Climate Policy Engagement Overview: Canadian Manufacturers & Exporters (CME) does not fully support climate policy. The organization often places conditions on its support for climate regulation – for example, by offering general support for climate goals while advocating for increased government investment and financial incentives to support the manufacturing sector in attaining them.

Top-line Messaging on Climate Policy: CME has demonstrated mixed and often ambiguous positions on IPCC-demanded timelines for climate action and the need for climate regulation. In an October 2022 comment on Canada’s carbon pricing system, CME stated support for net-zero targets in line with IPCC recommendations while citing concerns about competitive disadvantage for both regional and national industry. In the same comment, the group also called for government-led investment and financial incentives to respond to climate change, such as those provided in the US’ Inflation Reduction Act, while not taking a clear position on other forms of policy or regulation.

Engagement with Climate-Related Policy: CME does not appear particularly active on specific climate policies. CME stated in October 2022 comments to Canada’s Department of the Environment that it supports mandates to meet the Paris Agreement's 2030 targets while also citing the costs of meeting Canada’s “extraordinarily ambitious target of reducing GHG emissions to 40-45 percent below 2005 levels by 2030.”

In October 2022 comments on Canada’s “Output-Based Pricing System Regulations,” the emissions trading component of Canada’s carbon pricing policy, CME emphasized the need to minimize risks in competitiveness and carbon leakage. It also cited concerns with the rising price on carbon in Canada "from $65 per tonne in 2023 to $170 in 2030" and the associated costs of this plan. These positions appear to align with CME’s previous advocacy on carbon pricing: in a 2020 white paper, CME suggested that carbon pricing creates “uncompetitive” circumstances for Canadian industry that result in “carbon leakage” as companies and investors seek opportunities elsewhere.

Position on Energy Transition: While CME has offered some support for an energy transition, its energy-related advocacy mostly calls for an energy mix that perpetuates the use of greenhouse gas-intensive energy sources. In February 2023 comments to the Standing Committee on Finance and Economic Affairs, CME called for a package of incentives in Canada similar to the US’ Inflation Reduction Act to spur clean technology; however, the comments seemed to emphasize carbon capture rather than clean energy incentives. In an October 2022 blog post, CEO Dennis Darby emphasized the need to achieve “100 percent emission-free” electricity and grid operation in Ontario, encouraging the expanded use of nuclear and hydropower.

Previously, in a 2020 white paper on clean fuel standards, CME suggests that fossil gas is a low-carbon energy source integral to manufacturing operations. In the same paper, CME suggests that a transition to low-carbon energy sources in the near-term is infeasible for the manufacturing sector due to the technological limitations of manufacturing operations which, according to CME, will not be adaptable to alternative energy. Further, in this paper, CME reiterates its concern for the anti-competitive impacts of climate policy, arguing that clean fuel standards risk incurring high costs to industry that may result in lost opportunities for the sector to innovate its own energy solutions.