Thank you very much, Ms. Chair.
Thank you to the standing committee for the humbling invitation to testify.
I'm speaking today in my role as lead of the Oxford University economic recovery project here at the Smith School of Enterprise and the Environment in Oxford.
Put simply, periods of economic downturn like we've just seen are the most poignant opportunities for economic rebirth. It's at these moments that governments have the greatest licence, and indeed the greatest imperative, to intervene in their market systems. Right now we have an opportunity to reshape the future of our countries to grow more and to do so equitably and sustainably.
The question is, in recovery, will we prioritize the industries of the past, those that are clearly on the decline and where we are losing competitiveness, or the industries of the future in which we can build long-term competitive advantage and enduring prosperity?
Our work at Oxford has considered primarily the economic characteristics of different policy options available to governments in response to the COVID-19 pandemic. On this basis, we advise leaders of nations, development agencies and businesses around the world.
In short, we found that policies that support a transition to a clean, more equitable, and often more digitalized, society can also provide higher short-term economic gains. By spending on green initiatives, we can create more jobs and induce greater economic growth in the short term while also driving long-term prosperity.
In May of 2020, I looked deeper into green investment with Oxford's Professor Cameron Hepburn, Nobel Prize winner Professor Joseph Stiglitz, eminent economist Professor Lord Nicholas Stern and Dimitri Zenghelis.
In our paper we surveyed over 230 leading economists representing central banks, finance ministries and the epitome of academia to understand what types of fiscal responses to the pandemic had the highest potential to boost the economy. The study found that there are industries that have both high economic growth multipliers and high positive climate impacts. Leading investment options included support for clean energy, green building efficiency retrofits, natural capital, clean research and development, and vitally, green worker retraining initiatives, which is an area I'd encourage questions on.
Subsequently we've been tracking how governments are spending and engaging on that, trying to understand the social, economic and environmental components of their spending. This is in partnership with the IMF, UNDP, UNEP, PAGE and the German Agency for International Cooperation. All of this is under the title of the “Global Recovery Observatory”, which you can find quite easily online.
In the Global Recovery Observatory, you'll see Canada compared with the world. In total we tally around $29 billion in COVID-related green spending in Canada, which is an encouraging number and does show some commendable foresight on the part of the government. However, this remains far below international commitments. For example, in 2020 alone, we saw almost $60 billion in France, over $40 billion in the U.K. and, of course, Canada's neighbour to the south looks to be stepping up the game substantially, moving into the hundreds of billions, if not towards the trillion mark, in green spending.
Canada has also unfortunately announced some of the few dirty policies in the world. By “dirty” I mean climate negative, which is a poor mark on the country's record. Given the context of the economic advantages of green spending I described, they are a little bit difficult to understand.
Today, as an engineer turned acting economist, I've framed my evidence on economic grounds, yet any responsible parliamentarian also understands that future prosperity is about more than economics. Future prosperity is built on innovation, good jobs and growth, but also on a cohesive society with a stable climate and healthy ecosystems and landscapes.
Here, too, the overwhelming weight of academic evidence is positive for green investment. In short, targeted and well-designed policy can reduce inequalities while also pulling the handbrake on climate change.
In my final 30 seconds, I have one final appeal. Canada needs to again look beyond its own borders as well, reclaiming a position of leadership in support of the world's most vulnerable nations. The gap between the most developed countries like Canada and the least developed countries who we engage with was enormous prior to COVID-19 and is only growing.
In response to the virus, we've seen over $12,000 spent per person in developed nations. In the least developed countries, it's $10 per person. There's an opportunity to pair climate spending with development assistance, and I encourage Canada to take a leading role in that.
Thank you.