By Canadian Press

IMF applauds Canada’s climate action, warns of ‘race to the bottom’ with subsidies

Jun 20, 2023 | 12:01 PM

OTTAWA — The International Monetary Fund warns that Canada’s green subsidies could stoke an international race to the bottom, even as it credits the country for a “multipronged” approach to addressing climate change. 

The international agency published today the preliminary findings of its staff from an official visit to Canada.

The IMF applauded Canada’s climate action, including its carbon-pricing regime and 2023 federal budget investments in the green economy. 

But it called for better international co-ordination to avoid a “race to the bottom” where countries compete over investments with even larger subsidies. 

It also says Canada should consider a standard incentive regime to promote fairness and transparency, instead of negotiating company-specific packages.

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The preliminary report comes as the Liberal government makes historic investments in the green economy and is enticing automakers such as Stellantis, with billions of dollars in subsidies.

This report by The Canadian Press was first published June 20, 2023. 

The Canadian Press