The green potential of the Canadian economy

Making progress toward a cleaner environment includes the economy, and a Statistics Canada study released late last year suggests some industries are performing well on that front.

The study “Powering Progress: Toward a Better Understanding of Canada’s Green Economy” shows that some Canadian industries with higher green intensity have higher levels of productivity, growth and resilience.

“Green” activities include any economic activity that helps reduce the environmental impact, repair environmental damage or preserve ecosystems. These activities span across many areas, from the types of industries and work performed to exports of environmental goods, to investments by firms in environmentally friendly equipment and processes.

Let’s have a look at those key findings as well as some other economic and labour data for a snapshot of Canada’s green economic potential.

The study classified 285 industries across all sectors into low, medium and high green-intensity categories. From 2016 to 2022, high green-intensity industries were most common in sectors such as professional, scientific and technical services, construction and utilities.

The study found that, from 2016 to 2022, high green-intensity industries were on average 51.7% more productive compared with low green-intensity industries.

Over the same period, high green-intensity industries led productivity growth (+15.8%) compared with less green-intensive sectors. This growth came from efficiency improvements within the firm, shifting employment to more productive firms, and the net exit of less productive firms.

The study also found that high green-intensity industries were more resilient during the COVID-19 pandemic period.

Other data suggest a slight decline in green economic contribution, though there has been a boost in jobs.

Real gross domestic product (GDP) generated by the environmental and clean technology (ECT) products sector declined by 1.1% in 2024 to $70 billion, after gains in 2023 (+1.5%) and 2022 (+4.9%).

However, an estimated 363,094 jobs were tied to the ECT products sector in 2024, representing 1.7% of all jobs in Canada, marking a fourth consecutive year of job growth in this sector. Compensation in this sector also outpaced that of the broader economy, rising for the third year in a row.

StatCan also tracks economic contribution on the capital expenditure side, by infrastructure asset and function.

In 2024, investments in Canada’s infrastructure assets contributed $101.8 billion in value-added to the economy, and almost $4.3 billion of that came from environmental protection expenditures.

Most of this spending went to sewage infrastructure, followed by other engineering construction—such as waste disposal facilities—and pollution abatement and control.

There was $136.5 billion worth of investment in Canada’s infrastructure assets in 2024. Of that, $4.7 billion went to clean inputs.

In 2023, national industrial energy use (+0.05%) was little changed from 2022, and industrial greenhouse gas (GHG) emissions (-0.7%) decreased, while the overall economy grew by 2.0%. This was the first time since 2019 that GHG emissions decreased while GDP increased.

A StatCan analysis of 2021 GDP data by sub-drainage area found that goods-producing industries—including forestry and agriculture—often rely heavily on natural capital assets to enable production.

Looking at economic activity by region can give a clearer picture of how industries interact with the abundant natural resources throughout the country.

Visit the Economic Accounts Statistics and the Environment Statistics portals for the latest data and analysis on these subjects.