IMF applauds Canadian climate action, warns of ‘race to the bottom’ with subsidies
OTTAWA – The International Monetary Fund warns Canada’s green subsidies could spark an international race to the bottom, even as it praises the country for taking a “multi-pronged” approach to tackling climate change.
The international agency today published 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 the 2023 federal budget’s investments in the green economy.
But it called for better international coordination to avoid a “race to the bottom” where countries compete for investment with even bigger subsidies.
It also says Canada should consider a standard incentive regime to promote fairness and transparency, rather than negotiating company-specific packages.
The preliminary report comes as the Liberal government makes historic investments in the green economy and entices automakers like Stellantis with billions of dollars in subsidies.
This report from The Canadian Press was first published on June 20, 2023.
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