Implementing a net-zero by 2050 plan entails a significant transition

How much?

The Canadian Federal Government, in its 2022 Budget, outlined the financial commitments needed to achieve Net Zero emissions by 2050. The estimated expenditures totaled approximately $3.9 trillion over 28 years or 9.4x the total federal tax revenue for 2022. There were 15.3 million Canadian households paying an average of $48,199 in tax. To spend the $254,901 per household would require allocating 33% of 2022's revenue, which being unfeasible, had actual spending closer to 6% thus further amplifying future requirements. The current spending still would equate to 2x the total 2022 tax revenue over those same 28 years. Let's be clear, this issue is diverting a lot of resources from the top concerns like health care, education and infrastructure.

Housing and Living Costs

The noble quest for a greener future means energy efficiency requirements for both new and existing buildings becoming more stringent. This shift toward increased regulation creates artificial restrictions which trigger a significant increase in housing costs.

This means retrofitting of older homes as well as imposing more limits on new builds.The equipment and labor involved in these upgrades will be expensive and substantially increase the cost of housing.

The financial burden of these renovations and upgrades is on both homeowners and renters. The renters, many of whom are still establishing themselves in their careers or managing young families will find these additional costs challenging.

We should all be concerned by how these increased cost burdens are exacerbating existing issues related to affordable housing and cost of living for our most vulnerable.

Employment Shifts

There will be a significant shift in the employment landscape as industries adapt to the net-zero goal. Most sectors must shrink, leading to job losses in these areas. While new opportunities will no doubt arise, there will still be a mismatch in skills, requiring workers to retrain or upskill.

This retraining will require large investments and likely create periods of unemployment or underemployment during the transition.

We should all be concerned by how these increased cost burdens our collective employment anxiety.

Transportation

The impending transition to a significantly lower carbon footprint will demand sweeping changes from reliance on fuel-powered transportation to the adoption of electric vehicles (EVs), more hydrogen or propane powered vehicles and enhanced public transit systems.

This shift, while potentially offering long-term cost savings (including if battery technology can sufficiently stay usable in low climates such as in Canada in terms of range and not needing to resort to using lots of its charge for battery heating purposes), presents a potential financial burden in the short term.

The initial investment required to purchase EVs can be substantial. Additionally, there are potential increases in the cost of public transit fares, which may be necessary to cover the costs associated with expanding and upgrading the services to accommodate a higher volume of users.

We should all be concerned by how these increased cost burdens mean short-term subsidies, low-interest loans, public transit and financial assistance is spent on a potential environmental impact rather than providing real-world lifestyle improvements for those in most need.

Investment and Savings

The transition to a net-zero will have a profound impact on investment portfolios across the globe. As we embark on the path towards significant change, we expect increased volatility in the stock market.

This is due to industries, whether they be large-scale manufacturing or small local businesses, adjusting and adapting to the new and very expensive market realities, laws, policies and taxes.

This dynamic shift in the market will affect the savings and retirement plans of future generations, diligently working and contributing to these future plans and social security funds.

We should all be concerned by how this increased volatility will undoubtedly bring future challenges such risking our social security net and concept of retirement

Final Note

In analysing the demographic implications, we see that Canadians in their prime working years, are likely to bear a significant portion of these costs, including increased taxes, lower living standards and growing social issues.

Before we continue down this zealous quest to uproot our proven economic model. We encourage you to join us in taking the time to listen to skeptics, examine who is driving this movement, their motivations and incentives. Recognize we still have the power to change course and have both a greener world and an economy that aims to benefit every Canadian.