Climate action is often associated with groundbreaking technologies, new data, and fresh approaches. But what if the next big climate innovation isn’t something new—but something we already have, simply seen through a different lens?
Ear tag on dairy cow for identification and data collection
Dairy barn in southwestern, Ontario
As Climate Action 2025 highlights, this year has brought turbulence for climate priorities, as trade and geopolitical tensions, particularly with the U.S., dominate attention. With climate action slipping down the priority list, industries must pivot—embedding sustainability into core business strategies, not as an add-on, but as a driver of efficiency, resilience, and growth.
With shifting priorities competing for resources and investments, innovation found right under your nose may hold the key to unlocking new market ready opportunities. Semex, a leading genetics company based in Guelph, Ontario shows us how.
Methane emissions from cattle—driven by enteric fermentation, a natural digestion process— is the largest source of GHG emissions in agriculture and among the toughest to abate. What if the key to reducing them was ready and waiting to be unlocked?
Semex offers animal semen, embryos, breeding services, and software to farmers in more than 80 countries. The company recently identified a genetic trait that farmers can now select to reduce their herds’ methane by 2 to 3% each generation, with permanent reductions of methane emissions estimated to be 20 to 30% by 2050.
The key to bringing this discovery to market wasn’t a brand-new technology—it was a new way of looking at existing industry data. Semex leveraged a national milk database managed by Lactanet, who collects data using mid-infrared (MIR) spectroscopy for milk quality and herd performance. By analyzing this data through a climate lens, researchers uncovered a striking insight: MIR datasets could also be used to predict and influence methane emissions. This existing dataset was the resource needed to unlock insights on methane production by cattle as novel and direct measurement approaches in the barn for methane are still too costly to scale.
Thanks to existing big data and collaboration, Semex was able to bring the methane efficiency trait to market.
This case study highlights a vital lesson: climate innovation doesn’t always require new tools—sometimes, it’s about looking at what we already have through a new lens. Businesses that embrace this mindset can unlock new efficiencies, market advantages, and climate solutions without reinventing the wheel.
For more on policies, people and companies driving climate action in the agriculture sector, visit the sector analysis of our flagship report here.
As the world races to secure the critical minerals essential to a modern economy, Canada has a crucial decision to make: what role can it play in de-risking a critical mineral supply chain that is overwhelmingly dominated by China?
At PDAC 2025, this question is top of mind for industry leaders, policymakers, and global investors. Building on our Getting Critical on Critical Minerals briefing, we’re diving deeper into five minerals increasingly vital to the economy of the future.
Each of these minerals are vital inputs across five key focus areas: artificial intelligence, border security, healthcare, energy and defense. But supply chains are vulnerable, international competition is fierce, and Canada must navigate complex policy, investment, and processing challenges to establish itself as a global leader.
Explore the briefings:
1. Gallium: the most critical of critical minerals. Key Focus: Artificial Intelligence
Every year, Toronto plays host to the world’s biggest mining conference, as the Prospectors and Developers Association of Canada brings together more than 27,000 global mining executives, investors and policy makers. And this year’s conference, running from March 2-5, is more critical than ever. Critical minerals will be centre stage, given their importance to the growing geopolitical race between the United States and China. They may not be the mainstay of mining but minerals like gallium and lithium are essential inputs in advanced technologies that span energy, defense, manufacturing and increasingly, artificial intelligence. Nations with secure access to these critical minerals will secure global economic competitiveness and national security. Here are three big questions we’ll be tracking at PDAC ‘25:
1. What’s with all the critical mineral hype?
From advanced semiconductors used in AI to the manufacturing of electric vehicles and batteries to technological advancements in defense and aerospace, critical minerals underlie the critical components of the Fourth Industrial Revolution – an era of disruptive technological forces driven by increased human-machine interaction. Today, China dominates the entire critical mineral value chain, from mining to refining/processing to end-use demand. The International Energy Agency has identified six core critical minerals (copper, lithium ,nickel, cobalt, graphite and rare earth elements) — and on average, China accounts for two-thirds of global refining capacity for the group. In contrast, the U.S. has limited domestic reserves of critical minerals and is entirely import-reliant on supply – often times from China itself. This battle for global tech supremacy between China and the U.S. is manifesting a critical mineral resource war, a new great game for the 21st century rivaling the geopolitical significance of oil post Second World War.
2. What role can Canada play in securing critical mineral supply chains?
Canada and the U.S. have an established minerals and metals trading relationship, as each other’s largest trading partner. In 2024, Canadian non-fuel mineral imports amounted to US$40 billion, or 24% of total U.S. imports. The country is also the largest source of U.S. critical mineral imports by dollar value, but largely skewed by ‘commercial’ critical minerals imports such as aluminum, nickel and zinc. Increasingly, there is a growing cohort of less commercial yet strategically important niche critical minerals with vital importance in defense applications, border security and advanced chip making. The supply of these minerals, such as gallium, germanium, antimony and tungsten, are dominated by China and are subject to Chinese export controls. It is across this subset of minerals particularly where we believe Canada can play a vital role in in de-risking U.S. and G7 critical mineral supply chains.
3. What can we expect to hear at the conference?
This year’s PDAC conference will have a greater-than-usual policy bent, given the increased tensions around U.S. critical mineral supply – already witnessed in Ukraine peace talks but also seen in President Trump’s commentary around Greenland and Canada. Continued rhetoric from policy makers and mining executives on Canada’s potential may expand the belief that Canada has allies and economic partners. We anticipate hearing more on how Canada can enhance its competitiveness in attracting critical mineral capital. This could include a greater role for governments in providing offtake agreements, enhanced fiscal incentives such as expanded investment tax credits, securing market access and streamlining permitting. RBC Thought Leadership will publish a more detailed report on critical minerals later this coming week, along with commentary throughout PDAC. You can follow our research and insights on RBC’s Trade Hub.
Over a quarter of a million EVs rolled onto Canadian roads in 2024 alone. But, as we noted in Climate Acton 2025: A Year For Rewiring, our annual flagship report, this year may test electric vehicle sales in the country amid a phase-out of purchase incentives that had supported the nascent market.
2025 Canadian International AutoShow – Ford 150 EV truck
2025 Canadian International AutoShow – Mercedes Benz EV chargers
2025 Canadian International AutoShow – Toyota Hydrogen Concept Car
The European experience offers a clue: the end of EV subsidies in Germany in 2023 led to a jump in sales ahead of the deadline, followed by a significant 10-15 percentage-point decline in adoption rates over the next 12 months. Similar trends played out across other parts of Europe.
In Canada, the federal incentives program ran out of funding earlier this year ahead of schedule, ending the $5,000 incentive that had motivated buyers to get behind the wheel of an EV. Quebec, in the midst of unwinding its incentives, also paused its program for two months amid high volumes. The question on policymakers and the auto industry’s minds is whether Canadian EV sales can continue to motor along in the absence of incentives. January’s data suggests a drop in EV sales already.
Thanks to subsidies, one in seven cars sold last year was an EV last year. This high watermark can be attributed to buyers rushing to purchase before incentives were phased out. As we wrote in Climate Acton 2025: A Year For Rewiring, nearly 90% of EV sales were aided by federal or provincial subsidies.
Here are the key factors that could impact EV adoption in Canada this year:
1.Incentive phase out. Some car brands continue to replace incentives previously provided by governments to soften the blow to consumers. We believe incentives will remain a critical adoption factor until price parity is achieved with gas-powered cars.
2.Tariffs and trade hurdles. Tariffs tend to raise prices, and EVs are not immune to that despite the presence of some cheaper-priced Asian brands in the segment. Geopolitical uncertainties are also adding to delays to EV production plans in Canada. 3. Range anxiety. Concerns over running out of battery power during trips is among the major deterrents for buyers. But battery ranges have significantly expanded, with EVs tested in cold weather1 boasting an average driving range of 300 kilometres on a single charge. That’s sufficient to meet the weekly work commute for 90% of Canadians.
4. Charging perception. Public charging spots have mushroomed in recent years, with 12,000 locations across the country compared to 10,000 gas stations, though they are mostly concentrated in urban areas. Overall, the EV-charger ratio is at the optimal range of 20-25 EVs per charger2, but the network will need to significantly expand to accommodate EV adoption among those with limited home charging access.
Expanding into global markets comes with challenges, and having the right resources can make all the difference. RBC Global Connect™ is a free online platform designed to support businesses in researching, planning, and navigating international growth. Whether you’re exploring new opportunities or expanding existing operations, our goal is to provide the insights and tools you need to move forward with confidence.
This project explores key drivers of economic growth including productivity, evolving technologies like AI, key sectors including agriculture and trade, and the intersection of skills and immigration. We will explore a new generation of ideas to drive prosperity: case studies and actionable steps needed to navigate the dynamic landscape of economic expansion, and uncover tools that foster growth in our community, business, and country.
U.S. trade tensions have cast a spotlight on Canadian food trade: American tariff threats pose a special challenge to Canadian agriculture and agri-food exports, as they now account for 20% of U.S. agri-food imports.
Exports to the U.S. are growing: Over 60% of Canada’s agriculture and agri-food exports go to the U.S.—and the value of those exports has quadrupled since 2000.
But Canada’s falling behind competitors globally: Canada’s position in global agriculture and agri-food trade has slipped to 7th from 5th place, and could drop to 9th by 2035 if corrective measures aren’t taken.
Rivals are gaining ground in the world’s top growth markets: Emerging competitors like Brazil have gained ground in Africa and the Middle-East, while traditional rivals like Australia are gaining market share in Southeast Asia.
Canada can increase our global share by 30%: With the right investments, Canada can increase global share from 3.7% to 4.8% to regain 5th place in exports, according to new modelling by RBC and the Boston Consulting Group’s Centre for Canada’s Future. That could add $44 billiona to agriculture and agri-food’s export value by 2035.
A clear plan is critical: To regain market share, Canada needs to focus on innovation, investment, export-oriented infrastructure, digital infrastructure, and overseas agri-food promotion.
Canada has become overly reliant on the US for agri-food exports
Steel, autos, lumber and oil: The growing trade conflict between the United States and Canada has focused on the backbone of our blue-collar economy. But check any border crossing, and you’re just as likely to see food and agriculture products—be they lobsters trucked from Nova Scotia to Maine, or muffins from Toronto to Chicago, or cattle from Alberta to Montana.
More than $100 billion worth of agriculture and agri-food products cross the border every year, with the U.S. importing nearly 60% of this trade. And thanks to a surge in agri-food processing investment over the last 20 years, that trade gap is growing. The value of Canadian exports to the U.S. has quadrupled since 2000, and Canada is now the source of 20% of U.S. agriculture and agri-food imports.2
This quiet transformation has helped the Canadian agri-food sector become the country’s largest source of manufacturing revenue. No longer just a bulk commodity producer, we are now a dominant foreign supplier to America’s grocery aisles and dining tables, as Canadian farmers and processors have become more advanced in developing new products and marketing them to Americans.
Take canola, for instance, used for cooking and biofuels and meal for animal feed. Thanks to large crushing facilities, roughly 96% of Canada’s canola oil and 65% of canola meal export volumes went to the U.S. in 2024.4 And then there’s potash, which is key to American fertilizers. Canada supplies 85% of U.S. needs, which could go higher if it pulls back from Russia and Belarus, its only other major suppliers.5
Both countries have benefitted. The U.S. has had priority access to Canada’s production and processing that has a comparative advantage for products including prepared cereals and vegetable oils. Canada’s large production base in the Prairies, as well as the scale and proximity of manufacturing and processing hubs in Ontario and Quebec, have been key to the large inflows of investment capital in recent years. In addition, consistent, high volumes and a lower dollar have propped up Canada’s ability to be a preferred importer. Historical growth in the efficiency of Canadian farms and food processors has further strengthened Canada’s position as a reliable and efficient place to source agriculture and agri-food products from. The result: Canadian food manufacturing has increased its value-add ratio—its production minus its consumption—by 71% between 2014 and 2023.7
These advantages are now in question with the threat of large-scale tariffs. If they’re applied to agriculture and agri-food products, they will make Canada a less desirable trade partner to the U.S., as our position as a low-cost exporter of agriculture and agri-food products relative to others, including China and the Netherlands, will suffer. Agri-food manufacturing may also struggle to maintain investment levels, as one of its biggest selling features has been its preferential access to the world’s largest market.
Such challenges will force Canadian producers to make a choice: accept the cost of tariffs to access the U.S. market, or search for more demand abroad.
Meanwhile, our global competitiveness has slipped
For generations, Canada has been a global leader in agriculture—wheat shipments to China during that country’s post-revolutionary struggles, pork to Japan as its economy took off, lentils to India as it looked to feed its rapidly growing cities, and maple syrup to Europe as it opened its markets. Canadian potash, fertilizer and seeds have also been critical to the ability of the world’s farmers to grow more for their own markets. Thanks to decades of export growth—ahead of most of Canada’s economic sectors—our agriculture and agri-food sector entered the 21st century as a productivity leader. But with so much focus on the U.S. market, many Canadians didn’t realize that the rest of the world was catching up, and in some categories, overtaking us.
Here’s where we stand today on the global leaderboard: over the first quarter of this century, we’ve slipped from 5th to 7th place, bumped by China and Brazil.8 And under a business-as-usual scenario, we could drop to 9th place over the next decade. A global model developed by the Boston Consulting Group’s Centre for Canada’s Future and RBC shows Canada’s market share since 2000 has declined, relatively, by 12%. Our exports are still growing—they’ve quadrupled during that time. It’s just that we’re not keeping pace with the rest of the world, which saw agriculture and agri-food exports grow five-fold over the same period.c d
This relative decline could be an early-warning signal that our agriculture and agri-food exports are not only overly dependent on the U.S., they’re likely to face even greater competition abroad in the decades ahead. Other countries such as Brazil and Chile have taken big bites of markets including meat and fish, where Canada has been competitive in the past.
Ecuador is another case worth studying. It has a highly concentrated inland aquaculture industry, outside the city of Guayaquil, where advancements in shrimp genetics have led to production volume increases of 18-fold since 2000.9 Today, shrimp accounts for roughly 24% of Ecuador’s total exports and 25% of the global crustacean export market, including shrimp and lobster.10 Similar trends can be seen in blueberries from Peru, pasta from Türkiye and soybeans from Paraguay. Such focused, aggressive growth from our competitors has contributed to Canada losing market share in two-thirds of the sectors that make up agriculture and agri-food trade—including meat (-2%), live animals (-5%) and beverages and spirits (-2%). The result for Canada, according to our model: $23 billion in forgone export value in 2023 as a result of market share loss from 2000, which is worth more than the steel and iron Canada exported to the U.S. in 2024.
An important battleground to watch is Southeast and South Asia. India and Southeast Asia‘s global agriculture and food consumption is expected to grow to over 31% of global consumption within the next decade.11 Much of the region has also been a long-time reliable market for Canadian producers, be it soybeans to Vietnam or wheat to Indonesia or peas to India. But the region is increasingly turning to other suppliers. A free trade agreement between Australia, New Zealand and the Association of Southeast Asian Nations (ASEAN) eliminated tariffs on 99% of New Zealand exports to Indonesia, Malaysia, the Philippines, and Vietnam. Through this agreement, Australia has steadily built up its exports to ASEAN, now accounting for 23% of its agriculture and agri-food export value.12 13 Brazil is another competitor to watch. Its enhanced trade promotion has not only made it a bigger supplier to ASEAN; it’s accelerating its presence in Africa and the Middle East—the world’s fastest growing regions—where its export values jumped by 24.4% and 20.4%, respectively, from 2023 to 2024.14
That re-ordering of global food trade occurred largely during a period of liberalized global trade—but that era may now be fading. If tariff and non-tariff barriers become normalized, and trade becomes more politicized, Canada’s ability to compete internationally may be challenged anew, including by growing exporters like Kazakhstan that are seeking to gain market share, especially in Asia and the Middle East.
Last year set a record US$45 trillion in global merchandise trade value, yet year-over-year growth in volumese have been on a downward trend since 2000.15 Average annual growth in trade volume was 2% between 2016 and 2025, slower than 3.45% in the previous decade.16 A key factor driving the slowdown is a deviation from a rules-based system, making way for protectionist-like policies.
For example, harmful trade interventions for cereals have increased by 2.5 times relative to liberalizing interventions since 2009, driven by financial grants, state loans, and import tariffs.17 Agriculture and agri-food often bear the brunt of such policies, given the political importance of food prices and also the political power in many countries of food producers. Average tariffs by a World Trade Organization member charged on an agriculture product is 14.8%, compared to 8% for non-agriculture products.18 A slowing appetite for trade, fewer new trade agreement opportunities, and disruptions to Canada’s North America-first export strategy are among the biggest challenges we may need to consider in the years ahead.
How to diversify: Play to our strengths, grow with new allies, invest in old markets
The opportunity is clear. Our model estimates that Canada’s share of the global export pie could grow by 30% by 2035f, adding $44 billion to total exports, if we pursue three main trade objectives: grow where Canada has market access, expand in the world’s best growth markets, and maintain existing relationships through strengthened “food diplomacy.“
The first challenge is straightforward, which is taking advantage of what we have. Canada has 15 free trade agreements providing access to over two-thirds of the global economy. Through these agreements, there is room to make better use of Canada’s market access in Europe, Asia, and Latin America. For example, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) is gradually phasing out most tariffs on seafood. Before CETA, EU tariffs for fish and seafood averaged 11%, with highs of 25%. These will be fully phased out within the next five years.19
Taking on new growth markets, with more ambition, is our next challenge. That can start in the Asian markets mentioned in the previous section. Consumers in Southeast and South Asia are expected to have more to spend on higher value products over the next decade, thanks in part to expectations for economic growth that will be among the best in the world, with GDP per capita forecast to rise 3.9%, annually, between 2024 and 2033, up from 2.6% in the previous decade.20 India is one of the clearest opportunities — a market of 1.5 billion people whose economy and standard of living are growing rapidly. This market will increasingly be an opportunity for Canada’s agri-food processing industries, especially plant-based proteins driven by Canada’s production of legumes – peas, lentils, and soybeans.
Canada’s oilseed and agriculture waste processing can also help meet expected growth in biofuel demand in Southeast Asia, where blending rates of biofuels with fossil fuels in markets such as Indonesia are expected to stay above 30%. That would raise biodiesel demand by 56% over the next decade in that country.21 Sub-Saharan Africa, the Middle East, North Africa, and Latin America are also expected to see large GDP expansions. For these regions, we can expect to see total and per capita consumption not only rise, but shift towards more nutrient-dense foods, including animal protein, vegetables, and legumes. One way to help: Canada can contribute to linking global marine transportation to local supply chains by helping to build up food corridors and port infrastructure in Türkiye, United Arab Emirates, and Saudia Arabia as key points of entry to growth markets.
Thirdly, Canada can strengthen and grow current partnerships. These markets include the U.S., Japan, China, and Mexico—the first three of which are projected to have food trade deficits over the next decade that surplus producers like Canada will compete for. Our advantage is established business networks and consumer confidence in our products. In particular, the U.S. is expected to expand its imports of fresh produce, fish, and vegetable oil over the next decade.22 Driving production and processing in these domains will help position Canada as a strategic as well as a reliable partner, if we can make some of the investments we’ll outline in the following sections.
Countries to watch
Brazil – The Investor
Now the second largest exporter of agriculture and agri-food products, Brazil is taking exceptionally large bites out of global oilseed and meat exports, with an approximate 20% and 11% rise in value shares, respectively.23
Row cropping in Brazil nearly doubled between 2000 and 2014, primarily from pasture conversion (80%), but forested land as well (20%).24 Brazil is also improving yields per inputs such as land, fertilizer use, and labour, with agriculture total factor productivity growing by 53% between 2000 and 2022. For comparison, Canada’s productivity grew by 27%. An industrial policy regime took a pro-business support model during the early and mid-2000s that attracted investment from multinational agri-businesses and life science companies, and helped finance growth in domestic storage, transportation infrastructure, and processing capacity.26
Brazil has taken an aggressive approach to marketing and promotion in growth markets and in expanding its market share in China. On the other hand, the European Union, Brazil’s second largest market, is set to enforce a zero-deforestation regulation by the end of 2025, prohibiting select imports, including soy, beef, and coffee products associated with deforestation post-2020.27 The regulation and other similar environmental policies tied to trade could present compliance challenges for Brazil even as domestic deforestation rates fall.
For the next decade, Brazil’s industrial policy playbook, Nova Industry Brazil, will drive innovation and sustainability with agri-food supply chains as a top priority for growth.
Australia – The Trader
Australia has used its 18 free-trade agreements with 30 countries to diversify, expand and adapt its agri-food export flows. The value of Australia’s agri-food exports to India increased +106% between 2022 and 2023 after the Australia-India Economic Cooperation and Trade Agreement (ECTA) entered into force in December 2022. In 2023, Australia took advantage of lower tariffs for meat in the Korea-Australia Free Trade Agreement, raising sheep and goat sales by ~50% in value relative to 2022.28
It’s diversifying its production to align with growth in export markets such as canola, and support that with trade promotion. Its new cross-sector agribusiness expansion initiative is a $85-million-dollar fund aimed at expanding and diversifying agri-food exports.29
An active participant in the Codex Alimentarius Commission, which is a collection of internationally adopted food standards. Alignment on food standards between trading partners is essential to avoid non-tariff barriers.
Spain – The Scaler
The country positioned itself as the go-to market for fruit, vegetables, and pork in the European Union, by focusing on production scale, quality, and regionalized production.
Propelled itself as a leader in agri-food reaching its EU and international customers via its 46 ports.30
Spain scaled production to meet export volume demands through growing productivity and a shift towards farm commercialization. This is evident through its centralized greenhouse production, optimized for regional market access and trade. However, this production cluster is primarily reliant on road transportation, creating vulnerabilities in logistics.
Spain will remain one of Canada’s top competitors in expanding in the European market, if it were to optimize its use of CETA.
Kazakhstan – The Grower
While not yet cracking the top 50 list of exporters, Kazakhstan’s agriculture and agri-food export value has grown by nine-fold since 2000.31
Over the next decade, if Kazakhstan’s agriculture land use trends mirror other agriculture powerhouses such as Brazil, Canada, and the U.S., we can expect to see its pastureland, which accounts for roughly three-quarters of all agricultural land to, in part, be transformed into cropland, strengthening their place in global cereal and oilseed markets.32
Under the Ministry of Agriculture 2021-2030 agricultural development plans, Kazakhstan plans to boost productivity in meat and dairy production, increasing carcass weights and milk outputs per animal, with sights on increasing their exports.33
Its agriculture sector has significant potential for growth, but is underdeveloped and underfinanced. With meaningful investments scaled through state-owned financial institutions such as KazAgroFinance, Kazakhstan will be one to watch for cereals, oilseeds, beef and sheep.34
Brésil
Brésil : l’investisseur
Devenu le deuxième plus grand exportateur de produits agricoles et agroalimentaires, le Brésil prend une part exceptionnellement importante dans les exportations mondiales d’oléagineux et de viande, avec des augmentations respectives d’environ 20 % et 11 % en valeur.
Les cultures en rangs ont presque doublé entre 2000 et 2014 au Brésil, principalement en raison de la conversion des pâturages (80 %), mais aussi des terres forestières (20 %). Le Brésil améliore également les rendements par rapport aux intrants tels que la terre, les engrais et la main-d’œuvre, et la productivité des facteurs agricoles globaux a augmenté de 53 % entre 2000 et 2022. À titre de comparaison, la productivité du Canada a augmenté de 27 %. Le régime de politique industrielle a adopté un modèle de soutien aux entreprises au début et au milieu des années 2000, ce qui a attiré les investissements des multinationales de l’agroalimentaire et des sciences de la vie et contribué à financer la croissance du stockage national, des infrastructures de transport et de la capacité de transformation.
Le Brésil a adopté une approche agressive en matière de marketing et de promotion sur les marchés en croissance, et il augmente progressivement sa part de marché en Chine. D’un autre côté, l’Union européenne, deuxième marché du Brésil, compte appliquer fin 2025 un règlement contre la déforestation interdisant des importations spécifiques, notamment de soja, de bœuf et de produits à base de café associés à la déforestation après 2020. Cette réglementation, conjuguée à d’autres politiques environnementales régissant le commerce international, pourrait poser des problèmes de conformité au Brésil malgré le repli des taux de déforestation dans le pays.
Au cours de la prochaine décennie, la politique industrielle brésilienne « Nova Industry Brazil » encouragera à l’innovation et à la durabilité, les chaînes logistiques agroalimentaires étant définies comme une priorité absolue pour la croissance.
Australie
Australie : le négociateur
L’Australie a mis à profit ses 18 accords de libre-échange avec 30 pays pour diversifier, développer et adapter ses flux d’exportation agroalimentaires. La valeur des exportations agroalimentaires de l’Australie vers l’Inde s’est envolée de 106 % entre 2022 et 2023 après l’entrée en vigueur de l’Accord de coopération économique et commerciale Inde-Australie (ECTA) en décembre 2022. En 2023, l’Australie a tiré parti de la baisse des tarifs douaniers sur la viande dans le cadre de l’Accord de libre-échange entre la République de Corée et l’Australie, augmentant les ventes de moutons et de chèvres d’environ 50 % en valeur par rapport à 2022.
L’Australie diversifie sa production afin de s’adapter à la croissance de marchés d’exportation tels que le canola, et soutient cette politique à l’aide de promotion commerciale. Sa nouvelle initiative d’expansion agroalimentaire intersectorielle est la création d’un fonds de 85 millions de dollars destiné à accroître et diversifier les exportations agroalimentaires.
Participant actif à la commission du Codex Alimentarius, qui est un ensemble de normes alimentaires adoptées à l’échelle internationale. L’harmonisation des normes alimentaires entre les partenaires commerciaux est essentielle pour éviter les barrières non tarifaires.
Espagne
Espagne : l’expansion
Le pays s’est positionné comme le marché de référence pour les fruits, les légumes et le porc dans l’Union européenne, en se concentrant sur l’échelle de production, la qualité et la production régionalisée.
L’Espagne s’est hissée au rang de chef de file de l’agroalimentaire en se connectant à ses clients européens et internationaux depuis 46 ports.
L’Espagne a augmenté sa production afin de répondre à la demande de volumes d’exportation, grâce à une amélioration de la productivité et à une transition vers la commercialisation agricole. Cela se traduit par une production sous serre centralisée, optimisée aux fins d’accès au marché régional et de commerce international. Toutefois, ce centre de production dépend principalement du transport routier, ce qui crée des vulnérabilités logistiques.
L’Espagne restera l’un des principaux concurrents du Canada pour ce qui est de l’expansion sur le marché européen si le pays décide d’optimiser son utilisation de l’AECG.
Kazakhstan
Kazakhstan : la croissance
Bien qu’il ne figure pas encore parmi les 50 premiers exportateurs, le Kazakhstan a multiplié par neuf la valeur de ses exportations agricoles et agroalimentaires depuis 2000.
Au cours de la prochaine décennie, si les tendances d’utilisation des terres agricoles du Kazakhstan reflètent celles d’autres puissances agricoles telles que le Brésil, le Canada et les États-Unis, on peut s’attendre à ce que ses pâturages, qui représentent environ les trois quarts de toutes les terres agricoles, soient transformés en marchés de cultures.
Dans le cadre des plans de développement agricole 2021-2030 du ministère de l’Agriculture, le Kazakhstan prévoit stimuler la productivité de sa production de viande et de produits laitiers en augmentant le poids des carcasses et la production de lait par animal en vue d’accroître ses exportations.
Le secteur agricole du Kazakhstan présente un potentiel de croissance important, mais il est sous-développé et sous-financé. À la suite des investissements significatifs réalisés par les institutions financières d’État telles que KazAgroFinance, le Kazakhstan deviendra un pays à surveiller pour les céréales, les oléagineux, le bœuf et le mouton.
Leveraging global strengths to ensure food security at home
Canada’s agriculture and agri-food sector is not just an exporter; it’s a source of high quality, affordable, and nutritious food for a growing domestic population. We produce more than we need, positioning ourselves as a net exporter of agriculture and agri-food products by $32 billion in 2023.35 However, the production mix of an export-oriented sector may not round out a healthy diet for all Canadians.36 A balanced approach is needed.
Canada has formed trade relationships with countries that specialize in producing foods such as fruit at a more competitive and productive rate. As a result, Canada runs a production deficit in fruits and vegetables, as well as sugar and confectionary products. Technology can help, in this case through the rise of modern, controlled environment agriculture. Pockets of production in Ontario, Quebec, Alberta and British Columbia have led to greenhouse fruit and vegetable production volumes increasing by roughly five times since 2000.37 This growing industry can play a critical role in closing the production gap, where vegetable production would need to double and fruit production would need to grow by five times to feed domestic demand.38
Canada will need to enable this growth through sufficient utilities, especially water, energy, and waste management. Expanding and decarbonizing Canada’s electricity grids will be essential, and could require provinces to invest nearly $160 billion to double their electricity supply with clean energy. Such investments create ripple effects in decarbonizing Canada’s food system by reducing the carbon intensity of energy used in storage, processing facilities and transportation.
Other areas for growth to meet domestic demand and regain global market share can be found in meat processing as well as fish and seafood production and processing. Meat production nearly doubles Canada’s average consumption rate, while fish and seafood production are just above consumption averages.40,41
These industries have been challenged by high operation costs, volatile commodity prices, labour shortages, and a challenging policy environment for aquaculture. Yet, there is a growing domestic and international demand for sustainable, Canadian-made proteins, which means the efficiencies created through global operations in Canada can help improve the cost and availability for domestic consumers.
Betting on Canada to feed the future may prove to be a safe environmental bet, too. While no country is immune from the negative impact of climate change on crops and animals, yield growth scenarios that account for increasing effects of climate change suggest Canada is projected to increase its role as a global breadbasket of staple crops such as wheat, soybeans, and corn.42 Canada is also well endowed with natural resources, and home to efficient production systems that responsibly use them. Canada’s agriculture water use for agriculture remains low at 11% of total freshwater withdrawal, compared to 67% in Australia and 40% in the United States. 43
Canada’s land use for agriculture also pales in comparison to the United States and Australia, which represents over half of their total land masses, while Canada’s agricultural land covers 6% of the country, underlying the limitations that other agriculture powerhouses face in meeting competing land demands for housing, energy, and food.44,45,46
Five keys to unlocking Canada’s export potential
1. Innovation
We’re a production leader and an innovation commercialization laggard. However, Canada is now also facing a productivity slowdown in agriculture production. Creating room for innovation in efficiency is the next reboot in productivity. Adoption is one area for improvement. Take automated steering for tractors and variable rate technology for fertilizers and seeds, as examples. Adoption rates for both remain low at 27% and 16%, respectively.46 We also need greater connectivity among researchers, start-ups, funders, and companies, preferably within agri-food innovation hubs like the ones grown in the U.S. Mid-West and Netherlands. That will require us to address the widening gap between private and public resourcing, which threatens Canada’s ability to develop partnerships in IP and commercialization. Government spending on agri-food research and development has declined by 9% on average, annually over the past decade. .47
2. Capital
Canada is in the top 10 countries for investments in agri-food technology and innovation.48 We could be in the top five, if annual investments in Canadian-based startups doubled. That could be tougher in a tariff world, which is inherently risky to foreign capital, but the returns on overseas exports could be enough to offset those North American challenges. Further expanding Canada’s agri-food processing sectors will also require upfront investments. Protein Industries Canada estimates we could own 10% of the global market share of plant-based foods by 2035, which would add $25 billion to annual sales. To achieve this ambition, Canada will need 10 to 15 new plant-based food processing facilities and $6 to $9 billion of capital investment for ingredient manufacturing alone.49 Scaling capital in Canada will also require us to beef up the business case, with more competitive approaches to tax and regulation. We can also do more to tell our story and reposition ourselves as a value-add producer, competing on price, quality, and volume. Developing company, region, and industry case studies (see box) that explicitly showcase what in Canada is ripe for growth, can contribute to attracting a new wave of investors.
3. Digital access
Canada needs to fix our 5G gaps. The use of precision agriculture tools highlights the importance of strong wireless connections in rural Canada. These tools rely on app or web-based platforms to improve use of feed, seed, fertilizer, and pesticide, so we can produce more with less. That requires high-speed internet and strong 5G cell reception, which rural Canada is lagging in. Deetken Insights estimates that if all Canadian farmers had access to 5G, it could add between $2.7 billion and $3.5 billion to Canada’s GDP by 2030, through input efficiencies and enhanced automation on farm.50 Canada’s Connectivity Strategy, a national vision for IT infrastructure, has propelled projects across Canada to expand access. Yet, two key agriculture producing provinces, Saskatchewan and Manitoba, have only 50% and 30% rural coverage, respectively, when it comes to 5G.51 Redeploying Canada’s rural connectivity funds to focus on rural and remote 5G access could be the initiative needed to unlock the digital economy for Canadian farmers.
4. Export infrastructure
Turnaround times at Canada’s ports are slower than many large competitors, averaging 2.7 days in 2022 while the United States, Brazil, and Australia, had average turnaround times of 2.1, 1 and 2 days, respectively.52 The Port of Vancouver, Canada’s largest port, has had longstanding infrastructure bottlenecks from the Second Narrows Bridge to the Thornton tunnel, which mechanisms such as the National Trade Corridors Fund or Canada Infrastructure Bank could help transform—if they have transformational funding. Currently, Canada’s roughly $20-billion a year investment on transportation infrastructure lags agriculture competitors such as Australia and the United Kingdom. Keeping up with these economies would require additional investments of between $13-20 billion.53 While ports are our main connection to global markets beyond the U.S., Canada’s rail system is a major domestic connector, and it is challenged with limited routes and rising labour disputes, that too require a rethink for growth. There are smaller opportunities, too, such as container logistics and inland terminals, as simple problems like container storage can clog our ports and rails.
5. Global marketing
Canada is suffering from a dilution effect in its market development and access approach—with limited resources to boot. The U.S. spends close to 20% of its agriculture support services budget on marketing and promotion, or triple Canada’s share of 6%.54 In a similar vein, gaining market share requires robust inspection and control services that ensure food safety and agriculture production’s protection against new diseases and pests. Canada has a strong reputation, but also must come to grips with a dilemma: even though we allocate 40% of that agriculture support services budget to inspection and control, we still face market access issues and duplicative inspections.55 One approach would be to pick the top five products for export potential and develop priority market assessments, such as Europe for seafood. Pooling public-private resources, the federal government could work with industry associations, companies, and provinces in region-specific, agile taskforces to promote exports and inform regulatory bodies on what’s needed to support growth. A complementary option: position regulatory bodies such as the Canadian Food Inspection Agency to proactively develop standards recognition and harmonization in the identified growth markets.
Canada in 2035
In just 10 years, the world will need to feed close to nine billion people, and many of them will have more income, and appetite, for higher quality foods like the kind Canada is known for. To meet this demand, the world will need to produce 14% more food, feed, and biofuels than we’re delivering today, and do it in a more disruptive trade environment.56
To feed this future, agriculture must also compete with climate change, urban sprawl and rising land use needs from energy production. Moving from short-term reactionary tactics to strategic growth, Canada can use the U.S. tariff threats as a wake-up call to leverage agriculture and agri-food as a driving force for trade diversification while building Canadian self-sufficiency.
Under a high growth scenario, we estimate Canada could return to our position as the world’s 5th largest exporter, regaining our international clout from the early 2000s. In such a scenario, Canada in 2035 would need to expand value added agri-food exports by 50% and grow agriculture commodity exports by 10%.h
If we achieve this growth, we can imagine a Canada in which:
The Atlantic aquaculture industry doubles in production and processing, feeding our European neighbours and the ones just next door;
Alberta, home to 80% of the country’s beef output, advances the resilience of its feedlots and supply chains, contributing to Canada becoming the second largest source of meat in Japan, just behind the U.S., from fourth place today.57,58
Our greenhouse sector, with aspirations of doubling its acres over the next decade, moves Canadians closer to their fresh produce at an affordable price.
Finally, all these products are delivered to consumers via transportation systems with fewer bottlenecks from rail to port and fewer constraints, from on-farm internet to non-tariff trade barriers.
Agriculture is often left off the plate in Canada’s economic strategy discussions. This needs to change if we are to build resilience at home and regain our presence abroad. By acting on these ideas, and others, with precision and speed, the next decade can see a boom in productivity, an unprecedented scale of manufacturing, and a new path for growth through diversified markets. For every part of the country, the opportunity is ripe for growth.
How to be a global champion
AGT Food and Ingredients—The value of processing clusters
Pulses and plant-based product supplier exports to more than 100 countries.
Primary markets: Türkiye, Algeria, Iraq and the U.S.
Growth markets: India, South Africa, Saudi Arabia, and United Arab Emirates.
Export strategy:
Its ability to handle and process high volumes of pulses grown in close proximity to processing facilities in western Canada has boosted its export ambitions.
AGT has an integrated supply chain from farm gate to global distribution, and has expanded its ownership into export-oriented packaged foods and value-added processing infrastructure and bulk and containerized freight handling and transportation.
International business has also been driven by expanding offices and processing capacity in Türkiye, Kazakhstan, United Kingdom, Australia, Europe, U.S., South Africa, and India.
Growth strategy:
Acquisitions and new capacity to expand processing within production clusters have enabled AGT to become a global exporter of value-added pulse and durum wheat food products. It has also positioned AGT to go from a buyer and exporter of commodities to retail products with over 21 facilities across Western Canada.
AGT is investing and engaged in research and development to create novel products and processing systems.
Maple Leaf Food—The value of efficiency
Protein company with products sold in roughly 20 countries.
Primary markets: U.S., China, and Japan.
Growth markets: Philippines, Singapore, and Vietnam.
Export strategy:
Advanced market and supply chain integration with the U.S extends its geographical reach.
Market access and development between Canada and U.S. has also been strengthened through mutual standard recognition on animal welfare, biosecurity, and quality.
The quality of Canadian pork has been well established and enjoys a strong reputation in existing Asian markets.
Setting up offices have helped support market development in Asia. It has enabled MLF to work closely with trade commissioners in Asia for market access and development, and resolving local market issues.
Growth approach:
Recognized portfolio of brands and strong leadership, especially within North American and Asian markets.
Vertically integrated supply chains with a prioritization of reinvesting in the business to expand capacity and improve operational and supply chain efficiencies.
Over the years, MLF has used acquisitions to achieve greater scale but also to acquire major competing or complementary brands.
Highly focused on production efficiencies through automation and developing centres of excellence where processing plants specialize on particular product lines, taking advantage of scale.
McCain—The value of networks
Products are sold in over 160 countries.
Export strengths and approach:
Developed local sales offices in Tokyo and Osaka, and distribution centers throughout Japan to ensure on-time delivery
Close relations between international office and processing facilities to ensure reliable and consistent supply that responds to international customer needs.
In the event of a product shortage due to a force majeure event, such as transportation delays or crop-related issues, they are able to propose an alternative product in a timely manner, since they have production bases in various countries.
Growth approach:
Developed strong, long term relationships with farmers through direct contracts, allowing McCain to be nimble in responding to production and supply chain disruptions and build business resilience.
Invested in regional-specific agriculture resilience to help key supply sheds mitigate and adapt to climate change and other disruptions.
Expanded processing facilities and logistics to existing and emerging agriculture production hotspots. This approach is demonstrated through their recent investment in processing facilities in southern Alberta.
John Stackhouse, Senior Vice-President, Office of the CEO, RBC
Myha Truong-Regan, Head of Research, RBC Climate Action Institute
Yadullah Hussain, Managing Editor, RBC Climate Action Institute
Farhad Panahov, Economist, RBC Climate Action Institute
Caprice Biasoni, Graphic Design Specialist
Shiplu Talukder, Digital Publishing Specialist
Boston Consulting Group
Terence Smith, BCG Centre for Canada’s Future
Keith Halliday, Partner and Associate Director, BCG Global Advantage Practice Area
Arrell Food Institute at the University of Guelph
Evan Fraser, Professor and Director
Amy Standish Assistant Deputy Minister, Policy and Programs, Government of Saskatchewan Brian Innes, Executive Director, Soy Canada Brodie Berrigan, Senior Director of Government Relations and Farm Policy, Canadian Federation of Agriculture Charlie Angelakos, Vice President, Global External Affairs and Sustainability, McCain Foods Limited Craig Klemmer, Manager of Thought Leadership, Farm Credit Canada Cyr Couturier, Marine Biologist & Aquaculture Scientist, Marine Institute of Memorial University Dana Dickerson, Director of Market Development and Sustainability, Grain Farmers of Ontario Darlene McBain, Director of Industry Relations, Farm Credit Canada Dave Carey, Vice-President, Government & Industry Relations, Canadian Canola Growers Association David McInnes Principal, DMci Strategies Deb Stark, Former Deputy Minister, Ontario Ministry of Agriculture, Food and Rural Affairs Erin Gowriluk, President, Canadian Grains Council Greg Northey, Vice President, Corporate Affairs, Pulse Canada Guillaume Lhermie, Professor and Director, The Simpson Centre for Food and Agricultural Policy Ian Ross, President and CEO, Grand Valley Fortifiers Janelle Whitley, Senior Director, Market Access & Trade Policy, Pulse Canada Janice Tranberg, President and CEO, Alberta Cattle Feeders Association Jean-Marc Ruest, Senior Vice-President, Corporate Affairs and General Counsel, Richardson International Limited Jeff Vassart, President, Cargill Limited Canada John Cranfield, Dean and Professor, Ontario Agricultural College at the University of Guelph Kendra Donnelly, Chief Financial Officer, Korova Feeders Kim McConnell, Industry Advocate Kristjan Hebert, President, Hebert Group Kinga Nolan, Policy and Regulatory Affairs, Grain Growers of Canada Kyle Jeworski, President and CEO, Viterra Kyle Scott, Managing Partner, Emmertech Leif Carlson, Director of Market Intelligence and Trade Policy, Cereals Canada Lenore Newman, Professor and Director, Food and Agriculture Institute Simon Fraser University Lorne Hepworth, Board Member, Agricultural Research and Innovation Ontario Michael Harvey, Executive Director, Canadian Agri-Food Trade Alliance Margaret Hudson, President and CEO, Burnbrae Farms Limited Margaret Hughes, Vice President, Sales and Marketing, Avena Foods Mark Walker, Vice President, Markets and Trade, Cereals Canada Martin Scanlon, Dean and Professor, Faculty of Agricultural & Food Sciences, University of Manitoba Matt Korpan, Executive Director of Research and Development, Center for Horticultural Innovation Peter Dhillon, Chairman, Ocean Spray Randall Huffman, Chief Food Safety and Sustainability Officer, Maple Leaf Foods Ray Price, President, Sunterra Richard Lee, Executive Director, Ontario Greenhouse Vegetable Growers Rickey Yada, Dean and Professor, Faculty of Agricultural, Life & Environmental Sciences, University of Alberta Ryder Lee, General Manager, Canadian Cattle Association Sylvanus Afesorgbor, Associate professor, University of Guelph Ted Bilyea, Distinguished Fellow, Canadian Agri-Food Policy Institute Tim Kennedy, Executive Director, Canadian Aquaculture Industry Alliance Tom Rosser, Assistant Deputy Minister, Agriculture and Agri-Food Canada Trevor Tombe, Professor, University of Calgary William Gould, Director of Business Operations, The Progressive Group of Companies Yves Ruel, Associate Executive Director, Chicken Farmers of Canada
UN Comtrade. Trade.
UN Comtrade.
Statistics Canada. Annual Survey of Manufacturing Industries, 2023.
Statistics Canada. Canadian International Merchandise Trade Database.
UN Comtrade.
UN Trade and Development. Revealed Comparative Advantage.
Statistics Canada. Annual Survey of Manufacturing Industries, 2023.
UN Comtrade.
World Bank Group. Aquaculture production (metric tons) – Ecuador.
World Bank Group. Aquaculture production (metric tons) – Ecuador.
OECD and FAO. OECD-FAO Agricultural Outlook 2024-2033, 2024.
Australian Government. Snapshot of agricultural export diversification to ASEAN, 2024.
New Zealand Foreign Affairs and Trade. The ASEAN-Australia-New Zealand Free Trade Area.
Government of Brazil. Historic milestone for Brazilian agribusiness shows leadership in global food security, 2024.
United Nations. Global trade to hit record $33 trillion in 2024, but uncertainties over tariffs loom, 2024.
World Trade Organization Stats. Merchandise export volume change.
Global Trade Alert. Cereals.
Afesorgbor, SK. Trump’s Tariff Threat Could Shake Trade Relations and Upend Agri-Food Trade, 2024.
Government of Canada. Opportunities and Benefits of CETA for Canada’s Fish and Seafood Exporters, 2022.
OECD and FAO.
OECD and FAO.
USDA Economic Research Service. USDA Agricultural Projections to 2034, 2025.
UN Comtrade.
Zalles, V., et al. Near doubling of Brazil’s intensive row crop area since 2000, 2018.
USDA Economic Research Service. International Agriculture Productivity Data.
USDA Economic Research Service. Brazil’s Momentum as a Global Agricultural Supplier Faces Headwinds, 2022.
UN Comtrade.
Australian Government. Agriculture, fisheries, and forestry exports in 2022–23, 2024.
Australian Government – ABARES. Snapshot of Australian Agriculture 2024, 2024.
Invest in Spain. Spain for agri-food industry.
UN Comtrade.
United States International Trade Association. Kazakhstan – Country Commercial Guide, 2022.
Statistics Canada. Table 32-10-0456-01. Production and value of greenhouses fruits and vegetables.
FAO STAT.
RBC Climate Action Institute. Climate Action 2025, 2025. 40FAO STAT.
OECD and FAO.
FAO AQUASTATS. Agricultural water withdrawal as % of total water withdrawal.
AAFC. Overview of Canada’s agriculture and agri-food sector, 2024.
Australian Government – ABARES. Snapshot of Australian Agriculture 2024, 2024.
USDA Economic Research Service. Land Use, Land Value & Tenure – Major Land Uses, 2025.
Statistics Canada. Canada’s farms integrate renewable energy production and technologies toward a future of sustainable and efficient agriculture, 2023.
OECD. Agricultural Policy Monitoring and Evaluation, 2024.
AgFunder. Global AgriFoodTech Investment Report 2024, 2024.
Protein Industries Canada. The Road to $25 Billion, 2022.
Deetken Insights. The socio-economic impacts of 5G, 2022.
Canadian Radio-television and Telecommunications Commission. Current trends – Mobile wireless.
World Bank. Connecting to Compete, 2023.
CANCEA. Canadian Construction Association: Transportation Infrastructure, 2022.
OECD. Agricultural Policy Monitoring and Evaluation, 2024.
OECD. Agricultural Policy Monitoring and Evaluation, 2024.
OECD and FAO.
AAFC. Distribution of slaughtering activity and number of federally inspected plants.
AAFC. Sector Trend Analysis – Meat trends in Japan, 2023.
Estimates are conservative and based on 2023 nominal value.
Trade data is converted from USD to CAD using Bank of Canada’s average annual rates.
Total trade of all goods. This category is inclusive of agriculture and agri-food.
Model estimates a high growth scenario of Canada’s market share growing from 3.7% in 2023 to 4.8% in 2035.
Based on a 3-year moving average.
Scenarios are developed for HS codes 1-24, from 2024 to 2035. Growth in global trade is based on the latest OECD-FAO Agricultural Outlook (projected export tonnage growth at 2023 prices) individually for Cereals, Oil Seeds, Fats, Sugars, Meat and Fish. Global exports in all other categories are assumed to grow at 1% per-year based on OECD-FAO’s projected growth for agricultural commodities overall.
Most of the world forgot to do its climate homework
➔ Why scrapped energy projects are back in the news
➔ The Trump Tracker
➔ Introducing the Trade Hub
Hot takes
➔Most of the world forgot to do its climate homework. As many as 95% of countries, missed a U.N. deadline to submit new climate pledges for 2035. The UN said many countries had asked for more time to ensure their nationally determined contributions (NDC) to the United Nations Framework Convention on Climate Change under the Paris Agreement are “first rate.” However, Canada submitted its plan, pledging to reduce emissions by 45-50% below 2005 levels by 2035. To track Canada’s progress on its net-zero journey, read our annual report Climate Action Report 2025.
➔Energy East, Northern Gateway and Saguenay LNG. The long-dead energy projects are back in the news as the momentum to extract resources and ship to places not called the U.S. are gaining momentum. But a shake-up in regulations would be needed for companies before we see movement on any of these projects. Enbridge CEO Greg Ebel, the erstwhile backer of the Alberta-to-B.C. Northern Gateway oil pipeline, said it would require “real changes” from governments before the project would move forward. That includes legislative changes, including repealing Bill C-69 , also known as the “no-more-pipelines-act” by its detractors. François Poirier, CEO of TC Energy, which had proposed the Alberta-to-East-Coast Energy East oil pipeline back in 2013, said Canadian projects will need to compete with the company’s other opportunities in the U.S. and Mexico. But a quick overhaul of the regulatory environment, Poirier noted, would signal Canada’s willingness to get projects off the ground.
➔BP pressed the reset button on its strategy. The U.K. energy company said it’s restructuring its low-carbon business “for growth, but in a more capital-light way .” Analysts believe the changes would lead to a watering down of the company’s climate ambitions. BP is also the target of an activist investor after the company lost nearly a quarter of its value over the past two years, with investors souring over the previous CEO’s policies. New CEO Murray Auchincloss, a key architect of BP’s net-zero strategy in the previous regime, is now helming the “ fundamental reset”.
➔The launch event of our annual report on Canada’s climate progress sparked some great ideas. We hand-picked five for the next five years gleaned from an event to celebrate our Climate Action 2025: A year for rewiring report. Email me at Yadullah.hussain@rbc.com if you’d like a PDF of the briefing.
Carney’s plan
Are we talking about a climate plan in this day and age? Yes, yes, we are. Mark Carney, former governor of two G7 central banks, and leading contender to take the Liberals into the next federal election, has shared some ideas on his platform on how to weave climate into economic policy. First, like Conservative Leader Pierre Poilievre, he wants to axe the consumer carbon tax.
Here are the contours of his some of yet-to-be-fleshed-out climate plan:
➔Strengthen the industrial carbon tax. Carney wants to refine the Output-Based Pricing System (OBPS) to 2035, tightening benchmarks to maintain a strong carbon price signal and curb credit oversupply. The plan also calls for inter-provincial collaboration. Last year, we worked with the Canadian Climate Institute and Clean Prosperity on using industrial carbon pricing to strengthen Canada’s competitiveness.
➔The plan is heavy on consumer-focused incentives. Expanding the Greener Homes Grants, increasing heat pump subsidies and implementing alternative financial tools, such as discounted mortgage insurance for energy-efficient homes are some of the ideas. The plan does not have a dollar figure for all these incentives and subsidies. Another idea that caught our eye: leveraging technology for real-time home energy assessments to drive smarter consumption decisions. (We wrote about that, too).
➔Mobilizing capital. Hard to mobilize capital when tariff threats and hard stares from across the border are making investors nervous. The plan also calls for finalizing Canada’s long-delated transition taxonomy. “Mandate broad coverage of climate risk disclosure for companies across Canada,” is also going to be a tough one to accomplish in an era when the U.S. is actively going after companies adhering to climate rules.
Chrystia Freeland, Carney’s Liberal rival and former Deputy Prime Minister, also has a plan to turn Canada into an “energy superpower” through major economic investment tax credits.
If she were to become PM, Freeland has pledged to “double down” on getting Canadian energy and resources to market, build West-East pipelines to reduce Canada’s dependence on the U.S. and secure its energy sovereignty. Critically, her government will fast-track 10 regionally important projects, of which three must be critical mineral projects, for faster approvals each year.
We will continue to monitor the climate and energy platforms of other candidates and other parties and summarize them in the run-up to the federal elections.
TRUMP TRACKER
A rundown of U.S. president Donald Trump and his administration’s pronouncements, orders, action and musings that could impact climate policy and trends.
➔Action #1: The U.S. approved a proposal from the country’s largest grid operator in the development of 50 new power plants.
➔Implication: Supposedly agnostic to energy sources, the projects are expected to encourage natural gas power, deemed more reliable than wind and solar power, in meeting urgent power needs. Renewable energy developers and environmental groups think the 50 new power plants “would jump the queue” and add to the delays in development of new wind turbines and solar farms.
➔Action #2: An oil and gas advocate was nominated to run the Bureau of Land Management.
➔Implication: If approved, Kathleen Sgamma , will oversee grazing, logging, drilling and wildlife conservation on 245 million acres of public land. The role is seen as part of the White House’s “energy dominance” vision that leans more on conventional energy than renewable power.
➔Action #3: On Day One of his appointment as Secretary of Interior, Doug Burgum issued several orders that would have a direct impact on carbon emissions. While “prosperity by deregulation,” and resuming offshore oil and gas leasing in several areas are among the highlights of the Secretary’s Day One orders, there’s one more thing that caught our eye: taking steps to prioritize updating the U.S. Geological Survey’s list of critical minerals and accelerating the ongoing geological mapping of the country.
➔Implication: From Greenland to Canada, the new (it turns a month old today!) U.S. administration sees critical minerals as a precious prize. Prime Minister Justin Trudeau even suggested critical minerals was driving talk of U.S.’s threat to annex Canada through “economic force.”
➔Action #4: Paper straws are out, plastic straw are back in, according to a new presidential executive decree.
Implication: “I don’t think plastic is going to affect a shark very much, as they’re munching their way through the ocean,” is an actual Trump quote.
Phew, we’re sure we missed a few. Let us know any pertinent orders and regulations and we will look to include them in the next edition.
Trade Hub
We can’t talk climate without talking trade these days. Trade Hub , a new digital platform by RBC, aims to highlight opportunities for Canada in an economic order shaped by energy and national security. We will examine several key areas where Canada can leverage its strengths, including agriculture, energy, critical minerals and manufacturing supply chains, and the regulations and policies that drive investments into the country.
➔ Institute head John Stackhouse is on a panel at the Canadian Federation of Agriculture’s annual general meeting Feb 25-26 in Ottawa. Moderated by Tyler McCann, Acting Director at the Canadian Agri-food Policy Institute, the Canada’s Place in the World panel will explore evolving geopolitical and trade dynamics and how they impact Canada’s foreign and trade policy, with particular emphasis on the implications for Canadian agriculture.
➔ Economist Farhad Panahov attended the 2025 Canadian International Auto Show. Look out for his latest commentary on Canadian EV demand trends soon.
➔ Trump Tracker: The President’s impact on energy and climate policy ➔ A brake on EV mandates? ➔ Meet the ‘science geek’ at the helm of U.S. energy policy
Hot takes
A trade war looms coast to coast. RBC’s economics team believes a persistent tariff could be recessionary for Canada. But is it equally recessionary for Canadian climate policy? A bit early to say, but in response to a White House that’s placing greater emphasis on energy security relative to energy transition, there is a stronger push to expand all forms of resource development in both the U.S. and Canada (see item below). That likely has negative implications on Canada’s oil and gas pollution cap. The consumer carbon tax, which is increasingly being abandoned by the Liberals and the NDP, is also on shaky ground.
B.C., for a start, is not wasting a crisis. With U.S. tariffs looming, Premier David Eby is streamlining the regulatory track for North Coast Transmission Line and other high grid projects to support the development of critical minerals and liquefied natural gas projects, etc. The government is also expediting approvals for natural resource projects to counter “threats from the south of the border.” B.C. expects its real GDP to decline by 0.6% between 2025 and 2026 if the U.S. goes forward with its tariffs on Canadian goods.
What do tungsten, tellurium and indium have in common? China has announced export controls on all three minerals, but they can be substituted by building up Canadian resources. In December, the U.S. Department of Defense and a Canadian infrastructure fund invested $35.4 million in Vancouver-based Fireweed Metals to advance its 100%-owned Yukon tungsten project towards a final investment decision. Meanwhile, Canada is a top five global producer of tellurium and indium—both are used to make solar panels. In so many ways, American energy security runs through Canada.
Fracking executive is confirmed U.S. energy secretary. Chris Wright will drive U.S. energy diplomacy and oversee the Strategic Petroleum Reserve (which the U.S. wants to build up), among other key tasks. In his Senate testimony, the self-confessed “science geek” pledged to “unleash” American energy at home and abroad, lower energy costs, and cut red tape. He is a fan of nuclear fusion and geothermal. Wright also batted away several questions from U.S. senators on rising insurance costs due to climate risks. He was also non-committal about a question on U.S clawing back renewable investments. Read his fascinating responses to senators’ questions here.
DeepSeek jolted AI exuberance—and that’s not a bad thing. The low-cost Chinese AI app’s unexpected rise rocked Big share prices, but also shook up independent power producers, natural gas producers and gas pipelines that had rallied on unprecedented power demand to fuel the AI frenzy. Suddenly, there are doubts around global power outlook (up to 3x by 2050 from current levels). It’s still early days, but it’s made Big Tech CEOs revisit their portfolio of (low-carbon) energy needs.
Climate Action Award: For successful conservation efforts to revive at-risk sea otters and peregrine falcons in Canada, according to a new research by Carleton University’s Laurenne Schiller, et al.
The brake on EV mandate
All of this might be moot by the next election cycle, but for now Ottawa’s EV mandate (20% of all new car sales must be EVs by 2026; 100% by 2035) still stands. Even before politics cast a shadow, progress is stalling: first, Ottawa ended its EV rebate program after helping push 546,000 EVs on to the roads. Second, Quebec has temporarily suspended its generous Roulez vert Program until March 31.
If Canada’s federal EV mandate survives the next election cycle, automakers will have to purchase credits from their peers to offset the shortfall if they don’t meet their quota. Tesla collected over US$1.8 billion globally from selling regulatory credits in 2023, and will become a major seller of credits here in Canada, most likely enough to supply most of the industry. (That explains why Tesla founder Elon Musk is pushing for an end to EV incentives in the U.S.)
There is a third pain point: The new U.S. administration’s rollback of EV incentives is going to dent automakers EV plans—they are already delaying them at a time when they should be ramping up. While EVs make up around 20% of Hyundai and Kia’s sales mix in Canada in 2024, other top carmakers still have a large gap to bridge unless they quickly ramp up their EV focus.
All of this could have a net effect of 2.5 million fewer EVs on Canadian roads by 2035, and emissions level that are 10 Mt CO2e higher, or approximately 6% of sector’s current emissions, according to Climate Action Institute economist Farhad Panahov.
TRUMP TRACKER
The U.S. is changing its climate policy in deep and meaningful ways. Here are some of the highlights (or should that be lowlights?) from a flurry of executive orders and policy pullbacks:
Policy shift #1: Abolish Biden-era auto emissions rules.
Implication: Possible disruptions of automakers’ plans in Canada and the U.S. gearing up to build more efficient hybrids and EV cars.
Policy shift #2: Terminate state emissions waivers, like California’s, that seek to limit sales of gas-powered cars; rescind EV sales target of 50% total car sales by 2030; scrap 100% zero-emission federal fleet target by 2035.
Implication: Adds uncertainty to EV production, but unclear whether it impacts EV tax credits are other EV-promoting policies rooted in tax codes and Clean Air Act regulations.
Policy shift #3: Declare a national energy emergency to spur more drilling, pipelines, refineries, power plants and reactors and “a massive increase in domestic energy supply.”
Implication: Oil producers have maintained capital discipline and returned money to shareholders rather than expanding production in recent years. Trump has also urged OPEC countries to open the taps to boost oil output at a time when global oil demand is tepid. But a recent wildlife drilling auction in Alaska yielded no bids, suggesting producer are not ready to “drill, baby, drill” yet.
Policy shift #4: Withdraw the U.S. from the Paris Agreement, a global pact to address climate change. Implication: The U.S. will be MIA on several global initiatives to fight climate change, suggesting a bifurcated international approach to combat global warming.
Policy shift #5: Rescinded 100% carbon pollution-free electricity by 2035.
Implication: A hit to wind and solar industries, which were expected to drive record clean electricity capacity additions in 2024 and possibly 2025.
What on the team’s reading list?: Range: Why Generalists Triumph in a Specialized World by David Epstein, Source Code by Bill Gates, and Supremacy: AI, ChatGPT and the race that will change the world by Parmy Olson.
Curated by Yadullah Hussain, Managing Editor, RBC Climate Action Institute.
➔ America’s era of energy dominance is here. What does it mean for climate policy? ➔ Climate Action Annual Report 2025: What Semex and Purolator have in common ➔ What Canadian business leaders say about climate action ➔ The TV series capturing U.S. oilpatch’s cheery mood
Hot takes
Subsidies, funding and leadership. These three levers will advance climate progress, according to a majority of the 100-plus business executives we surveyed for the Climate Action 2025: A year for rewiring, our annual report tracking Canada’s climate progress. Around three-fourths of Canadian businesses have a climate strategy in place, and roughly 40% believe they are (almost) equal partners with governments in driving climate action. Read the survey here.
Severe weather events are costing Canada’s economy. Natural disaster claims of $8 billion last year in Canada smashed the previous record of $6 billion, as climate-change fuelled weather events played havoc across the country from Jasper to Toronto, Insurance Bureau of Canada estimates. It’s not just Canada. Early estimates show Los Angeles’ wildfires could trigger economic losses of as much as US$150 billion—the costliest natural disaster in U.S. history. Globally, the losses stood at US$320-billion last year, 30% higher than 2023.
Misinformation is the world’s top short-term global risk. That’s according to a World Economic Forum report on global risks. While misinformation, and its close cousin disinformation, pervades society, it also pollutes discourse on climate issues. Social media is not helping as it plans to remove guardrails on misinformation. WEF’s top 4 long-term risks are all environmental: extreme weather events, biodiversity loss, critical changes to Earth’s system, and natural resource shortages.
Oilpatch cowboy tales. Taylor Sheridan, co-creator of the Yellowstone TV series—which tapped America’s conservative-progressive cultural clash—, is back with Landman (Amazon Prime), a Texas Permian Basin tale rife with drug cartels, roughneck life and merciless ribbing off the renewable sector’s presumed deficiencies compared to the oil sector. Watch the acerbic, plain-speaking oil lease executive—or landman—Billy Bob Thornton bat away Permian and parental troubles on a daily basis. It’s reductive and retro—quite like the American mood right now.
➔ Bi-Weekly Climate Action Award: To Ontario for launching a Home Renovation Savings Program that offers 30% rebate on heat pumps, rooftop solar panels and battery storage systems, etc. Buildings account for 13% of Canada’s emissions.
➔ Bi-Weekly Climate Action Fail Award: To Australia for delaying the rollout of new carbon emission targets by 2035, citing the return of Donald Trump’s return to the White House.
Canada’s role in U.S. energy dominance
There were no tariffs on Canadian goods on Day One of Donald Trump’s presidency—but they could come as soon as Feb. 1. Amid the chaos of Washington’s tariff and “economic force” threats, there might even by a sliver of opportunity for Canada: the potential of a new bilateral energy trade deal between the two as the U.S. president vows “energy dominance” for America.
The U.S. president has declared an “energy emergency” to build new critical infrastructure. Could some of it be built in Canada given the integrated nature of the two country’s energy sector?
Trump’s inaugural speech focused on “liquid gold under our feet,” and exporting American energy all over the world. Would Canada be feeding America’s domestic oil and gas markets that would free up U.S. output for exports? The contours of Trump’s Great Energy Game views Greenland, Canada, Mexico and the Panama Canal, as resource and depots hubs that the U.S. can draw upon. Glass half-full suggests Canada can be an equal partner in fortifying North American energy security. Glass half-empty suggests the U.S. may need less Canadian oil and gas in the future if its “drill, baby, drill,” mantra leads to a domestic output boom. Cue for calls in some quarters to resurrect the long-dead, Asia-facing Northern Gateway oil pipeline.
Canada has its work cut out as it keeps tariffs at bay and helps America realize its energy ambitions without losing sight of its own climate goals.
Meanwhile, the U.S.’s own climate targets are out the window with its exit from the Paris Climate Accord. If that positioning turns into a full reversal of the Inflation Reduction Act, it’s hard to see other major economies not following suit and scaling back their investments, according to Institute head John Stackhouse.
Read John Stackhouse’s take on Trump’s first day back in the White House.
Climate Action 2025: Rewire & reboot
The Institute’s second annual report on Canada’s climate action is full of insights, but here are five themes that stood out to us:
1. The big number: Climate action has doubled in Canada over the past five years, and there is one big driver: sizeable government funding announcements of $177 billion worth over the past decade, according to our tracking. Now comes the other hard part: how to fully deploy it.
2. Climate security is the new watchword. ESG is out, climate security is in—or so it seems. Protecting North American resources and supply chain is going to be critical over the next decade. However, governments will also need to distinguish between friend and foe (yes, we are looking at you, America).
3. Canadian innovation is alive and well—and under-reported: Guelph-based Semex is working away to make future generations of Holstein cattle breeds low-carbon. Meanwhile, unknown to most, logistics firm Purolator helped Canadian startups build better e-bikes. Innovation, driven by market forces, can lead to serendipitous solutions.
4. Alberta is a climate leader: The province’s early coal phaseout needs to be celebrated. Of course, Alberta’s U-turn on renewable development has undone some the goodwill, but climate progress is almost never linear.
5. A spate of new green projects couldboost theClimate Action Barometer. Our proprietary index on Canada’s climate action is tracking progress from a spate of decarbonizing projects, including Entropy’s carbon capture and storage projects, Shell’s Polaris carbon capture and Canada Nickel’s Timmins project, among others.
➔ On January 15, we gathered over 100 business, NGO, government, and climate leaders to launch our flagship climate action report, Climate Action 2025: a year for rewiring. We heard from Dave McKay, RBC CEO, Sir Andrew Steer, President and CEO of the Bezos Earth Fund, and Canadian artist Ed Burtynsky on ways Canada and the world can rewire our thinking and strategies to keep climate on the radar.
➔ Institute head John Stackhouse is in Davos. Follow him on LinkedIn to read his frequent updates.
➔ On January 30, Myha Truong-Regan, our Head of Climate Research, will be on a panel alongside Jennifer McLeod Macey, SVP, Public Affairs & Communications, Leger, and Tracey Bodnarchuk, CEO, Canada Powered by Women, at the Toronto Regional Board of Trade’s Powering our Climate & Energy Economy Symposium, to discuss what Canadians really think about climate and energy policy.
What’s on the team’s reading wish list: Waste Land: A World in Permanent Crisis by Robert D Kaplan, The Technological Republic: Hard Power, Soft Belief, and the Future of the West by Alexander C Karp and Nicholas W Zamisk, Abundance by Ezra Klein and Derek Thompson.
Curated by Yadullah Hussain, Managing Editor, RBC Climate Action Institute.
Davos has seen a few golden ages during its time. In the 1880s, the Swiss Alps town became one of Europe’s early tourist destinations when a new class of travellers took to the “grand tour.” Davos added to its lustre in the 1920s as a spa resort for a newly confident class of Europeans. And in the 1990s, it gained a special renown as home to the World Economic Forum, which was rapidly growing in prominence at the time as the intellectual centre of globalization.
But none of those moments may have quite matched the American exuberance that took to the sleepy ski town this week. Rather than showing signs of retreat, the U.S. came in force—700 strong—including Silicon Valley titans, Wall Street billionaires, Nobel laureates, industrialists and, as if to put the gold in golden age, Olympic ski legends Lindsay Vonn and Picabo Street. To cap it off, President Donald Trump—a longtime Davos fan—video-conferenced in from Washington to both berate other government and business leaders for not pulling their weight, and to talk up American exceptionalism. Golden or not, a new age felt like it had begun—not just for the 50 heads of government and 3,000 others in attendance, but for much of the world.
BlackRock’s Larry Fink and European Central Bank’s Christine Lagarde
Donald Trump speaking remotely to a packed Davos conference
Hans Ulrich Obrist and Sougwen Chung at the World Economic Forum, January 24, 2025
Emirates Display, Davos Platz
NBC Universal House, Davos Platz
Traffic on the main promenade, Davos Platz
Nicholas Thompson, Jonathan Ross, Andrew Ng, Yoshua Bengio, Yejin Choi, and Thomas Wolf at the World Economic Forum, January 22, 2025
Ursula von der Leyen speaking at the World Economic Forum, January 21, 2025
Washington Post Watch Party
Here are some of the themes that emerged at this year’s Forum:
1. America’s confidence has rarely been higher
The mood among American CEOs, and investors, was what one Davos veteran called “giddy.” Donald Trump’s triumphal declaration of a “golden age” seems to have given businesses a shot of confidence that has changed many 2025 outlooks. The U.S economy is showing such strength that the International Monetary Fund raised its global growth forecast for 2025, from 2.2% to 2.7%, as corporations invest, especially in artificial intelligence (AI), and look to acquisitions. The U.S. is now the world’s premier destination for investment, by a long shot. In the 12 months before Trump returned to power, it attracted US$227 billion in greenfield investment projects—up by US$100 billion and more than China, India and Britain combined. Consumers are showing renewed confidence, too, while Trump’s promise to cut corporate taxes and slash regulations has quickly unleashed the animal spirits of a free market. Even the tariff threats that are rattling trade partners are seen as a win at home, pushing businesses to build inventories and domestic capacity. More than policies, Trump seems to want to restore enthusiasm in corporate America and the broader economy, and stretch the country’s ambitions. “The impossible is what we do best,” he said by video conference. While American exceptionalism may carry companies and markets for a while, risks could cloud the sunny outlook. Joe Biden’s Inflation Reduction Act (IRA)—and its massive subsidies that are now on the chopping block—was a big reason for a lot of that investment. Inflation is another worry, as the massively indebted U.S. government continues to spend and compete with all that private investment. Immigration cuts are threatening the labour supply and could drive up wages, too. All that has put pressure on long-term interest rates, as investors wonder if inflation is truly conquered. Larry Fink, BlackRock’s CEO, said he could see a scenario in which 10-year bond yields hit 5.5%—not his forecast, he stresses, but just a distinct possibility that could dampen some of the giddiness.
Question for 2025 (Q25): Will an America First administration be able to work with other countries to keep global imbalances from tipping?
2. Europe’s confidence has seldom been lower
European leaders usually flock to Davos to tell the rest of the world about their special place in global affairs, diplomacy, business and economic policy. Not this time. European Commission president Ursula von der Leyen led a procession of voices from the continent, expressing concern about its prospects. American business and government leaders, including Trump, used the Davos stage to make it clear that Europe had become almost uninvestible because of the extraordinary layers of red tape that constrict companies and entrepreneurs. (One executive said new sustainability reporting rules required his company to answer 800 questions in its submission.) Von der Leyen acknowledged that a generation of young entrepreneurs was at risk of leaving for America and elsewhere, and conceded that Trump’s “Golden Age” messaging was a “wake-up call” for Europe. German opposition leader Friedrich Merz, who is expected to win next month’s election and become Chancellor, shared his conservative agenda of cutting taxes, slashing energy bills for manufacturers (prices have soared since Germany went off nuclear and then Russia cut gas supplies), reducing unemployment benefits and cutting family immigration levels to focus on skilled workers. He also wants to confront the Brussels bureaucracy. But it took an American, BlackRock’s Fink, to see some opportunity in the shifting winds, especially if Europe can agree to a single capital market. “There’s too much pessimism in Europe,” he told an audience on the final day. “It’s probably time to be investing back into Europe.”
Q25: Will a further expected shift to the right create momentum for deep changes to the European Union?
3. Supply shocks add to geopolitical risks
Just as the world is trying to find a new normal in the aftermath of the pandemic, the abnormal has become common. Some central bankers at Davos expressed concern about the growing threat of “supply shocks”—the disruptions in the global economy that gum up the free flow of markets. Their interest rate policies can control inflation only so much. Take the Panama Canal, for instance, one of Trump’s early targets. Any disruption to its normal operations could send inflation jumping again. Same for the Suez Canal, where Iran casts a dark shadow. The two conflicts of greatest concern to Trump—Ukraine and Gaza—could easily turn worse, and spread through their neighbourhoods at a time when many countries are pulling back from multilateral institutions like the United Nations. And then there’s perhaps the biggest risk on the supply side: climate-related disasters. Trump expressed confidence his administration can restore peace and some certainty where others had failed. He’s already opened an active channel with China’s President Xi Jinping, and suggested they work together to end the Ukraine war (Trump would handle the Ukrainians; Xi would work on Vladimir Putin). He took credit for the Israeli-Hamas ceasefire, too, and said he’d like to work on nuclear disarmament with China and Russia once Ukraine is settled. Many Davos regulars wondered if Trump, having twice won the U.S. presidency, is now angling for the Nobel Peace Prize, too.
Q25: Can shrewd negotiating skills and the strong arm of U.S. influence keep the world from greater war?
4. Energy dominance is a thing, but who will pay for it?
Say what you like about Trump, but he doesn’t mince words. And on energy, his message to the Davos crowd was clear: “Drill, baby, drill.” The Europeans seated around me in the conference hall looked shocked, until he said he would guarantee natural gas supplies for Europe. The desire for more of all kinds of energy—Trump cited oil, natural gas, nuclear, even coal—will be a relief to people in many countries struggling with high energy costs. But the political goal of “energy dominance” will have to overcome some market fundamentals. The sector has been starved of capital for much of the past decade, and may not want to invest billions of dollars on new production when prices are uncertain and perhaps falling. There’s the supply-chain challenge, too. New rigs and pipelines need a lot of heavy materials and skilled labour that are in short supply. The same goes for critical minerals which Trump wants the U.S., and allies such as Canada, to develop in order to wean themselves from Chinese supplies. Nuclear energy, which is gaining popularity, will have its own set of challenges in terms of time-frames and costs. As for the fastest-growing source of energy in the U.S., and elsewhere, the near-term fate of solar and wind is suddenly less certain. They’ve benefitted greatly from IRA, and now have to make it more on their own merits.
Q25: Will energy expansion be paid for mostly by governments, businesses or consumers?
5. The world is starting to re-arm, and re-aim
In the WEF’s annual risk survey of its members, armed conflict topped the list for the year ahead; two years ago, it didn’t even crack the Top 10. Ukraine has Europeans on edge, especially if the U.S. pulls back, while the Taiwan Strait is a worry to Asia. And the Middle East remains nervous as a weakened Iran—after losing influence in Syria, Lebanon and Gaza—considers its options. Despite Trump’s promise of peace-making, he and other leaders speaking at Davos made clear that governments in the coming years will be spending a lot more on defence. And that will mean competition for both new technologies and the old materials—steel, for instance—that every military machine is built on. The need for an advanced manufacturing sector is a key reason both Germany and the U.S. are looking to rebuild their industrial bases, to ensure they can manufacture their own weapons. They may have a harder time building up their troops, given aging demographics across the West and young generations’ reluctance to sign up for military service. Ukrainian President Volodymyr Zelenskyy came to Davos, in military fatigues, to maintain support for his efforts—and also issue a warning to Europe and its allies. Russia has a military force of 1.4 million, including 600,000 on and around Ukrainian soil. After that, Ukraine is the largest force in Europe, with 800,000 troops. France is next at 200,000. Moreover, Ukraine relies on the U.S. for more than a third of its weapons, and continues to build arms factories to gain more independence. Mark Rutte, NATO’s new secretary-general, warned of growing “hybrid” threats through the weaponization of civilian devices like drones (and pagers). Zelenskyy suggested Europe build an “iron dome” like Israel to protect itself from Russian missiles. It may need other defensive shields, including cyber ones, as warfare rapidly evolves, leaving no nation truly safe.
Q25: As AI increasingly powers dual-use weapons, will they be more useful to democracies or dictatorships?
6. Meet Gen AI’s agents of change
AI has become as common a theme at Davos as the economic outlook, and the two are increasingly intertwined. Unlike previous years when AI was debated largely by technologist and ethicists, it’s now firmly the domain of business operators too, thanks to the explosion of AI agents at work. Small wonder it’s called the agentic era. In the U.S. alone, more than 5,000 companies have been created in the last decade to help businesses deploy AI agents in call centres, on sales teams and in back offices. A WEF study released at Davos found companies that lead in AI adoption outperform their peers by 15% in revenue, with the biggest growth coming in financial services, telecom and media. A range of public and private enterprises shared their experience more broadly with AI, from accelerating drug discovery to providing municipal services in dozens of languages and advancing cancer detection. Copilots and agents have gained additional traction in education—in schools as well as workplaces, as AI increasingly personalizes and predicts a learning journey. Marc Benioff, CEO of Salesforce, a leader in the agent space, says the challenge now for organizations investing in AI is to develop more than tech talent. The coming preponderance of AI agents in every aspect of organizations is going to require new approaches to corporate culture and team-building, because the teams of tomorrow will include active learning AI agents. Benioff told a roomful of business leaders: “We’re going to be the last CEOs who will be managing only humans as our workforce.“
Q25: Is society ready to work with mixed teams of people and AI agents?
7. DEI seems to be MIA. Will climate manage to stay?
Diversity, equity and inclusion used to be central themes at Davos. No more, other than as an attack line for some politicians. Trump rattled the crowd—you could see people bristle in their chairs—when he called diversity initiatives “nonsense” and stressed, a few times, America would be a “meritocracy.” His rhetoric was tame compared to a speech earlier that day from Argentina’s Javier Milei, who railed against social justice efforts, saying rights are enshrined in law and so people don’t need privileges like hiring preferences. Away from the spotlight, some wondered whether the same giant pendulum swing might happen to climate, while Europeans looked to limit the impact of decisions like the U.S. pulling out of the Paris climate accord. Many climate-focused organizations seem to be already quietly shifting their focus, including a swing back to conserving nature. Another shift may be to move scarce dollars toward helping people and communities adapt to a world with more floods and fires. In the WEF risk report, five of the top 10 long-term risks were still climate-related. They may just need to be addressed differently. And more quietly.
Q25: How will a new class of conservative governments address the rise of climate-related disasters and damages?
8. The populists now have to deliver … to the people
Many political thinkers and historians at Davos had one eye on the new voices on the world stage, and another on the people who voted them in. Why? The populists now have to deliver, which won’t be easy in an age of tightening budgets and rising expectations. Gillian Tett, an anthropologist and journalist who is now provost of Cambridge University, cautioned the audience to be mindful of “social silence”—and the undercurrents that can pull any government under. The biggest risk, in her view, is an economic downturn, or worse a financial crisis, at a time when Trump is talking of a golden age and spending public money on things like AI and cryptocurrency that don’t mean much at the kitchen table. Despite his popularity now, Americans could grow more hostile if Trump’s wealthiest advisers were seen to profit from his policies while the general economy suffered. Such a prospect would play into a broader and growing anti-elite sentiment, which appears to be particularly strong among younger people. The annual Edelman Trust Barometer, released at Davos, showed this year an astonishing rise in the acceptance of violence among younger adults, as a means of expressing discontent. Lawrence Summers, the noted American economist, former Treasury Secretary and long-time Davos-goer, said governments would be wise to focus on service-delivery rather than grand promises and restructurings—getting roads paved, cheques delivered, and communities served in their times of need. In many ways, he noted, it’s overdue and could be good for democracy if it restores confidence in government and institutions.
Q25: Will any Western government be more popular than at the time of its last election?
9. Back to the moon, and beyond
For all the discussions at Davos about markets and policies—it’s the World Economic Forum, after all—the WEF manages to draw an eclectic mix of doers and creators. This year there was a special focus on space, and, yes, the space economy. One evening, under a bright moon, I made my way across the Davos valley, to a small dinner with the heads of several space agencies, and some of the entrepreneurs who are building entirely new sectors to get more people, and equipment, to our outer orbit—and to that shining moon. The diversity of exploration was impressive. Japan is rapidly advancing space robots and precision landing devices (they can land within 10 metres of their destination on the moon). The Japanese are also working with the Indian space agency on the next generation of moon rovers, which the Japanese think they can soon equip with pressurized cabins that will allow astronauts to drive on the surface without full personal equipment. The Saudis are focussed on launching satellites and collecting space debris. A team from the Massachusetts Institute of Technology explained a project to send a ship this month to the South Pole of the Moon, where temperatures range from +1 to -200, to study a crater that’s been visited only once. The European Space Agency has its own big project, to chase an asteroid that is hurtling towards us and will come within 38,000 kilometres of Earth (on Friday, April 13, 2029). A U.S. space investor, Kam Ghaffarian, was at our dinner to explain the hundreds of millions he’s investing in new launch systems, with a 700-person team in Los Angeles. He thinks launch technology will be one of the big growth opportunities, as the U.S. goes from a record 145 orbital launches last year (five times what it was in 2017) to sending that many every few weeks. There will be far more launches every month around the world. Entrepreneurs like Ghaffarian raised US$8.6-billion for space ventures last year—in a sector that a McKinsey & Co. study projects will be worth US$1.8 trillion in another decade. For the space-dreamers, it’s not about the money; it’s about the chance to help humanity rise above ourselves, and see our world as it is from space, with no borders and no conflict. And even among competitors, it’s about collaboration. As Mohammed Al-Tamimi, the CEO of Saudi’s space agency said, “no country will go to the moon and stay on the moon alone.”
Q25: Will the Trump administration formally launch a new Mars project?
John Stackhouse is Senior Vice-President, Office of the CEO, Royal Bank of Canada, and leads the RBC Climate Action Institute.
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