Climate change/greenhouse gas: appearance before the Standing Committee (November 4, 2020)

Adaptation

Q. How is the Government supporting climate change adaptation?

• Climate impacts pose major risks to Canadians’ health and well-being, economy, communities and natural environment.
• According to Canada’s Changing Climate Report (2019), Canada is warming two times faster than the global average, and three times faster in the North. This warming is leading to impacts with serious consequences.
• To help Canadians adapt to these impacts, the federal government is supporting foundational science and capacity building, standards, and on-the-ground adaptation projects, and is partnering with provinces, territories, municipalities, Indigenous communities and individuals to build resilience to climate change.
• Major investments in dedicated adaptation programming were made through successive federal budgets in 2016 and 2017 ($685.5 million).
• Budget 2017 also earmarked investments for broader green infrastructure leading to the 2018 launch of the $2-billion Disaster Mitigation and Adaptation Fund—the federal government’s most significant commitment to adaptation to date.
• The federal government is continuing to establish provincial, territorial and municipal partnerships to advance new adaptation initiatives, and is demonstrating international leadership on climate adaptation.
• Taken together, these measures will make Canadians safer, and communities, infrastructure and businesses more resilient to climate change.

Canada’s 2030 GHG Emissions Reduction Target

Q. Does the Government of Canada plan to bring forward a more ambitious 2030 target to COP26? If so, how will you engage on the new target?

• The Government is committed to meeting and exceeding Canada’s 2030 GHG emissions reduction target of 30% below 2005 level, and establishing plans to achieve a prosperous net zero emissions future by 2050.
• The Government of Canada intends to bring forward an updated Nationally Determined Contribution (NDC) by COP 26 in November 2021.
• Meeting and exceeding our 2030 target will be hard, but Canada has made tremendous progress since 2015 with projected emissions trending downwards. Based in Canada’s December 2019 projections, Canada’s greenhouse gas emissions in 2030 are expected to be 227 million tonnes lower than projected prior to the adoption and implementation of Canada’s climate plan.
• To ensure progress continues, the Government will be strengthening some existing measures and implementing new ones. Some of these measures were identified through Ministerial Mandate Letters as well as the recent Speech from the Throne such as investments in building retrofits, renewable energy generation and storage, and zero-emission buses and charging infrastructure, and planting over 2 billion trees over ten years.
• The Government intends to bring forward a plan of enhanced federal climate action by the end of the year with measures which will allow Canada to exceed its current 2030 target.
• The Government of Canada will also seek advice from experts and Canadians to set Canada on a path to net-zero emissions by 2050. This will include broad engagement with Canadians on pathways to achieve a prosperous net-zero emissions future.

Q. How can the Government of Canada meet and exceed the Paris Agreement targets when the 4th Biennial Report shows a 77Mt gap?

• Canada’s Fourth Biennial Report on Climate Change demonstrates that the government has made strong progress in implementing Canada’s national climate plan, the Pan-Canadian Framework. Emissions are on a downward trajectory for the first time in Canada’s history.
• However, we recognize that more action will be needed to meet Canada’s current target, go further consistent with what the science tells us is needed.
• Recognizing that more reductions are needed, in December 2019, the Government of Canada announced a commitment to strengthen existing and introduce new greenhouse gas reducing measures to exceed Canada’s 2030 emissions reduction goal and begin work so that Canada can achieve net-zero emissions by 2050.
• The Government has since announced investments in building retrofits, and renewable energy generation and storage, and zero-emission buses and charging infrastructure through the Canada Infrastructure Bank. In addition, the Governments of Canada and Ontario recently announced investments of $295M each in the Ford Motor Company to produce battery-electric vehicles in Canada.
• Other new measures announced as part of COVID-19 recovery include the Emissions Reductions Fund, which will provide primarily repayable contributions to conventional and offshore oil and gas firms to support their investments to reduce greenhouse gas emissions, and a commitment of $1.72 billion to clean up orphan and/or inactive oil and gas wells in British Columbia, Alberta, and Saskatchewan.
• These measures, and more to come, will ensure Canada is on a path to deeper emission reductions in a manner that is sensitive to the needs of the country, grows the economy in a sustainable and resilient way, and makes life more affordable for Canadians.
• We are hopeful that provincial and territorial measures advance as well.
• Provinces and territories have a key role to play.

Q. What has been achieved since the adoption of the Pan-Canadian Framework on Clean Growth and Climate Change?

• Since 2016, the Government of Canada has been working with provinces, territories, and Indigenous peoples, to implement the Pan-Canadian Framework on Clean Growth and Climate Change. Significant progress has been achieved. As a result, Canada’s greenhouse gas emissions in 2030 are expected to be 227 million tonnes lower than projected prior to the adoption and implementation of Canada’s climate plan.
• Key progress includes:
  • Putting a price on carbon pollution across Canada;
  • Regulating methane emissions in the oil and gas sector, which will reduce carbon pollution by about 16.5 million tonnes in 2030;
  • Accelerating the phase-out of coal-fired electricity generation by 2030, as part of our efforts to have 90 per cent of electricity from non-emitting sources, and supporting workers and communities transition to a low-carbon economy;
  • Developing “net-zero energy ready” building codes to be adopted by 2030 for new buildings;
  • Increasing the stringency of emissions standards for light- and heavy-duty vehicles, and taking steps to improve efficiency and support fuel switching in the rail, aviation, marine and off-road sectors;
  • Adopting a Climate Lens to ensure that future climate impacts are considered and addressed in federally funded infrastructure projects; and,
  • Establishing a new Canadian Centre for Climate Services, giving Canadians better access to climate science and information.

Q. The September 2020 Speech from the Throne indicates that the Government will immediately bring forward a plan to exceed Canada’s 2030 target. When will the Government release this plan?

• The Government of Canada is working hard to bring forward a plan as soon as possible.
• This plan would build on the more than 50 measures under the Pan-Canadian Framework, and the important progress achieved to date. The Government remains committed to fully implementing the PCF.
• New and ambitious actions highlighted in the recent Speech from the Throne, include:
  • Continuing the Government’s policy of putting a price on carbon pollution, while putting that money back in the pockets of Canadians;
  • Helping to deliver more public transit and active transportation infrastructure;
  • Making ZEVs more affordable and investing in more charging stations across the country;
  • Making Canada the most competitive jurisdiction in the world for clean technology by launching a new fund to attract investments in making zero-emissions products and cut the corporate tax rate in half for these companies to create jobs ;
  • Leveraging Canada’s competitive advantage (e.g., mineral resources) to develop domestic ZEV and battery sector;
  • Moving forward with the Clean Power Fund, including investments in the Atlantic loop, renewables and next generation clean technology solutions.

Q. Canada and the world continue to address the impacts of COVID-19. Why is the Government focusing on climate change?

• The Government of Canada is working closely with local, provincial, territorial, and international partners to minimize the health, economic, and social impacts of COVID-19 in Canada and around the world.
• While health and safety of Canadians remains our top priority, there is an opportunity to apply the lessons learned from the pandemic and build back better, working toward a greener economic recovery that will create jobs and build a sustainable future for Canadians.
• Global consumers and investors are demanding and rewarding climate action, and there is increasing global demand for low carbon goods and services.
• Climate action will be a cornerstone of our plan to support and create a million jobs across the country.
  The Canadian economy currently faces important challenges in light of the COVID-19 pandemic situation. With this in mind, our existing climate change measures, and more to come, will help put Canada on a path to deeper emission reductions in a manner that is sensitive to the needs of the country, grows the economy, and makes life more affordable.
• Many countries (e.g., European Union, New Zealand, United Kingdom) have already announced substantial green recovery investments to decrease GHG emissions, create jobs and support clean growth, nature and environmental protection. Canada must step up our efforts or we run the risk of becoming uncompetitive in a low-carbon global economy and net zero emissions future.

Clean Fuel Standard

What is the Clean Fuel Standard?

• The Clean Fuel Standard will reduce the emissions associated with the production, delivery and use of fuels.
• It will also create an incentive to use less-polluting fuels, drive innovation in the oil and gas sector, and encourage increased production of clean fuels in Canada.
• Once fully implemented, the Clean Fuel Standard will help cut pollution up to 30 million tonnes in 2030.

What fuels will be affected by the Clean Fuel Standard?

• In the first phase of the regulations, the Clean Fuel Standard will target liquid fossil fuels like gasoline and diesel that are used mostly in transportation.

Who has been consulted on the proposed Clean Fuel Standard?

• The regulations are being informed by a process of extensive consultation, including with provinces and territories, industry, and other stakeholders.
• We are also learning from other jurisdictions, such as California, that have already implemented similar measures.

What is the status on developing the Clean Fuel Standard?

• We plan to publish the draft Clean Fuel Standard regulations for liquid fuels in the Canada Gazette, Part I, this fall.
• The final regulations are expected in 2021, with a coming into force date in 2022.

Clean Technology

Can you inform the committee about what the Government’s position is regarding Clean Technology?

• Clean growth and clean technologies play a critical role in meeting Canada’s commitments under the Paris Agreement on climate change and in addressing other environmental challenges. Investing in clean technologies creates new economic opportunities and good jobs for Canadians.
• Canadian businesses are taking advantage of the tremendous economic opportunities offered through clean technology and renewable energy – estimated by the World Bank to be worth $6.4 trillion worldwide.
• The Government of Canada is supporting Canadian businesses, including by investing over $3 billion since 2016 in clean technology research, development, demonstration and adoption to help accelerate the growth of clean technology companies. Federal funding is provided through various programs, including the Low Carbon Economy Fund.
• Canadian clean technology firms are among the most innovative and promising in the world. In fact, 12 Canadian companies were named to the 2020 Global Cleantech 100 list. The Global Cleantech Innovation Index also ranked Canada Number One for innovation in the G20.
• As indicated in the recent Speech from the Throne, the Government will launch a new fund to attract investments in making zero-emissions products and will cut the corporate tax rate in half for these companies so that they can create new jobs and make Canada a world leader in clean technology. The Government will ensure Canada continues to be among the most competitive jurisdiction in the world for clean technology companies.

Federal / Provincial / Territorial Relations

Q. How does the government work with provinces and territories to ensure the federation is heading in the same direction when developing and implementing actions?

• Under our constitution, jurisdiction for environmental protection, including climate change, is shared between the federal, provincial and territorial (FPT) governments.
• The PCF is the first climate plan in Canada’s history to include individual and joint commitments by federal, provincial and territorial governments. It builds on the considerable leadership and actions taken individually and collectively by Canada’s provinces and territories.
• The federal government continues to work closely with provincial and territorial governments to implement more than 50 concrete measures under the PCF.
• As well, several governance and reporting mechanisms exist to ensure ongoing collaboration across federal, provincial and territorial governments to track progress in implementing measures under the PCF and to identify opportunities for further action.
• The Canadian Council of Ministers of the Environment (CCME) is the primary FPT ministerial coordinating body established to facilitate cooperation on environmental issues of mutual interest, including climate change.
• The CCME along with eight other FPT Ministerial tables have committed to reporting on progress on the status of implementation of PCF actions within their portfolio (including energy, infrastructure, transport, forestry, agriculture, innovation, emergency management and finance). Three annual synthesis reports on FPT progress in implementing the PCF have been delivered to First Ministers and published since 2016.

Indigenous Relations

Q. How do climate actions take into account the needs of Indigenous communities? On reserve? North of 60? Remote communities?

• Together, Budgets 2016 and 2017 committed $425M over 12 years across 11 programs to support Indigenous peoples’ adaptation and mitigation actions.
• Federal departments responsible for delivering PCF programs engage directly with Indigenous peoples. These dialogues help identify the specific needs and concerns of Indigenous peoples, including those who live in the North, in other remote communities, or on reserve.
• The federal government also has partnerships with Indigenous peoples through three senior-level, distinctions-based bilateral tables on clean growth and climate change.
• These partnerships have meant that, since the launch of the PCF, First Nations, Inuit and Métis partners have, on an ongoing basis, made recommendations to the government and identified ways for federal policy and programming to better support Indigenous peoples and their climate priorities.
• Significantly, some federal programs and policies have already been modified to better meet the needs of Indigenous peoples. Examples include:
  • Under the federal carbon pricing backstop, fuel charge relief for aviation fuels in the territories.
  • NRCan introduced modifications to its Clean Energy for Rural and Remote Communities program to better support capacity building at the local level.
• While there have been some broad successes under the PCF, Indigenous peoples have emphasized that more must be done to respond to their unique needs and promote self-determination.
• The Government is committed to continuing to work in partnership with Indigenous peoples to address their unique circumstances and empower them with the tools they need to respond to the changing climate.

Q. Are Indigenous peoples co-developing Canada’s climate actions and targets?

• The federal government is committed to working with Indigenous peoples to tackle climate change and embrace clean growth. The senior-level, distinctions-based bilateral tables with the Assembly of First Nations, Inuit Tapiriit Kanatami and Métis National Council will continue to inform the federal government’s climate actions that affect Indigenous communities and which responds to the unique needs and circumstances of Indigenous peoples.
• Internationally, Canada is proud to have championed the launch of the Local Communities and Indigenous peoples Platform, and its governing body, the Facilitative Working Group (FWG), under the UNFCCC. The Platform provides an opportunity to enhance the rightful voices of Indigenous peoples in international climate change discussions and to bring Parties and Indigenous peoples together to share knowledge and exchange views to inform the work of the UNFCCC more broadly.
• The Government of Canada looks forward to its continued close cooperation with First Nations, Métis Nation, and Inuit representatives in international climate change negotiations, including at the upcoming 26th Conference of Parties.

International Climate Change

Q. How will global climate ambition be maintained in light of the delayed COP and will Canada bring forward a more ambitious emissions reduction target?

• While immediate attention and resources are focused on the public health and economic crises of the pandemic, the need for urgent and ambitious climate action has never been greater. 
• Science tells us that current efforts are insufficient to meet the Paris Agreement target of limiting the global temperature rise to 1.5˚C and to avoid catastrophic impacts of climate change.
• Increasing ambition is built into the Paris Agreement and expectations are high that all countries increase their commitments.
• COP26 is shaping up to be one of the most significant international climate meetings since the adoption of the Paris Agreement. Because of the timing, it will be a test of the global community’s resolve to increase ambition and meaningfully address climate change. 
• Canada is preparing to submit an updated Nationally Determined Contribution ahead of COP26, building off of our commitments to exceed our 2030 target and reach net-zero by 2050. Canada will set legally binding, five-year emissions reduction milestones as a key component of our plan to achieve a net-zero emissions economy by 2050.

Q. How is Canada supporting global climate action in the lead up to COP26?

• Canada is working with the UK COP26 Presidency and other international partners to advance key priorities for COP26 including in the areas of energy transition, sustainable finance, nature-based solutions (NBS), adaptation and resilience, and green transportation.
• Canada is a leader in international climate action and COPs are great forums for making progress on initiatives like phasing out coal, pushing for zero plastic waste, protecting more of nature and advancing innovative finance for developing countries.
• One example is the Powering Past Coal Alliance (PPCA), which Canada co-leads with the UK. It is the world’s first and only government-led initiative to accelerate clean growth and climate protection through the rapid phase-out of unabated coal power. Since its launch at COP23 in 2017, its reach and influence have been growing and it now has over 110 members around the world. It is the driving force behind United Nations Secretary-General Guterres’ call for no new coal power and to put an end to coal finance.
• Canada is steadfast in delivering on its $2.65 billion climate finance commitment to help developing countries transition to low-carbon, climate-resilient economies. This funding supports developed countries’ commitment to jointly mobilize US$100 billion in climate finance per year by 2020 from various sources.
• Over the past five years, Canada’s climate finance has supported projects that reduce greenhouse gas emissions and encourage low carbon and sustainable growth as well as those that support vulnerable communities to increase their resilience.
• Canada is also working with the UK and Italy, through their respective G7 and G20 Presidencies in 2021, to build momentum for action on climate change and biodiversity as we progress towards the UNFCCC COP26 on climate change and the Convention on Biological Diversity’s COP15.
• Canada will also participate in ongoing international work on nature-based solutions, protecting biodiversity, better integrating conservation and ocean protection with climate action and adaptation. It all works together to raise ambition—and positive outcomes for our planet.
• Nature-based solutions is a particularly exciting area and Canada co-leads, with Mexico, an Action Track focused on this area as part of the Global Commission on Adaptation.
• Canada’s geography is well suited to nature-based solutions and we have a significant role to play. Canada has committed to protect 30 per cent of land and oceans by 2030. In joining the High Ambition Coalition for Nature and People earlier this fall, the Prime Minister called on other geographically large countries to commit the same.
• Expanding protected areas is critical, not just for stopping the loss of nature and biodiversity, but also for fighting climate change and preventing future pandemics. Leading up to COP26, we will be finding ways to bring in the private sector to make this a much bigger opportunity.

Q. Does Canada plan to take credit for the global impact of its LNG/iron/uranium production?

• The Government of Canada is focused on implementing domestic actions to meet our Paris Agreement commitments.
• No decision has been made regarding the use of Internationally Transferred Mitigation Outcomes (ITMOs) within Canada.
• We continue to develop our experience on how ITMOs would work under Article 6 and hope to conclude the rules at COP26.
• In the meantime, we will continue discussions with Canadians on the potential of ITMOs and how they can help reduce global emissions.

If pressed:

• Any trading of ITMOs must ensure environmental integrity and transparency, including no double-counting of credits. Countries engaging in ITMOs must also authorize the transfers.
• As we look at different scenarios, we need to keep in mind that countries looking to reduce their own emissions to meet the increasing ambition required under the Paris Agreement may be reluctant to give away credits to other countries.

Just Transition

Q. What is the Government of Canada doing to ensure there is a smooth transition to a cleaner, more sustainable economy and that it does not leave workers and communities behind (i.e. oil and gas, mining)?

• Achieving Canada’s climate change goals will require nothing short of a transformation of the Canadian economy, with corresponding impacts on and opportunities for Canadian workers.
• In early 2018, Canada launched the Task Force on the Just Transition for Canadian Coal Power Workers and Communities, to identify how to make the transition away from coal-powered electricity fair for affected workers and communities. In response to the Task Force’s final report, Budget 2019 dedicated $150 million to create an infrastructure fund and has already launched a separate $35 million fund to support skills development and economic diversification in Canada’s coal regions, including creating local transition centres.
• The Government of Canada is committed to advance legislation to support the future and livelihood of workers and their communities in the transition to a low-carbon global economy.
• Clean technology development, commercialization, and adoption across all industrial sectors is a key pillar in the transition to a decarbonised economy. The Government of Canada has invested more than $3B since Budget 2016 to drive progress in clean technology and the growth of Canadian firms and exports.

Net-Zero Emissions by 2050

Q. What is the Government of Canada doing to put Canada on the path to net-zero by 2050?

• Since 2016, the Government of Canada has been working with provinces, territories, and Indigenous peoples, to implement the Pan-Canadian Framework on Clean Growth and Climate Change. This plan outlines over 50 concrete measures to reduce carbon pollution, help us adapt and become more resilient to the impacts of a changing climate, spur clean technology solutions, and create good jobs that contribute to a stronger economy.
• The Pan-Canadian Framework on Clean Growth and Climate Change provides a foundation and positions Canada on a path to meet its 2030 targets and achieve net zero by 2050. The Government of Canada will continue to implement our climate plan, while strengthening existing and introducing new climate action to exceed Canada’s 2030 emission reduction target.
• The federal government will look to the advice of experts and consultations with Canadians to ensure the path to net-zero is sensitive to the needs of our country, grows the economy and makes life more affordable.
• The Government of Canada will set legally-binding, five-year emissions-reduction milestones based on the advice of experts and consultations with Canadians.

Q. Has the Government of Canada modelled the costs of getting to net-zero by 2050?

• Inaction would be more expensive than climate action. The costs of climate change in Canada could escalate from an estimated $5 billion per year in 2020 to between $21 billion and $43 billion per year by 2050.
• The Government of Canada has and will continue to analyze the economic benefits and costs of the full set of measures in the Pan-Canadian Framework, as well as its environmental and social benefits. We are committed to transparency regarding the assumptions, benefits and costs of this analysis.
• Each proposed regulatory measure and its supporting analysis will be published for public comment in the Canada Gazette, Part I, before being finalized.
• The direct cost of the actions in the Pan-Canadian Framework is projected to be modest, particularly in comparison to the projected benefits.
• There are many potential pathways to net zero. More clarity will be available on costs and benefits of pursuing various pathways once extensive engagement and analysis work has been completed.
• The Government has analysed the economic impacts of the Pan-Canadian Framework using ECCC’s peer reviewed, multi-region, multi-sector, provincial-territorial based computable general equilibrium CGE model. The model is extensively used to support policy development within ECCC.

Q. The Government has committed to reaching a net-zero target by 2050. What is “net-zero” and how is it defined.

• Climate experts say achieving net-zero emissions by 2050 means countries either emit no greenhouse gas emissions at all or offset them completely through actions that remove carbon dioxide and other climate warming gases from the atmosphere.
• In the months ahead, Canadians and experts will be consulted to identify pathways to net-zero that will grow the economy, while also making life more affordable.
• The Government of Canada will bring forward new and enhanced measures to ensure Canada will exceed its 2030 emissions target, providing a foundation for net-zero.
• The Government of Canada will also bring forward legislation requiring 5-year emission reduction milestones be set toward our goal of reaching net-zero in 2050.

Q. When do you plan to introduce legislation, a new climate plan, a new target and a net zero plan?

• Our goal is to:
  • Develop a new collection of federal climate change measures prior to the next UN Climate Conference in November.
  • Launch an engagement and analysis process in the coming months to help inform pathways to net zero.
• The timeframe for draft legislation is not yet definitively decided but we are working to have legislation ready as soon as possible.
• The legislation will establish a process or setting 5-year emission reduction milestones toward our goal of reaching net-zero emissions in the year 2050.

Background

The Minister of Environment and Climate Change has been mandated to lead government-wide efforts to develop a plan to set Canada on a path to achieve a prosperous net-zero emissions future by 2050, based on the advice of experts and consultations with Canadians.

Canada’s plan to achieve net-zero emissions by 2050 will include setting legally-binding, five-year emissions reduction milestones. The government will strengthen existing GHG reduction measures and introduce new measures to exceed Canada’s 2030 emissions target and provide a foundation for net-zero.

Net-zero emissions does not necessarily mean no greenhouse gas emissions at all. It means that all greenhouse gas emitted are offset through a combination of greenhouse gas removals and offset credits.

In 2019, Canada joined 77 other countries that have committed to achieve net-zero emissions by 2050. A number of subnational jurisdictions and cities have set net-zero targets, including California, New York State, Nova Scotia, Barcelona, Melbourne, Toronto, and Halifax.

Achieving net-zero will require careful calibration to reflect Canada’s unique circumstances – including geography, the importance of traditional resource economy, and shared jurisdiction on environment.

Net zero is not just a plan for our climate. Net zero is a plan for our economic competitiveness. A plan to achieve net-zero emissions will focus on growing Canada’s prosperity by taking carbon pollution out of our environment and out of our economy.

Leading the clean energy transition means rethinking how we can harness Canada’s resources, not whether or not we harness them at all.

Transforming our economy for the future is not something one government can or should do alone. It will also take time. To get this right we have a lot of work to do with provinces and territories, industry leaders, civil society, Indigenous communities, and all Canadians.

In the coming year, Canadians and experts will be consulted to identify pathways to net-zero that integrate its environmental, energy and economic objectives. We will seek input from Canadians on how Canada should innovate and transform our economy to keep good jobs here and create new ones.

Pollution Pricing Post 2020

Q. The PBO Report that was released in Feb 2020 estimates that the government will rake in close to $100M in GST by charging a tax on the carbon tax, can the department comment on the report?

• I am not in a position to comment on the specifics of the Feb. 2020 PBO report in detail, however the report confirms that, in ON, SK, NB, MB where the federal system applies, most households will receive more in Climate Action Incentive payments than the amount they pay due to federal carbon pricing – i.e. they come out ahead.
• It also finds that this is progressive, insofar as the lowest income households face lower carbon costs, and therefore receive the greatest net benefit from the return of proceeds.

Q. The PBO released a report in October 2020 that said Canada may need a carbon price of nearly $300 to meet its climate targets. Does the government plan to increase the price to $300?

• The PBO report explores scenarios to reach Canada’s target through carbon pricing alone. This is not the current federal approach.
• Our credible and affordable plan uses a price on pollution as well as a number of other measures to cut emissions and maintain competitiveness.
• Canada’s climate plan has a broad set of other federal, provincial and territorial measures to mitigate greenhouse gas emissions and does not rely solely on carbon pollution pricing to achieve Canada’s commitments under the Paris Agreement.

Q. What is the Government doing to help farmers with carbon pricing?

• The federal carbon pollution pricing system is designed to recognize the challenges faced by farmers, and help create economic opportunities, for example through carbon offsets.
• Farmers are receiving targeted relief under Canada’s climate plan. For example, the price on carbon pollution does not apply to gasoline and diesel used in tractors, trucks, and other farm machinery.
• The Government, including AAFC, is continuing to work to find solutions that address the cost impacts of extreme weather events for farmers.

Q. Why give (fishers/farmers/greenhouse operators) relief from the fuel charge? Why not other businesses?

• Under the Greenhouse Gas Pollution Pricing Act (GGPPA), the federal fuel charge does not apply to most farmers, fishers and greenhouse operators.
• For example, it does not apply to the use of gasoline and light fuel oil by farmers and fishers in activities such as operating a tractor on their farm or operating a fishing vessel.
• Other provinces that have implemented their own pollution pricing system have provided similar relief. For example, British Columbia offers relief to farmers and certain commercial greenhouse operators.

Q. What is the government’s position on the consitutionality of the Greenhouse Gas Pollution Pricing Act?

• We are confident that the Greenhouse Gas Pollution Pricing Act is constitutionally valid.

Q. This is just another government tax grab, isn’t it?

• The federal carbon pollution pricing backstop is not about raising revenues for the Government of Canada. All direct proceeds from pricing carbon pollution under the federal system are being returned to the jurisdiction in which they were collected.
• Provincial and territorial governments that asked for the federal system receive these proceeds directly from the federal government and can decide how to use them.
• For provinces that did commit to pricing carbon pollution from fuel (Ontario, Alberta, Manitoba, and Saskatchewan), the federal government is returning the majority of direct proceeds from the regulatory charge on fuel, in the form of Climate Action Incentive payments, directly to individuals and families in the province of origin.
• This includes a 10% supplement for residents of small communities and rural areas, in recognition of their specific needs.
• Those direct proceeds from the federal regulatory charge on fuel, which are not returned directly to individuals and families through Climate Action Incentive payments, provide support to schools, hospitals, small and medium-sized businesses, colleges and universities, municipalities, not-for-profits, and Indigenous communities in the province to adopt clean technologies that will help to reduce emissions and achieve cost savings.

Q. Does the Government intend to increase the carbon tax? When will it do this and by how much?

• This is a question about future government policy decision.
• The pan-Canadian approach on pricing carbon pollution, published in October 2016, sets out the carbon pollution price trajectory for direct pricing systems out to 2022 – starting at $20/t in 2019, rising $10/year to $50/t in 2022.
• The price trajectory post-2022 is still to be determined.
• Under the PCF, First Ministers committed to reviewing carbon pollution pricing across Canada by early 2022 in order to determine the path forward. This process is underway.
• Achieving Canada’s 2030 climate target will take significant collective action. Carbon pollution pricing, as a low-cost way to reduce emissions, is critical to reducing emissions, spurring innovation and clean growth.

Q. Has the department completed any analysis on the price trajectory?

• This is a question about future government policy decision.

Supplementary

• The price trajectory post-2022 is still to be determined. As for all policies, there is ongoing analysis of a wide range of options and tools to reduce emissions.
• As set out in the PCF, First Ministers committed to reviewing carbon pollution pricing across Canada by early 2022.

Q. But how is this fuel charge not a “tax”?

• The federal carbon pollution pricing backstop is not about raising revenues for the Government of Canada.
• It is about putting in place a regulatory scheme that puts a price on products that are more polluting, and at the same time, returning the proceeds to households and communities so they can make cleaner and more environmentally sustainable spending choices.
• A price on carbon pollution will lead investment and consumption towards more sustainable alternatives.

Q. How does putting a price on carbon pollution work to reduce emissions?

• Carbon pricing reduces greenhouse gas emissions by making polluting activities more expensive. As the price of fossil fuels rises, individuals and businesses will take actions that help them use less of those fuels in order to save money.
• A well-designed price on carbon pollution provides an incentive for climate action and clean innovation while protecting business competitiveness. It is efficient and cost effective because it allows businesses and households to decide for themselves how best to reduce emissions.

Q. How much will the federal and provincial carbon pricing systems reduce emissions?

• Carbon pollution pricing will make a significant contribution toward meeting Canada’s 2030 greenhouse gas reduction target.
• In 2030, emissions reductions are expected to increase to 61 to 85 Mt. 
• These are scenarios only. Emission reductions may vary depending on how carbon pollution pricing proceeds are used and the carbon price trajectory post-2022.

Strategic Assessment of Climate Change

Q. What is the Strategic Assessment of Climate Change?

• The strategic assessment of climate change provides guidance on how federal impact assessments will consider a project’s greenhouse gas emissions and its resilience to climate change impacts. This will enable consistent, predictable, efficient and transparent consideration of climate change in the impact assessment process.

Q. What is the status of the Strategic Assessment of Climate Change?

• In August 2019, a draft SACC was published for public comments. The final version, published in July 2020, considered comments received on the draft version and reflected the goal of net-zero emissions by 2050. In October 2020, a revised final SACC was published to provide clarifications on avoided domestic GHG emissions, offset credits, and a credible plan to reach net-zero emissions by 2050.

Zero Emission Vehicles

Q. What is the Government of Canada doing to reduce emissions from light-duty vehicles and help transition Canada to net zero emissions in 2050?

• To support the transition to a low-carbon transportation system, the Government of Canada has set targets for sales of ZEVs in Canada, which are as follows: 10 per cent of light-duty vehicle sales to be ZEVs by 2025, 30 per cent by 2030, and 100 per cent by 2040.
• The Government has already invested more than $180 million to support electric and alternative fuel infrastructure across Canada to expand the coast-to-coast network of electric vehicle fast chargers on the national highway system.

Q. What programs has Canada implemented to support the federal ZEV sales target?

• Budget 2019 provided $300 million to introduce a new federal purchase incentive program to encourage more Canadians to buy ZEVs. Effective May 1, 2019, the incentives for Zero-Emission Vehicles (iZEV) program provides incentives for new ZEVs, which include battery electric, plug-in hybrid, and hydrogen fuel cell vehicles, and is applied in addition to any provincial ZEV incentive offered.
• To support businesses to adopt ZEV technology, the government is offering a 100-per-cent write-off for ZEVs. Eligible ZEVs include electric battery, plug-in hybrid (with a battery capacity of at least 15 kWh) or hydrogen fuel cell vehicles, including light-, medium-, and heavy-duty vehicles purchased by a business. This measure applies to eligible vehicle purchases on or after March 19, 2019, and before January 1, 2024, with capital costs for eligible passenger ZEVs, such as cars and SUVs, will be deductible up to a limit of $55,000 plus sales tax.
• To ensure that vehicle supply meets increased demand, the government has earmarked $5 million over five years for Transport Canada to collaborate with auto manufacturers to secure voluntary ZEV sales targets.
• The Government of Canada has provided over $300 million to support the establishment of a coast-to-coast network of fast chargers for electric vehicles, natural gas, and hydrogen refuelling stations as well as the research, demonstration, and development of next-generation charging technologies and enabling codes and standards. The investments go beyond the national highway system, and focus on EV level 2 charging at workplaces, commercial and multi-unit residential buildings, public places, on-street and projects for fleets (e.g., taxis, car sharing), mass transit and inner city delivery.
  • As of March 2020, the Program has selected 837 EV fast chargers, 23 natural gas refuelling stations and 8 hydrogen refuelling stations for funding.
• The Government of Canada is supporting electric vehicle manufacturing through a recent deal with Ford Motor Company of Canada by investing $295M at Ford’s Oakville Assembly Complex.

Q. What is the Government of Canada doing to support the deployment of zero emission technology in other sectors?

• The Government of Canada is investing $1.5 billion to accelerate the adoption of zero-emission buses and charging infrastructure so Canadians can have cleaner commutes.
• Starting in fiscal year 2019-2020, 75% of new light-duty unmodified administrative fleet vehicle purchases will be zero-emission vehicles (ZEVs) or hybrid, with the objective that the government’s administrative fleet comprises at least 80% ZEVs by 2030. Priority is to be given to purchasing ZEVs. 
• In March 2020, the Government of Canada announced the expansion of the capital cost allowance deduction, through which businesses can claim 100 per cent of the cost of on-road passenger vehicles up to a limit of $55,000 per purchase, to now include off-road vehicles and equipment.