Skip to main content
opinion
Open this photo in gallery:

An electric car gets charged at parking lot in Tsawwassen, near Vancouver in 2018.JONATHAN HAYWARD/The Canadian Press

In the 2000s, as Germany sought a steady flow of cheap and reliable energy, it yoked itself to Russia natural gas. It seemed like a good bargain at the time, but since Russia’s invasion of Ukraine, Germany and other European countries have had no choice but to scramble to find new supplies and suppliers. It will take Germany several years to wean itself off Russian gas; until then, Vladimir Putin’s finger will be on the pipe. Electricity prices today are at record highs, with gas eight times more expensive than in Ontario.

The pact between Germany and Russia was standard in recent decades. Globalization was rolling, and the possibility that a major trade partner might launch a land war in Europe, or use energy as a tool of blackmail in support of that war, was dismissed.

Which brings us to a possible future dependency – in green energy. China controls roughly two-thirds of the world’s lithium refining, an integral ingredient in batteries – and thus electrical vehicles. It also manufactures three-quarters of the world’s solar panels.

This isn’t exactly the same as the Russia-Germany gas situation. Europe needs daily shipments of gas; being cut off from EV batteries or solar panels won’t upend Western economies, today or tomorrow. But the West, including Canada, must not allow itself to become dependent on a China-dominated supply chain in green energy, which in a few decades could be what oil and gas are today.

Avoiding a dangerous dependence has become central to policymaking in Washington. To counter China, industrial development is being backed by billions of dollars, pledged through a series of recent bills passed by Congress. The latest and biggest is the landmark Inflation Reduction Act, whose title belies its mission: it’s mostly about reducing pollution rather than inflation. The goal is to cut emissions by 40 per cent by 2030, in part by launching a wave of American green industry. It takes direct aim at China, as the bill makes solar and EVs central to its US$370-billion package of public dollars.

In the bill, there’s a big win for Canada, one that looked like it was going to be a big loss. An earlier version of the bill had an EV subsidy conditional on “Buy American.” The final version has subsidies for EVs built in North America, which should be a boon for Canada’s Ontario-centred auto industry. In its Throne Speech last week, the province’s Progressive Conservative government trumpeted the potential to be a leader in EVs and cited $16-billion of public-aided private investments over the past two years.

Ontario’s Throne Speech also talked of a bright future for critical minerals, such as lithium, describing it as “unprecedented” potential – but so far, there are no major investments. Canada was once a world-leading mining country, and the TSX remains a world-leading mining exchange, yet Canada’s green-energy mining industry it is still nascent, and struggling.

There is only one lithium mine in Canada, in Manitoba – and it’s owned by a Chinese company, which ships the output to China. Why? A recent Globe and Mail feature laid out the reasons, and there’s enough blame to go around: the domestic mining industry, reluctant financiers on Bay Street, and governments, including Ottawa. When that one lithium mine (then still in development) was up for sale three years ago, only Chinese money knocked on the door. It was a mistake for Ottawa to let the purchase go through – the deal could have been blocked, and likely would be today – but where were the Canadian, American or European investors?

Now, everyone’s alert. The Trudeau government in its budget in April promised $3.8-billion over eight years for Canada’s first critical minerals strategy. Ontario put out its own plan in March.

One should always be wary of industrial strategies. But in green energy, both the U.S. and China have them, and believe that they must. And, back in the 1970s, it was Canadian government tax breaks and investments that helped propel development of the oil sands.

But if Canada is to become leader in the green economy, industry ultimately has to get the job done. And the industry at the base of most sources of green energy is traditional, old-school mining. It all about finding, mining and processing certain key minerals.

Digging wealth out of the ground has long been a Canadian specialty. It has a bright future.

Keep your Opinions sharp and informed. Get the Opinion newsletter. Sign up today.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe