Executive Overview
Since stepping down from Justin Trudeau’s federal cabinet in 2021, former Canadian Environment and Climate Change Minister Catherine McKenna has maintained a bird’s-eye view of the global green transition. Operating from international boardrooms and advisory circles—including her roles as founder and CEO of Climate and Nature Solutions, chair of the UN Secretary-General’s High-Level Expert Group on Net-Zero Commitments, and leader of the Women Leading on Climate network—McKenna has witnessed firsthand how aggressively Europe and Asia are electrifying their economies.
Yet, looking back at her home country, McKenna perceives a dangerous disconnect. She argues that Canada is currently paralyzed by a toxic mix of domestic oil and gas lobbying and the noisy political turbulence of the post-Trump era in the United States. While international markets rapidly leapfrog toward cheaper, cleaner, and more resilient energy systems, Canada remains culturally and economically tethered to fossil fuels, viewing the transition through a lens of scarcity and political anxiety rather than economic opportunity.
In a candid, wide-ranging interview with Corporate Knights managing editor Mark Mann, McKenna unpacks the myths underpinning Canada’s current trajectory. She takes direct aim at the financial risks of doubling down on stranded assets, the broken promises of domestic oil and gas majors, the fallacy of labeling natural gas as a "green" transition fuel, and the urgent need to tie climate policy directly to cost-of-living relief. As Canada wrestles with economic uncertainty, inflation, and shifting global trade dynamics, McKenna’s message is stark: Canada possesses all the raw materials, talent, and clean energy needed to lead the twenty-first-century economy—if only it has the political courage to catch up with climate realism.
Detailed Chronology and Global Context: How Canada Fell Behind
To understand McKenna’s critique, one must first look at the timeline of Canada’s climate policies over the past decade. When the Liberal government swept to power in 2015, McKenna was handed the formidable portfolio of Environment and Climate Change. During her tenure, the federal government successfully negotiated a pan-Canadian framework on clean growth and climate change, established a national carbon-pricing benchmark, and signaled an intent to align Canada with the Paris Agreement.
However, the political and economic landscape shifted dramatically following her departure from cabinet. The onset of the global energy crunch, exacerbated by geopolitical conflicts such as the war in Ukraine and unrest in the Middle East, triggered historic spikes in oil and gas prices. Fossil fuel corporations recorded unprecedented, multi-billion-dollar windfalls, while everyday consumers shouldered punishingly high costs at the gas pump and on their home heating bills.
Concurrently, the political polarization radiating from the United States—amplified by Donald Trump’s rhetoric and the broader rollback of environmental protections south of the border—began to distort domestic Canadian debates. Rather than viewing the energy transition as an insulated, long-term economic necessity, Canadian political discourse became bogged down in false dichotomies pitting economic survival against environmental stewardship.
While Canada spent the early 2020s debating the semantics of emissions caps and whether liquefied natural gas (LNG) could count as a green fuel, international competitors moved decisively. Nations across Europe and Asia implemented stringent bans on internal combustion engines, restricted new gas hookups in residential developments, and heavily subsidized EV adoption and grid modernization. McKenna’s international engagements—from advising the Singapore sovereign wealth fund to collaborating with European financial institutions—revealed a sobering truth: global capital markets have already accepted that fossil fuels represent a shrinking horizon. Canada, she warns, risks becoming an economic outlier by refusing to acknowledge what the rest of the world already knows.
Supporting Context & Metrics: Affordability, Stranded Assets, and the Oil Sands Legacy
The Affordability Paradox
A central pillar of McKenna’s argument is that the climate crisis and the cost-of-living crisis are not opposing forces; rather, they are fundamentally intertwined. Political rhetoric often frames climate policies as an expensive luxury that working-class families cannot afford during inflationary periods. McKenna flips this narrative on its head.
"Regular people go to the pump and it’s terrible, and this is directly linked to the fact that their vehicle relies on gas," McKenna told Corporate Knights. "That is the affordability crisis. It’s housing, too, and other things, but a lot of it is our dependency on gas to fuel our cars and oil and gas to heat our homes."
When global commodity prices fluctuate due to international conflicts, Canadian households bear the brunt of the volatility. By failing to accelerate the deployment of cheaper, more efficient alternatives—such as affordable electric vehicles (EVs), heat pumps, and localized solar generation—Canada leaves its citizens exposed to the whims of global energy cartels. The solution, according to McKenna, is not to subsidize the fossil fuel status quo, but to aggressively lower the barriers to electrification, ensuring that energy independence translates directly into household savings.
The Myth of Canadian LNG and Stranded Assets
As Canadian policymakers debate whether to integrate major liquefied natural gas (LNG) projects into national infrastructure strategies, McKenna issues a stern warning regarding stranded assets.
Proponents of the oil and gas sector frequently argue that Canadian LNG can displace dirtier coal abroad while generating robust export revenues. McKenna dismisses this rationale as largely mythical. "I work globally. No one is saying, ‘I can’t wait for Canadian LNG.’ That is a myth," she asserted, noting that even during her time as minister, approved LNG projects floundered due to inherent market risks.
The financial danger lies in private profits and socialized risks. McKenna points to the massive, unfunded liabilities already accumulating across Alberta’s oil sands—specifically toxic tailings ponds and hundreds of thousands of orphaned and abandoned wells. Pouring billions of dollars of public capital into new, long-term fossil fuel infrastructure risks locking Canada into multi-billion-dollar liabilities that future generations of taxpayers will be forced to clean up.
Furthermore, global financial institutions are increasingly hesitant to back projects that run counter to net-zero trajectories. While Bay Street financiers occasionally lag behind their European and Asian counterparts in recognizing the speed of the global transition, McKenna warns that investors ignoring long-term fossil fuel demand projections are steering Canada toward economic peril.
Official Statements and Industry Accountability
Challenging the Oil and Gas Status Quo
McKenna leveled harsh criticisms against the Canadian oil and gas sector, accusing major producers of failing to deliver on the emissions-reduction promises made during her ministerial tenure. Instead of investing their record-shattering profits into meaningful decarbonization or workforce transformation, she argues that these companies have prioritized share buybacks for U.S.-based shareholders and executive compensation, all while demanding continuous public subsidies.
"We should not be beholden to large oil and gas companies, because it’s not helping regular people," McKenna stated.
The debate over whether natural gas should be classified as a "transition fuel" or included in a national "green taxonomy" represents another flashpoint. McKenna draws a hard line: new natural gas infrastructure must not be greenwashed. While conventional investments in fossil fuels may continue on commercial terms based on short-term market demand, labeling them as environmentally sustainable undermines international credibility. "If you look globally, that’s not a thing. We won’t be taken seriously," she warned.
To address the inequities of wartime price shocks, McKenna reiterated her call for a windfall tax on fossil fuel corporations—similar to measures implemented in the United Kingdom and other jurisdictions. Capturing excess profits generated by geopolitical instability and redirecting those funds toward affordability measures and clean energy deployment is, in her view, a matter of basic economic justice.
Navigating Global Trade and the EV Market
Addressing Canada’s complex trade relationships, particularly regarding China and the electric vehicle market, McKenna acknowledges the delicate balance required between national security, trade policy, and climate action.
When asked about policies that open domestic markets to low-cost Chinese EVs—such as strategies floated by economic figures like Mark Carney—McKenna points to economic inevitability. Consumers facing affordability pressures will naturally gravitate toward accessible price points.
"The reality is that people are going to decide based on price. That’s how it works," McKenna noted. Rather than relying solely on protectionist barriers, she challenges domestic auto manufacturers to rethink their production strategies: "If our auto manufacturers want to compete, then they should be producing EVs that are really basic, not expensive EVs."
Future Outlook: The Role of Women Leaders and the Path Ahead
Despite her frustration with domestic political foot-dragging, McKenna remains optimistic about the structural advantages Canada possesses. The country is endowed with abundant clean hydroelectric and renewable electricity, a highly skilled workforce, and critical minerals essential for battery manufacturing and modern technology. However, she stresses that these advantages mean little if policymakers fail to deploy capital and vision today.
A core component of McKenna’s post-cabinet advocacy is her Women Leading on Climate network. Drawing on her own experiences as often the lone voice for environmental protection in high-stakes political rooms, McKenna highlights empirical evidence demonstrating that women are statistically more likely to champion, discuss, and implement climate policies and corporate disclosures. By organizing female leaders across boardrooms, municipal councils, academic institutions, and grassroots activist movements, the network aims to institutionalize climate risk assessment into standard financial and governance practices.
When asked whether she plans to re-enter electoral politics, McKenna offers a definitive denial: "Nope. But I will help other people."
Her future, much like her current portfolio, is focused on global advisory work, institutional governance—such as her role on the board of the Singapore sovereign wealth fund—and empowering a new generation of leaders to push past political paralysis.
Ultimately, McKenna’s diagnosis for Canada is a call for strategic clarity. The global energy transition is no longer a speculative hypothesis or a distant environmental goal; it is the defining economic restructuring of the twenty-first century. For Canada, the choice is stark: cling to the fading profitability of a sunset industry while socializing its vast environmental liabilities, or harness the nation’s immense natural wealth to lead the green economy of tomorrow.
