Getting Where We Need to Go: Net-zero transport in Canada

Driving Canadian Economies, Sustainably

It is a fact of modern life that people need to move around. With a net-zero passenger transportation system, this can be done affordably, cleanly, and conveniently. This means prioritizing active transport (e.g., walking and cycling), electrified public transit (e.g., trains, streetcars, and buses), and small zero-emission vehicles [ZEVs]). To support these clean and efficient modes of transportation, urban planning and public infrastructure should be designed for efficiency, with mixed-use urban centres and effective intercity transit connections. Meanwhile, rural areas, small towns, and cities alike can be well-supplied with reliable public transit options and/or ZEV charging infrastructure to reliably meet most transportation needs. These solutions are already being deployed worldwide, benefiting millions of people from small Norwegian towns to large cities like Paris and Tokyo.

In Canada, recent progress in this direction has been mixed. On one hand, falling costs and supportive policies have increased ZEV sales over recent years—representing 16.5% of new light vehicle sales in the third quarter of 2024. Public transit ridership is slowly recovering after the COVID-19 pandemic, and ZEV charging infrastructure is expanding across the country—especially in provinces with ambitious supportive policies, such as British Columbia and Quebec. On the other hand, 70% of new passenger vehicle sales in 2022 were light-duty trucks, such as sport utility vehicles, which are heavier and less efficient than light-duty passenger cars like sedans and hatchbacks, and thus more expensive and polluting. Moreover, most Canadians depend heavily on their personal vehicles because more efficient alternatives, such as public transit and cycling routes, are often unavailable or inconvenient. This is influenced by zoning laws that restrict high-density housing and mixed-use neighbourhoods in cities, as well as governments prioritizing highways and road expansions over public and active transportation infrastructure. As a result, Canada’s transportation emissions have remained high since 2005, accounting for 22% of national emissions in 2022, second only to oil and gas production. The passenger transport system (which excludes freight) accounts for well over 50% of those emissions.

Lessons from around the world demonstrate that ZEVs, public transportation options, active transport infrastructure, and efficient urban planning can work. Meanwhile, the facts on the ground in Canada show that implementing these solutions is feasible. For example, over 50% of the population lives in the Quebec-Windsor corridor, with major cities like Ottawa, Montreal, and Toronto all situated conveniently for a high-speed rail network equivalent to examples in Europe. Despite Canada’s low overall population density (skewed heavily by vast, sparsely populated areas; see map), 82% of Canadians live in urban areas. This is comparable to other wealthy countries like the United Kingdom (85%), France (82%), and Norway (84%). A key challenge in Canada, relative to other wealthy countries, is that the urban spaces themselves have relatively low population densities, as influenced by the urban planning policy decisions outlined above. Remedying this, therefore, is not prevented by physical geography. Rather, the limitations of Canada’s current passenger transportation system—including traffic congestion, unreliable public transit, traffic fatalities, and urban pollution—can be solved by smart policy-making.

Population distribution in Canada, density by census division

Rethinking transportation in this way can bring vast economic opportunities. Most notably, a clean and efficient transport sector could directly employ an estimated 1.6 million people across the country by 2050, while reinvigorating Canada’s urban spaces and local economies, sparking growth and employment in a range of other industries, too. Indeed:

• Investment in public transportation creates more jobs per dollar than car-centric infrastructure. A study of 20 metropolitan areas in the United States found that if half of the public money spent on highway infrastructure was spent on public transportation instead, there would be a net increase of over 180,000 jobs over 5 years. That is, 20% more jobs at no extra cost. Research sponsored by the Ontario Ministry of Infrastructure also found that investing in highways and bridges reduced jobs in the province while public transit created them. These improved employment outcomes follow from increased—and more efficient—economic activity, as explained in the next point.
• Public transportation and high-density urban planning support local economies. The Ontario study highlighted above also found that public investment in road infrastructure decreased economic activity by crowding out private investment, whereas investments in public transit contributed to significant local growth. This is because public transit and increased urban density improve access to labour for businesses, employment for individuals, and innovation through clustering.
• Increased ZEV demand could drive a new ZEV and battery manufacturing industry in Canada—particularly in Ontario and Quebec. Clean Energy Canada and the Trillium Network (2023) estimate that with adequate policy support this industry could support nearly 250,000 jobs by 2030, with an annual contribution of CAD 48 billion to the Canadian economy. This industry, in turn, could accelerate ZEV adoption rates across the country.

Day-to-Day Benefits for Canadians

Public and Active Transport Is Typically the Cheapest Option

Car ownership is one of the largest expenses for many Canadian households—costing an average of CAD 16,644 annually—and these costs are increasing well beyond the rate of inflation. Costs include high upfront payments for new or used cars, high-interest loans used by households that cannot afford the one-off payment to purchase a car outright, car insurance, maintenance, and fuel. Well-designed, walkable cities with widespread and convenient public transport options and cycling infrastructure can, therefore, lower household costs by giving people the choice to drive less, reduce the number of cars they own, or opt out of car ownership altogether. People need to move, but with the right policies, many of them don’t need cars to do it. In addition to reducing household costs, public transit can also expand access to employment opportunities for those who cannot afford to own a car.

ZEVs Can Reduce Costs for Drivers

The most recent assessment from the Parliamentary Budget Officer (PBO) highlights that ZEV passenger cars cost 12% less than similar fossil-fuelled alternatives over the course of an 8-year life cycle. This translates to savings of over CAD 1,000 per year. Other studies in Canada suggest that savings can be as high as CAD 4,300 per year over 10 years. In both these studies, ZEVs remain cheaper in Canada—though less so—when government subsidies are excluded from the analysis. Similar statistics can be found in markets worldwide, with savings particularly noticeable for smaller cars and during periods of high oil prices. While the upfront ZEV purchasing costs are typically higher than fossil-fuelled cars, savings in fuel and maintenance more than make up for it over time. Upfront costs for ZEVs are also expected to decline further (relative to fossil-fuelled counterparts) as batteries become cheaper, and competition in the ZEV market grows. Supportive policies like subsidies and ZEV sales standards can accelerate this cost decline even further. For example, the federal ZEV sales standard is projected to reduce ZEV costs in Canada by 22% relative to a 2022 baseline cost trajectory.

Smooth and Fast Journeys

People use public transport when it is frequent and convenient. For commutes within and between cities, public transport avoids many of the inconveniences of car use, such as traffic and parking constraints. Public transport can also be faster on average than car use when supporting infrastructure is in place, as in Stockholm and Amsterdam. Evidence from Europe shows that between cities, highspeed (or at least high-frequency) rail is typically faster and more convenient than the equivalent car journey and even the equivalent flight over short-to-medium distances. Active transport—e.g., walking and cycling—is similarly quick and convenient for short journeys when urban planning supports it. This is especially true for cycling, which is often faster and more convenient than driving for short journeys in cities with supporting infrastructure. While many Canadians may have had difficult experiences with active and public transport due to underfunding and inefficient planning, usership can be expected to increase if these issues are addressed. What’s more, for every person using public or active transport, there is one less person adding to car induced traffic congestion—so drivers ultimately benefit, too.

Equitable and Accessible Transport

Planning for and funding public transit also enables greater mobility for those who are unable to drive. These groups include young people, the elderly, people with certain disabilities, and those who simply cannot afford to own a car. This last group is particularly disadvantaged in the current transportation system as poorer neighbourhoods typically have less access to public transport and greater distances to commute for employment opportunities. Expanding access to cheap, efficient, and accessible public transport can offer vulnerable people greater mobility than they experience in the current car-dependent transportation system. This can, in turn, empower individuals to live more independently, feel more connected to their communities, and take advantage of broader employment opportunities.

Reliable ZEVs

Despite the benefits of public and active transport noted above, some journeys will still be easier with a car—for example, parents travelling with multiple young children or individuals living in rural or suburban areas that lack convenient public transit connections. For most of those journeys, ZEVs—which include both battery electric vehicles (EVs) and hybrid vehicles—are reliable options. EVs already have sufficient range for the vast majority of journeys, and long-distance travel will become easier as charging infrastructure expands across the country. Indeed, the number of public charging ports in Canada almost quadrupled from 2018 to 2023—with this build-out expected to accelerate further as the ZEV sales standard takes effect. In the short term, drivers who consistently drive long distances in areas not yet connected with sufficient charging infrastructure can benefit from hybrid vehicles. These enable drivers to use electricity for short journeys while retaining the option of using fuel for longer drives. Looking ahead, batteries are becoming more efficient due to technological innovation, enabling drivers to reliably travel further on electricity alone. Finally, even if individuals sometimes require a car for specific journeys, this may not necessitate car ownership, as car-sharing services become increasingly common in cities around the world.

Clean Air

One of the clearest benefits of clean transportation is reduced air pollution in cities and towns. Air pollution from fossil-fuelled vehicles has been consistently shown to cause increased rates of respiratory illnesses (such as asthma in children and adults) and cardiovascular diseases. It has also been linked to other conditions, including neurological impacts and several types of cancer. A Canadian government study from 2021 estimated that 15,300 premature deaths are associated with air pollution—much of which comes from fossil-fuelled vehicles—each year, costing an estimated CAD 114 billion (Health Canada, 2021). Similar statistics for road traffic emissions specifically have been recorded in other jurisdictions. By switching to ZEVs, public transport, and active transport, many of these health impacts, economic costs, and premature deaths can be avoided.

Peaceful Spaces

ZEVs, public transport, and active transport all have the benefit of being quiet. Currently, high levels of traffic-related noise pollution—primarily driven by high traffic levels and combustion engines—seriously impact the mental and physical health of residents. Studies consistently identify a link between high traffic-related noise pollution and mental health challenges, such as depression and anxiety, as well as sleep deprivation. When this noise pollution is long-term, it increases the risk of physical health conditions, too, such as heart disease—causing an estimated 11,000 premature deaths in Europe every year. In addition, removing car-centric infrastructure like multi-lane arterial roads and parking lots from city centres creates room for pedestrian areas, green spaces, and parks, all of which improve people’s physical and mental well-being in urban settings.

Healthy Mobility

A combination of active and public transport as primary modes of transport has been consistently shown to improve health outcomes in a range of jurisdictions. This is because active and public transport encourages regular exercise, mitigating risks of severe health conditions like obesity and heart disease. Moreover, reduced car traffic in cities—driven by increased active and public transport usership—can significantly reduce casualties associated with vehicle collisions. Per mile, public transit riders are also around 10 times less likely than car passengers to be injured or killed in a road traffic accident . A clean transportation system saves lives.

Key Policies for Federal and Provincial Governments to Develop Canada’s Net-Zero Transportation Sector

The policies needed to achieve net-zero transportation will differ across Canada, particularly between rural and urban areas. That said, common principles of (a) reducing journey distances through urban planning, (b) prioritizing active and public transportation wherever possible, and (c) shifting to ZEVs (especially smaller models) will create a cleaner, cheaper, and more convenient transport system for Canadians across the country. To get there, federal and provincial governments each have a role to play.

Conclusion

A clean transportation system would generate expansive economic opportunities for new industries and jobs across the country while giving Canadians access to cheap, reliable, and convenient mobility in their day-to-day lives. More than that, expanding public and active transport usership across the country would help save many lives and billions of dollars in health care costs by reducing air pollution, noise pollution, and traffic-related fatalities. Getting there will require policy action at federal and provincial levels—that is, Canadian governments must drive the change for the benefit of people nationwide.

A full list of references can be found here.

Re-Energizing Canada is a multi-year IISD research project envisioning Canada's future beyond oil and gas. This publication is part of IISD's Clean Energy Insights policy brief series under this project, which outlines the benefits of a net-zero economy for Canadians across the country.