The Loonie is tumbling and Canadian bonds rallying as the Bank of Canada backs away from its rate hiking plans in ‘surprise’ over the slowing Canadian economy.
Meanwhile, a new report from the National Energy Board brings good news for the planet (that is bad for Canadian GDP in the short and medium run). See: Canada’s demand for fossil fuels will max out in 2 years: NEB
The National Energy Board says Canada’s addiction to fossil fuels will peak in two years…The board’s annual energy futures report for the first time says with climate change policies and growth in clean energy, Canada’s consumption of fossil fuels to run cars and heat homes will max out before 2020, start to decline slightly and then flatline over the next two decades. Here is a direct video link.
At the same time, the NEB says it thinks (hopes) that falling domestic oil demand will be offset by increasing oil exports, and thus not hurt Canadian GDP. This is unlikely.
In reality, it’s not just domestic demand that will peak much sooner than previously estimated. The trend towards higher efficiency, renewable energy, and electric transportation, is global and only just getting started. In addition, new oil production technologies are enabling increased supply in most countries, including our historical oil export buyers.
Canada and other countries need to transition to products and services needed for the next phase of human evolution. We can, but to do so we will have to let go of status quo thinking and a fixation with sunk costs and antiquated business models.
This day was always coming, but unfortunately, Canada is woefully unprepared for the drop in income and the capital investment intensification needed.