investor between 2016 and 2019. Ontario’s feed-in-tariff program for renewables (which ran from 2009 to 2017) was a major driver of private investment in renewables in Canada (Oji & Weber, 2017; NRCan, 2020), and its cancellation likely played a role in the notable decline in new investment.

  1. We define infrastructure as any basic physical system that is essential for the economy and society to function. It includes engineered infrastructure (e.g., buildings, transportation systems, communication networks, water, wastewater, electricity systems, heating systems) and natural or “green” infrastructure (e.g., wetlands, forests, estuaries, lakes, etc.). Infrastructure assets are generally long-lived and can be capital intensive to build.
  2. According to Statistics Canada, investments in CCUS technologies should be counted under “Pollution Abatement” in Figures 6.1 and 6.2. However, in some cases, these infrastructure investments might get counted in the oil and gas infrastructure category.