Canada’s 2030 Emissions Reduction Plan - Chapter 5

5.1. Laying the foundation for 2050

As Canada sets out an ambitious and achievable path to its 2030 target, it is important not to lose sight of the ultimate goal—net-zero emissions by 2050. Actions taken to date, and those laid out in this plan, set into motion many of the key transformations that will be needed to achieve a net-zero emissions world.

What is net-zero emissions and why is it important

Net-zero emissions means that any GHG emissions released into the atmosphere are offset by carbon dioxide removals. Removals can include natural carbon sinks such as wetlands and forests, or sequestration using emerging technologies like carbon capture and storage.

Science indicates that getting to net-zero emissions by 2050 and achieving deep emissions reduction by 2030 are key to limiting warming to 1.5°C and averting severe climate-related risks. To ensure it is playing its part, Canada has joined over 120 countries, including all other G7 nations, and a host of Canadian municipalities, Indigenous communities, and businesses in committing to achieve net-zero emissions by 2050. On June 29, 2021 Canada enshrined into legislation its commitment to being net -zero by 2050 through the Canadian Net-Zero Emissions Accountability Act (the Act). A number of provinces, cities, and Indigenous partners have also made commitments to reach net-zero by 2050, including Vancouver, Hamilton, Toronto, Halifax, Newfoundland and Labrador, and Quebec. Prince Edward Island has pledged to reach net-zero emissions by 2040.^{Footnote 1}

Pathways to net-zero emissions: Observations and the 2030 ERP

There is no one-size-fits-all approach for achieving net-zero emissions. Different regions, sectors and groups will have their own pathways that reflect their unique circumstances. Developing concrete, just, and achievable pathways to net-zero emissions that leave no one behind will require continued engagement and collaboration with provinces, territories, Indigenous Peoples, industry, stakeholders, and civil society – reflecting input from independent experts, the latest science, and Indigenous Knowledge.

Taking action now will help ensure that Canadian businesses remain competitive in a low-carbon global economy. In their Sink or Swim report, the Canadian Climate Institute noted that some sectors and subsectors may be more vulnerable in this transition, while others areas of the economy, such as hydrogen and biofuels, and minerals and metals for renewable energy and EV batteries may stand to prosper. There are many opportunities for Canada to take the lead in the clean technology sector. For example in the past 5 years, exports of Canadian clean technology products and services have risen three times faster than other exports.

In their Canada's Road to Net-Zero report, RBC estimates that Canada will need to invest two trillion dollars over the next 30 years (approximately $60 billion per year, up from $15 billion per year currently) to achieve net-zero emissions. These investments, which will come from governments, businesses, and individuals, will transform every sector of the economy and create new job opportunities. In recognition of the significant efforts that will be required, Canada recently launched the Sustainable Finance Action Council to capitalize on opportunities on the road to net-zero.

While Canada will strive to reduce its emissions as much as possible, some areas of the economy will not be able to completely decarbonize, so remaining emissions will need to be offset.

Key elements of net-zero by 2050 and linkage to the 2030 ERP

Using less energy and supporting energy efficiency

The IEA's Canada 2022 Energy Policy Report notes Canada's energy intensity is still one of the highest in the OECD, and that energy efficiency will play a key role in Canada achieving net-zero emissions.

Energy efficiency means reducing the consumption of energy and saving money. The 2030 ERP includes a number of commitments to strengthen energy efficiency standards across the economy. See chapters 2.2 (buildings) and 2.6 (transportation).

Increased electrification and use of clean fuels

Replacing fossil fuel-based technologies with ones that use electricity will be essential. A number of key reports have estimated that the resulting demand for electricity in 2050 will be one and a half to three times current levels. Investments in existing, commercially available renewable energy and grid interties, as well as developing new sources of electricity, such as geothermal and SMRs, will be key to both replacing the current emitting sources of electricity generation and to meeting increased demand. With this in mind, it is also important to continue to support Indigenous Peoples and rural and remote communities in their transition from diesel-generated electricity to non-emitting sources. Reaching net-zero also requires non-emitting space and water heating systems.

Supporting the development and use of clean electricity and clean fuels is recognized as a priority in this 2030 ERP. See chapters 2.1 (economy-wide), 2.3 (electricity), 2.4 (heavy industry), and 2.6 (transportation).

Cleaner industrial processes

Electrification opportunities in heavy industry sector are currently limited, but are expanding. New uses for hydrogen, such as steel making, are expected to enable many industrial processes to move towards net-zero emissions. For processes that are not able to eliminate all emissions, emerging CCUS technologies will play an important role. The sector that will likely undergo the greatest transformation by 2050 will be oil and gas. In their Net-Zero by 2050 report, the IEA estimates that global oil demand will fall by approximately 75% from current levels by 2050. CCUS and hydrogen will help decarbonize ongoing oil and gas production, while the sector will also invest in a transition to producing clean fuel and non-emitting products.

To support the development of new clean industrial processes, the ERP reflects strategies and investments in technologies that can transform Canada's economy. See chapter 2.4 (heavy industry) and 2.5 (oil and gas)

Transforming the way people and goods are transported

Reaching net-zero emissions will require modal shifts such as public and active transportation, more low-carbon intensity fuels in the short-to-medium term, and a massive expansion of zero emission vehicles (ZEVs). Passenger vehicles will largely be electric, while delivery vehicle and specialized larger vehicles will likely shift towards a mix of electrification and clean fuels, such as hydrogen. Deployment of these new vehicles will be enabled by building out electric vehicle chargers and hydrogen stations across Canada. Air, marine and rail will also rely on a range of clean fuels and emerging energy efficiency technologies, and will also need investments in infrastructure (for example, to enable ships to plug into clean shore power when in ports).

The 2030 ERP reflects the importance of enabling a clean transportation system in all modes, from public and active transportation to vehicles, trains, ships and airplane. This ERP also recognizes the opportunity for Canada to become a leader in the development of batteries and zero emission vehicles. See chapter 2.6 (transportation).

Cultivating nature's ability to store carbon

Forests, farms, wetlands, grasslands and oceans all have enormous potential to absorb carbon from the atmosphere and store it. However, as noted by Clean Prosperity, not all carbon sequestered through natural processes is permanent, as captured carbon could be released back into the atmosphere by wildfires, changes in land-use or land management. Long-term planning and management is essential to ensuring carbon is stored permanently. Taking actions such as protecting, sustainably managing and restoring Canada's land and oceans and supporting Indigenous-led initiatives in nature-based solutions will allow Canada to harness the power of nature to achieve Canada's net-zero goals.

Nature continues to play a strong role in the Canada's efforts to meet its climate objectives. The 2030 ERP reflects the opportunities in efforts to further sequester carbon in Canada's lands. See chapters 2.7 (agriculture) and 2.9 (nature-based solutions).

Enabling the transition through additional domestic and international actions

To enable the transition to net-zero emissions, it is important that decision-makers consider climate impacts in a rigorous, consistent, and measurable manner. These considerations should include both short and long-term climate mitigation, as well as climate resilience and adaptation in order to be responsive to further warming and climate change. This is why the Government of Canada is developing an Integrated Climate Lens that will take into account climate, economic and inclusivity considerations to inform policy development and government decision-making across federal departments. The considerations built into the climate lens align with several of the Net-Zero Advisory Body's governance recommendations, including ensuring that federal government executives are aware of their role in achieving net-zero.

While Canada's actions to date have focused on emissions reductions measures within Canada, there is also the potential to support international action through 'internationally transferred mitigation outcomes' (ITMOs). ITMOs offer the possibility of emissions reductions at a lower cost, while contributing to sustainable development abroad. The Government of Canada will continue to explore the possibility to leverage international and domestic offsets to support Canada's climate objectives.

Building scientific knowledge and reflecting new understanding is essential to inform ambitious action, measure progress and refine climate actions. Environment and Climate Change Canada is leading the development Canada's first National Climate Change Science Plan, set for publication in Fall 2022. The Science Plan will identify priority science research and knowledge synthesis activities for investment that will deliver results over the next 5 to 7 years. These will also enable incremental progress on longer-term science challenges related to understanding how future warming will affect planned efficiency and renewable energy, technological and nature based solutions. The multi-disciplinary scope inclusive of natural, social, economic, behavioral and health sciences will emphasise the science challenges and priorities to inform the transformational changes needed to reach 2050 objectives.

The Science Plan will enable Canada, like other major international actors, to align its science capacity with its ambition on climate for the ongoing refinement and targeting of effective mitigation and adaptation actions. 

Scientific advancements in Canada are leading to enhanced climate modelling capability that will allow detailed simulation of carbon sources and sinks in both managed and natural landscapes, and in the coastal ocean. This reflects the growing scientific capability to model the carbon cycle at the global scale and understand the potential magnitude of carbon sinks in mitigation planning. Taken together, this scientific progress offers the possibility to better quantify the potential and permanency of natural carbon sinks, and the future climate-warming driven changes in these systems.

Similarly, the development of ground-based and space-based earth GHG atmospheric observations is creating opportunities to complement National Inventory Reporting, by informing the ongoing improvements in estimating emissions, and providing more information on emissions levels and their sources. Developing these data and tools provides insights on future mitigation opportunities, and helps improve our understanding of progress made towards emissions reductions targets and net zero.

To strengthen the science underpinning GHG emissions reporting as part of the Canadian Net-Zero Emissions Accountability Act, there is opportunity to align investment and capacity in research and monitoring, to mobilize available information on emission sources, sinks, capture storage, and pace of reductions in Canada, commensurate with ambition of the targets. Enhancing the nationally coordinated strategic effort will continue to leverage existing and future science, as well as Indigenous Knowledge to inform targets and evaluate progress.

5.2. Next steps

Future emissions reduction plans and tracking progress

The Canadian Net-Zero Accountability Act (the Act) will act as a legislative anchor as Canada charts its course to 2030 and 2050. The Act requires Canada to set emissions reduction targets at five-year intervals and to publish credible plans to meet these targets. The Act also requires progress and assessment reports at regular intervals. For 2030, progress reports are required in 2023, 2025, and 2027. These plans and reports will provide transparency and help ensure the Government of Canada is on track to meeting its climate objectives. This accountability system also provides flexibility for future plans to adapt to new challenges and opportunities associated with technological development.

Under the Act, the Government of Canada is also required to set progressively more ambitious GHG emissions targets for 2035, 2040, and 2045. These targets must be set by the Government no later than 10 years in advance of the target date. The future targets will be set based on the best scientific information available, Canada's international commitments with respect to climate change, Indigenous Knowledge, advice from the Net-Zero Advisory Body, and input from key partners and Canadians. Emissions reduction plans must also be established for each target year at least 5 years in advance of the target date. The next emissions reduction plan will be established for Canada's 2035 target and will be published by 2030.

In addition, 30 days after the National Inventory Report for a target year is released, the Government of Canada must prepare an assessment report of how measures have contributed to Canada's emissions reduction targets, and how future plans can be modified to ensure their success. If Canada does not meet its target the government must explain why Canada failed to meet the target and a description of actions the government will take to address the failure to meet the target. Similarly, the Act includes consideration of climate change science and knowledge which will be enabled by a national science plan, and strengthened coordination of national science capacity. This also supports the ongoing improvements in National Inventory Reporting, and measuring progress.

The Act required that this 2030 ERP be developed by March 29, 2022. Successive ERPs will have longer timeframes to conduct engagement, develop policies and actions, and will be able to build on feedback from this ERP. Additional time will allow for a more robust system for engaging partners and stakeholders, and developing more detailed plans. The Government will develop a more predictable and systematic process to establishing future plans.