Good morning. Thank you for inviting me here today. I'm the chief operating officer of the Canadian Shareholder Association for Research and Education.
For 25 years, SHARE's mandate has been to support institutional investors in addressing the full range of risks and opportunities in modern capital markets, including by working with many of Canada's largest institutional investors in strengthening public market regulations and helping engage with corporate boards and management as shareholders.
Asset owners and managers are ready to invest in the low-carbon economy of Canada's future, but delay, uncertainty and inconsistency are some of the biggest barriers to producing good jobs for Canadians, building a world-leading economy and protecting our environment.
Today I want to address three conditions necessary to unlocking investment in the low-carbon economy and securing our Canadian competitive advantage. The first one is about consistent regulation; the second is around critical infrastructure, and third is clarity on industrial carbon pricing.
To begin, we need a regulatory system that sets and enforces sustainability disclosure standards consistently. This is not an appeal for excessive regulation. In fact, it's quite the contrary. It's an appeal for rules that help investors and investing companies manage data flows so they're focused on what really matters. Internationally, we're finally seeing convergence on sustainability reporting standards, and we cannot afford to be left behind. The transition taxonomy is fundamental to aligning with international standards, and we hope that it will be supported in its future development and oversight.
The effort to include climate data disclosures in our security regulations is critical as well.
We also need to make sure that disclosures are happening across the private market systems to encourage a level playing field. Efficient private markets require accurate data, and if we're building models based on only public market data, they will be estimates at best. That uncertainty may discourage investment where it's needed the most, so we urge the committee to study the Canadian private market system more closely, and we support the recent proposed changes to the CBCA.
Second, we need to build the infrastructure to enable growth and investment. For example, global businesses are considering the availability of reliable and clean electricity in their setting positions. The new VW battery plant to be built in St. Thomas, Ontario, was won partly because of promises of the availability of 100% green energy and commitments to deliver that energy directly to the new plant. The VW deal shows that Canada can be a powerhouse in low-carbon manufacturing, but we will still have considerable work to do to deliver a green electricity grid all across the country.
What will it take to drive investment into the clean energy production, storage and distribution infrastructure? The tax credit regime is critical, including for related components manufacturing, and so are working to develop a workforce development strategy to support the clean energy industry, supporting partnerships with indigenous communities, and improving interprovincial co-operation and an efficient regulatory process.
Another example where we should be excelling and attracting capital is in developing critical minerals—the necessary components for battery storage, solar panels and electrification—but there is a financing gap in the industry. High capital costs and low payback periods are two of the significant barriers to investment. A lack of clarity around indigenous rights and title and delays in permitting and regulatory review processes are also significant project-related barriers. Governmental support is needed to address these identified barriers and to grow our competitive advantage.
Finally, we need clarity on industrial carbon pricing. Whatever one may think about the consumer price, the industrial price plays an outsized role for both emissions reductions and investment decisions. Promoting certainty in the continuance of the pricing system and in pricing schedules beyond 2030 will help to set investment and credit values for new projects and enterprises and spur investor confidence here in Canada. We need a lot more final investment decisions being made in Canada's favour.
In each of these three areas, I can't emphasize enough the importance of acting early, decisively, clearly and consistently. Our economy is changing now, whether we like it or not, due to technological change, innovation, market forces and geopolitics. Our financial system, including the regulatory and policy environment that facilitates it, needs to help deliver smooth flows of capital into the hands of businesses that can take advantage of those changes, deliver new jobs here at home and build the economy of the future.
Thanks very much, and I look forward to taking some questions.