2023 Progress Report on the 2030 Emissions Reduction Plan: Part I

Chapter 1: Introduction

1.1 Climate accountability legislation and climate plans

Canada was a signatory to the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 and set its first national emissions target in 2000. Despite these and other commitments, emissions in Canada continued to rise. While emissions hit a peak in 2007, in the year before the global economic slowdown, projections in 2015 indicated that that peak would be temporary. Canada’s emissions were projected to exceed the 2007 peak by 2020 and continue to rise. To ensure accountability and transparency, Canada ratified the Paris Agreement in 2016 and adopted the Canadian Net-Zero Emissions Accountability Act (CNZEAA or “the Act”) in 2021, enshrining Canada’s commitments to address climate change in domestic and international law.

Figure 1-1: Timeline of climate commitments in Canada

1.1.1 UNFCCC Paris Agreement

Under the Paris Agreement to the UNFCCC, countries agreed to collectively strengthen the global response to climate change, including by limiting global warming to well below 2°C, while also pursuing efforts to limit warming to 1.5°C. To help reach this goal, the Government of Canada announced in April 2021 that Canada’s initial target for 2030, to reduce greenhouse gas (GHG) emissions by 30% below 2005 levels, would be enhanced to the more ambitious target of 40% to 45% below 2005 levels by 2030, reflecting our ability to surpass the original target, the scale of the climate crisis, and the socio‑economic opportunity that climate action presents.

1.1.2 The Canadian Net-Zero Emissions Accountability Act: The Government of Canada’s climate accountability and transparency legislation

The CNZEAA became law in June 2021. This Act enshrines in legislation the Government of Canada’s commitment to achieve net-zero GHG emissions by 2050, and provides a framework of accountability and transparency to deliver on this commitment. The Act also establishes a legally binding process to set five-year national emissions reduction targets as well as develop credible, science-based emissions reduction plans to achieve each target. Under the Act, Canada’s legislated 2030 GHG emissions target is set as Canada’s Nationally Determined Contribution (NDC) for 2030 under the UNFCCC (40% to 45% below 2005 levels by 2030).

1.1.3 Emissions Reduction Plan

The CNZEAA requires that the Government of Canada prepare a 2030 Emissions Reduction Plan (ERP) to guide actions to meet the 2030 target. In March 2022, the Government of Canada released Canada’s 2030 ERP. Emissions reduction plans are also required for each of the 2035, 2040, 2045, and 2050 targets. The CNZEAA further requires the government to report regularly on the progress being made to meet targets, starting in 2023. As governments, Indigenous Peoples, businesses, civil society organizations and communities across the country work together to reach Canada’s climate targets, the plan will evolve and respond to new opportunities.

1.2 Imperative for climate action

Increasingly, scientists are linking extreme weather events with anthropogenic GHG emissions. An analysis by Carbon Brief found that of 504 extreme weather events reviewed, 71% were the result of or made worse by climate change.¹ At current rates, it is expected that global warming of 1.5°C will likely be reached between 2030 and 2052.² Canada is one of the highest per capita emitters in the world and accounted for approximately 1.5% of global GHG emissions in 2020, making it the world’s tenth largest emitter.³ Canada is the only G7 country that exports more emissions than it imports. While Canada’s emissions related to electricity generation have been cut in half over the past 20 years and Canada’s electricity system is among the cleanest in the world, Canada’s path to additional emissions reductions must contend with a vast geography, cold climate, trade‑exposed economy, and role as a major producer and user of energy and natural resources.

According to the UNFCCC, global emissions need to be nearly halved by 2030 for the world to limit temperature rise to 1.5°C,⁴ requiring increased ambition, accelerated implementation, and a whole-of-society approach including action by subnational governments, Indigenous Peoples, financial institutions, the private sector, and civil society. The science is clear—accelerated global efforts to reduce emissions are necessary to avoid the most devastating impacts of climate change. The economics are clear too—to build a strong, resilient economy for generations to come, we must harness the power of a cleaner future. Ambitious climate action over the coming years will be critical to making the necessary changes in time to prevent the worst impacts of climate change.

1.2.1 Impacts to communities

The devastating impacts of climate change are clear. In 2023 alone, Canada experienced the hottest summer ever, the largest wildfires in history, drought in the Prairies, and floods in British Columbia and Nova Scotia. Homes were destroyed, lives lost, thousands of people had to evacuate their homes, communities and businesses were impacted, smoke from wildfires blanketed the country, and biodiversity was put at risk. In addition to personal and emotional impacts, these climate impacts have economic consequences that affect families and communities, and send ripples through the Canadian economy.

Internationally, record-breaking flooding in Bangladesh impacted over 7 million people, leaving thousands homeless. Temperatures nearing 50°C were experienced in most parts of North Africa this past summer, while many parts of Italy, Greece, and Spain had temperatures in the mid- to high-40s. The U.S. National Oceanic and Atmospheric Administration has reported that 2023 is the worst year on record for the number of extreme climate related disasters in the U.S., with more than in any previous year on record.⁵

1.2.2 Impacts to nature

The wildfire season in Canada in 2023 that took a terrible toll on communities also impacted the landscapes and species found in those areas, including species at risk. As we saw in 2023, extreme weather events such as wildfire contribute to species and habitat loss. In addition, climate change impacts such as increased temperatures and precipitation can alter habitat, affecting ecosystem and species health.

Climate change also undermines nature’s ability to provide a critical contribution to climate change mitigation and adaptation. Canada’s forests, soils, plants, and wetlands contain almost one third of all land-based carbon storage and if these ecosystems are harmed by extreme weather events or ecosystem distributions from the changing climate, the stored carbon can be released into the atmosphere. The 2023 wildfire season in Canada burned over 18.5 million hectares of forest land, resulting in large, unprecedented emissions. The North is warming twice as fast as the global average, melting the permafrost and releasing carbon that has been naturally stored underground.

A synergistic approach to tackling climate change and biodiversity loss is essential to store as much carbon as possible and retain natural features, such as wetlands, that can better absorb climate impacts as we experience greater change. To help meet that goal, in December 2022, Canada co‑hosted and brokered a global biodiversity agreement at COP15 in Montréal. Canada followed up on that historic event by hosting the Global Environment Facility Assembly in August 2023, where governments launched the Global Biodiversity Framework Fund.

1.3 Climate change and affordability

1.3.1 Economy-wide impacts of climate policies

Canada’s economy has recovered strongly following the COVID-19 pandemic, yet many Canadians are now facing new affordability challenges, including higher grocery prices, energy prices and housing costs. The pandemic led to significant supply chain disruptions and changing consumption patterns, which in turn contributed to high inflation. This situation was then worsened by the Russian invasion of Ukraine. These challenges have been significant and highly disruptive for Canadians.

Slowing economic growth has been observed both in Canada and around the world. The Canadian economy grew by 1.6% per year from 2006 through 2021, a period that includes the 2009 global recession and the COVID‑19 pandemic. On an annual basis, Canada’s real GDP growth is projected to slow down from a strong 3.8% in 2022 to 1.1% in 2023 and 0.4% in 2024, before rebounding to 2.2% in 2025.⁶ While Canada’s economy continues to grow, emissions continue to decrease.

Figure 1-2: Canadian GHG emissions and indexed trend emissions intensity
(excluding Land Use, Land-Use Change and Forestry)

1.3.2 Revenue neutral carbon price

Since 2019, every jurisdiction in Canada has had a price on carbon pollution. Canada’s approach is flexible: any province or territory can design its own pricing system tailored to regional needs, or can choose the federal pricing system. The federal government sets minimum national stringency standards that all systems must meet to ensure they are comparable and contribute their fair share to reducing GHG emissions. If a province decides not to price pollution or proposes a system that does not meet these standards, the federal system is put in place.

The carbon pricing system has two parts: a regulatory charge on fossil fuels like gasoline and natural gas, known as the fuel charge, and a performance-based system for industries, known as the Output‑Based Pricing System. The fuel charge applies in Ontario, Manitoba, Yukon, Alberta, Saskatchewan, Nunavut, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. The Output-Based Pricing System applies in Manitoba, Prince Edward Island, Yukon, and Nunavut. All other provinces and territories are implementing their own pricing systems.

The revenue generated from the federal fuel charge is returned to consumers in the form of Climate Action Incentive payments (CAIP), distributed quarterly. Through these payments, the majority of Canadian families receive more money back than they pay, with low-income Canadians benefitting the most. Households and individuals who take steps to reduce their use of fossil fuels can save even more money by not paying the carbon price.

With this revenue neutral approach, the price signal from the carbon price encourages consumers to reduce the consumption of fossil fuels while ensuring households are not worse off, on average. While this can seem counterintuitive, carbon pricing is proven as one of the lowest cost and effective ways to reduce emissions. For more information, see how carbon pricing works.

1.3.3 Household economic benefits of decarbonization

The International Energy Agency (IEA) has highlighted the important role of electric vehicles and heat pumps in not only achieving net zero but also boosting energy security and affordability.⁷ Research by Clean Energy Canada found that decarbonization can reduce overall energy costs by up to $800 per month, even when the costs of purchasing the equipment is factored in. Recent analysis by the Canadian Climate Institute found that on average, in the five cities assessed (Vancouver, Edmonton, Toronto, Montréal, and Halifax), the lifetime cost of a standard heat pump with electric backup is 13% lower than a gas furnace and air conditioning, considering both capital and operating costs and including existing household grants that range from $5,000 to $12,000. Heat pumps are two to five times more efficient than gas furnaces, providing substantial savings while helping keep homes warm in winter and cool in summer. Analysis by BC Hydro compares the cost of zero-emission vehicles to gas vehicles, including purchase cost, fuel cost and upkeep cost, and even with a higher upfront purchase cost, zero-emission vehicles are often a more economical option. As an example, the cost to drive 20,000 km per year can average $3,340 in a gas-powered vehicle, based on 2021 gas prices, whereas the equivalent electricity costs for an electric vehicle would be about $478 per year, and not subject to the same degree of price fluctuation as with gas.

However, the upfront costs of a new heating system, new windows, or an electric vehicle are a barrier for many families. This is being addressed in two ways. First, the uptake will happen over time, enabling families to replace their fossil fuel-reliant equipment with electric when needed. No one has to purchase an electric car right now. But in the future when you need a new car, and are going to have that expense regardless, cheaper and more reliable electric cars will likely be available. Second, measures are in place to help families, especially low-income families, purchase equipment sooner so they can begin to realize cost savings sooner while helping reduce emissions. One example is the recently announced Oil to Heat Pump Affordability Program (OHPA) that would make the average heat pump free for low to median income families. A summary of Canada’s 2030 ERP measures is provided in Chapter 2 and a full list of measures is in Chapter 6.

As the Canadian Climate Institute concluded in their report Damage Control: Reducing the Costs of Climate Impacts in Canada (PDF), climate change is itself an affordability risk for households in Canada, and especially for vulnerable populations. Evidence indicates that households will pay the highest price for climate impacts, with low-income households being hardest hit. The impacts are already materializing, with a drop in income per capita of $720 expected by 2025, rising to $1,890 per capita by mid-century in a low-emissions scenario and almost $2,300 per capita in a high-emissions scenario. Low-income households will be most affected, facing income cuts of 23% in a high‑emissions scenario by the end of century. The Institute concluded that a combination of proactive adaptation measures and global emissions reductions will be the most effective in mitigating damages, reducing Canada’s total real GDP losses by 75%.

1.3.4 Avoiding the costs of climate change

Climate change is already increasing the number of acute, high-impact weather- and climate-related events in Canada resulting in costs to individuals, households, communities, business, and governments. As noted in the National Adaptation Strategy released in June 2023:

• Extreme heat events are the deadliest weather-related events in the country. For instance, the 2021 heat dome resulted in at least 619 deaths in British Columbia.
• Floods are one of the most costly and widespread hazards, with annual coastal flood damage to buildings and homes projected to increase from $60 to $300 million in the next 30 years.
• Wildfires increasingly threaten communities, infrastructure, and industry. Wildfire smoke can disperse over large areas affecting human health near and far. In addition to direct costs combating wildfires (about $1 billion per year), indirect costs from property loss, industrial shutdowns, health-related expenses, etc., are expected to rise in Canada.
• The increasing rate, severity and unpredictability of climate-related natural disasters are straining Canada’s emergency response systems, and impacting the reliability of supply chains, putting our food security and livelihoods at risk.

There are many ways to measure the costs of climate change (Table 1-1). While some costs are covered by insurance, many uninsured costs are borne by homeowners, communities, businesses, and governments. Insurance usually covers direct costs, leaving those unable to get to work or businesses that cannot open without support. Increasingly, there is more attention on the non-market costs of climate change, such as impacts to the health care system from increased physical and mental health costs.

There are two ways to avoid the costs of climate change: mitigation of emissions and becoming more resilient to climate impacts through adaptation measures. This report outlines the steps we are taking to mitigate emissions domestically, which, as the eleventh largest emitter in the world, contributes greatly towards achieving the goal of the Paris Agreement to limit global temperature change to 1.5°C. The Government of Canada also released the National Adaptation Strategy in 2023, a whole of society approach to reducing vulnerabilities and increasing adaptive capacity to climate change.

1.4 Climate adaptation: preparing for impacts

The mitigation policies discussed in this report aim to reduce emissions in an effort to reduce climate impacts. Adaptation measures aim to reduce people’s vulnerabilities and increase their resilience to the floods, fires, drought, and other climate impacts we are experiencing today.

In June 2023, the Government of Canada released the National Adaptation Strategy, which sets the direction for whole-of-society efforts to better prepare for the impacts of climate change. The Strategy outlines long-term goals, medium-term objectives and near-term targets for five interconnected systems—disaster resilience, health and well-being, nature and biodiversity, infrastructure, and economy and workers. The Strategy also identifies foundational actions that crosscut these five systems and are necessary to support effective adaptation (e.g., developing evidence-based knowledge on how the climate is changing and the impacts on communities). The Strategy’s implementation will further be underpinned by a set of guiding principles, emphasizing the need for respecting jurisdiction, upholding the rights of Indigenous Peoples, ensuring equity and support for the most vulnerable, taking proactive and integrated risk-based actions, and maximizing benefits across society while reducing maladaptation.

All of us across the country—governments, Indigenous Peoples, the private sector, civil society, communities, and individuals—need to take action to create a more climate-resilient Canada. The implementation of the National Adaptation Strategy will be supported by a number of action plans, including the Government of Canada Adaptation Action Plan, which outlines the federal contributions to the Strategy’s goals, objectives and targets. Provincial, territorial, municipal, and sectoral strategies and action plans will also advance the implementation of the Strategy. In addition, Indigenous Peoples are on the front lines of the response to climate change, as First Nations, Inuit, and Métis are experiencing disproportionate impacts of climate change while leading climate action both within Canada and globally. This includes advancing responses to climate change that draw on Indigenous Science and Knowledge systems and are based on Indigenous stewardship of lands and waters. The Indigenous Climate Leadership Agenda will be a key mechanism for advancing Indigenous-led and self-determined climate change adaptation and mitigation action.

Implementation of Canada’s first National Adaptation Strategy presents an opportunity to coordinate efforts to reduce vulnerability and increase resilience across the country, with an emphasis on the most vulnerable. As implementation of the Strategy proceeds, regular reporting will outline progress on the state of climate resiliency in Canada.

1.5 The role of science in combatting climate change

Scientific research is fundamental to understanding climate change and its impacts on Canadians and their health, environment, and communities. Science informs climate mitigation and adaptation measures, and assesses the effectiveness of actions that have been taken. Each year, Canada prepares a National Inventory Report (NIR) to report Canada’s GHG emissions estimates and tracks emissions from individual facilities through its Greenhouse Gas Reporting Program (GHGRP). The NIR serves as the fundamental basis for informing policy decisions and developing Canada’s regulatory regime. Atmospheric measurements from the ground, aircraft, and satellites are increasingly being explored to improve the validity and robustness of emissions estimates. This information upholds the credibility of Canada’s emissions estimates and improves capacity to track Canada’s emissions reductions over time.

Climate emergency and air quality warnings to protect Canadians and their communities—like the air quality alerts issued because of the devastating 2023 wildfire season—depend on federal government science, monitoring, and air quality forecasting. In 2023, there were three to five times more air quality alerts than any other year between 2017 and 2022. Without this information, the lives and the health of Canadians may be put at risk, from immediate asthma attacks to chronic health problems related to long-term exposure to air pollution. Canada’s Changing Climate Report (2019) assessed the state of knowledge on how and why Canada’s climate has changed and what changes are projected for the future.⁹ It found that both past and future warming in Canada is, on average, about double the magnitude of warming globally. In the Arctic, the rate of warming is now three to four times the global average. Climate science allows us to monitor and report on current conditions and project future climate conditions to better predict and respond to these changes and understand their underlying causes and potential impacts.

Biologically diverse ecosystems are more resilient to the adverse effects of climate change. Scientific research on nature-based solutions and the natural carbon cycle can play a vital role in Canada’s future ability to mitigate GHG emissions and adapt to climate-change impacts. Climate change also impacts the quality and quantity of freshwater. Scientific monitoring, modelling, and analysis inform hydrological predictions and preparation for extreme events like flooding. They also inform water management decisions related to water supply and demand, contaminant levels, and recreational use. Ongoing advancement and mobilization of knowledge, data, and tools are essential to make informed decisions with respect to identifying the climate actions necessary to respond to the risks and impacts we are experiencing now and will experience in the future.

Science and knowledge, inclusive of the full range of Western natural, social, and health science and Indigenous science and knowledge systems, is crucial to guiding and informing the most effective climate actions to reduce GHG emissions, minimize risks for health and our natural environment, and increase resilience across the country. Efforts need to continue to build relationships that bridge, braid, and weave Indigenous and Western science and knowledge systems to inform and enhance decision‑making. As scientific understanding continues to advance and evolve, it will help identify, inform, and assist with the implementation of new approaches to meeting Canada’s climate targets, protect Canadians and their communities, and evaluate the progress to date.

A National Priorities for Climate Change Science and Knowledge report is planned for publication in early 2024, which will summarize the most important scientific research and data needs that Canada’s science community should undertake to help us better evaluate climate change and plan for its impacts.

1.6 How Canada assesses progress

Canada’s established methodology for reporting on progress toward emissions reduction targets considers (1) historical greenhouse gas emissions and (2) greenhouse gas emissions projections, which are both indicators within the Canadian Environmental Sustainability Indicators (CESI) program, indicators under the Federal Sustainable Development Strategy (FSDS), and consistent with UNFCCC reporting guidelines. This approach for assessing progress is confirmed within the CNZEAA, further specifying that the most recently published data must be used.

Canada reports on progress domestically under the CNZEAA and the Federal Sustainable Development Strategy and internationally through the UNFCCC biennial reports, UNFCCC biennial transparency reports, and United Nations Sustainable Development Goals (UN SDGs). This ERP Progress Report fulfills requirements laid out in the CNZEAA. For more on Canada’s emissions reporting, see Chapter 5.

1.6.1 Indicators of progress

The primary means through which Canada will assess achievement of its target is through emissions in the target year. This 2023 Progress Report includes several measures to assess progress toward Canada's GHG emissions reduction target, including:

• Emissions trajectory: The emissions trajectory often combines historical and projected emissions. Historical emissions describe the path we have taken. Emissions projections indicate where we think emissions will be in the future, based on the best available information. The emissions trajectory, including historical and projected emissions, illustrates the expected peak of emissions and the pattern of emissions change. In other words, it shows if we are headed in the right direction and where we expect emissions to be in the target year.
• GHG intensity: The ratio of GHG emissions and unit of GDP. GHG emissions intensity indicates how closely linked emissions are to economic growth. The decoupling of emissions from economic growth is an essential step toward achieving emissions reductions while maintaining economic prosperity.
• Implementation of measures: The assessment of implementation status for each ERP measure, using an assessment grid.

1.6.2 Historical emissions

Historical GHG emissions are presented in Canada’s NIR, which is submitted to the UNFCCC in April each year. Canada’s most recent submission in April 2023 included emissions data covering the period 1990 to 2021. Canada’s emissions inventory is prepared according to UNFCCC reporting guidelines for national GHG inventories. The reporting guidelines require Annex I Parties, which includes Canada, to develop their national inventories using the 2006 Intergovernmental Panel on Climate Change (IPCC) Guidelines for National Greenhouse Gas Inventories. The reporting guidelines also require inventory reports to provide detailed and complete information on estimates development, including the formal arrangements supporting their preparation and any significant changes to inventory preparation and submission procedures. The reporting guidelines also commit Parties to improve the quality of emissions and removal estimates on an ongoing basis.

Emissions reductions often do not follow a linear path, as there is usually a ramping up period between when an initiative is first implemented and when emissions reductions are fully realized, limiting how much can be determined from the historical emissions trajectory. For example, the GHG reductions from regulations and programs designed to incent the uptake of electric vehicles are not realized the year they are put in place. It can take several years for regulations to come into force and programs to be fully implemented. To consider what could happen, future emissions trajectories are projected.

1.6.3 Emissions projections

Emissions projections are a valued tool to estimate future GHG emissions. They are used to establish a baseline scenario and inform the development of emissions targets, assess progress toward the target, and estimate the impact of measures on future GHG emissions. Projections are an estimate based on best available information at the time that they are developed. Projections are expected to change over time in response to new climate actions, revisions to historical emissions estimates, improvements in estimation methodology, and in response to new information in the changing domestic and global context such as economic conditions and energy demand.

Emissions projections are prepared annually and submitted to the UNFCCC every two years as part of Canada’s biennial report to the UNFCCC. Canada last submitted emissions projections to the UNFCCC in December 2022, with Canada’s Eighth National Communication and Fifth Biennial Report, which included emissions projections to 2035. In non-UNFCCC reporting years, projections are published as a standalone report by ECCC as Canada’s Greenhouse Gas and Air Pollutant Emissions Projections Report. Canada’s most recent emissions projections report was published in December 2023. Canada’s emissions projections are developed in line with recognized best practices and incorporate IPCC standards for estimating GHG emissions across different fuels and processes. These standards are continually being improved upon. In addition, Canada relies on outside expert views and the most up‑to-date data available for key drivers such as economic growth, energy prices, and energy demand and supply. Finally, Canada applies an internationally recognized energy and macroeconomic modelling framework in the estimation of emissions and economic interactions.

When developing emissions projections, Canada includes both a “reference” scenario (referred to in UNFCCC submissions as the “with measures” or WM scenario) and an “Additional Measures” scenario (referred to in UNFCCC submissions as “with additional measures” or WAM scenario). According to international guidelines, the reference scenario includes all policies and measures funded, legislated, and implemented by federal, provincial, and territorial governments up to the designated cut-off date. The Additional Measures scenario accounts for those additional policies and measures that are under development and for which there is enough information for the policies and measures to be modelled. It is the Additional Measures scenario that is referenced throughout this report, as it best represents progress to Canada’s 2030 target and captures the impact of Canada’s climate policies.

Even though every effort is made to be as complete as possible in what is included in the model, the Additional Measures scenario does not include all announced measures. Measures that have not been sufficiently developed to support their inclusion in the model, as of the cut-off date for completion of the annual modelling cycle, are not reflected in the Additional Measures scenario. The cut-off time for preparation of the projections scenarios is typically two to three months in advance of publication of the projections. Measures are not included when there are important decisions yet to be confirmed that would impact the emissions reductions associated with the measure. For the 2023 projections cycle, the cut-off date for new measures was August 2023. Measures not included in the model update for 2023 include elements of the Canada Green Buildings Strategy. Measures that are being considered or are under development by the provinces and territories are only included if these measures have been identified by the jurisdiction for inclusion in the model by the cut-off point, with sufficient detail to be included. Conversely, measures that had previously been included based on announced timelines and approach may require adjustment if measures do not advance as originally expected.

1.6.4 Accounting for uncertainty

Canada’s GHG emissions projections are based on the current economic structure and policy context subject to future changes that will occur in government policy, energy supply, demand and technology, or domestic and international economic and political events. A series of plausible assumptions are made regarding, among others, population and economic growth, prices, demand and supply of energy, and the evolution of technologies. Given the uncertainty inherent in projecting into the future, emissions projections should be seen as one estimate within a set of possible emissions outcomes over the projection period. Scenarios and sensitivity analyses are used to explore the potential impacts of these assumptions. An overview of the assumptions used in the 2023 projections can be found in Chapter 5. The detailed description of assumptions and the results of the sensitivity analysis is available in Canada’s Greenhouse Gas and Air Pollutant Emissions Projections 2023.

The Energy, Emissions and Economy Model for Canada (E3MC) is used to generate Canada’s economy-wide emissions projections and is also often used for the analysis of various policies and regulations, depending on whether it has sufficient level of granularity and model features required to analyse a policy or regulation in question. Nevertheless, throughout policy development, ECCC does not rely solely on the E3MC, because different modelling tools could be used to provide the best analytical insight about the different features or parameters of the proposed measure. Different modelling approaches could produce different modelling results, that are still informative and could be used in specific circumstances. For more information, see Canada’s approach to prepare emissions projections.

For those wanting to learn more about projections and international best practices, the UNFCCC is an important source of information. One example of the materials available to learn more is an introductory guide for practitioners (PDF) on emissions projections developed by Germany to support UNFCCC efforts related to new reporting requirements under the Paris Agreement’s Enhanced Transparency Framework. For Canada, an Energy Modelling Hub was established in 2022 to foster ongoing dialogue among Canadian energy system modellers, policy makers, and stakeholders. In 2023, the Government of Canada announced funding support for three energy modelling projects with leading organizations across Canada to expand the evidence base for net-zero pathways in Canada.

ECCC convened an expert-led process to provide independent advice on ensuring a robust and reliable modelling regime that maximizes transparency and addresses the inherent uncertainties in all modelling processes. A summary of the modelling review outcomes is provided in Section 5.5. See the Emissions Projections Report for more on the independent modelling review action plan.

For more on Canada’s emissions reporting and the Government of Canada’s commitment to continuous improvement of Canada’s inventory estimates and emissions projections, see Chapter 5 in Part II of this report.

Chapter 2: Progress update

This chapter provides an update on progress toward the 2026 interim objective and 2030 target with reference to Canada’s most recent NIR and most recently published emissions projections (see Part II of this report for more information on Canada’s emissions reporting).

To provide insight on the actions that are contributing to Canada’s trajectory of declining emissions, this chapter also provides an overview of the implementation status of measures to date and some of the work that is forthcoming. Section 2.2 provides a summary of the status of the 149 ERP measures and an overview of some of the key measures that are well under way or implemented. Section 2.3 looks ahead to the measures that the Government of Canada has committed to exploring. Section 2.4 highlights examples where provinces, territories, Indigenous Peoples, and the private sector are demonstrating best practices and what can be done to help move Canada toward our target. Finally, Section 2.5 outlines the enabling measures that do not necessarily reduce emissions directly but that help society make the transition to a cleaner, more affordable, net-zero lifestyle.

2.1 Meeting Canada’s emissions target

Canada’s emissions target is 40% to 45% below 2005 levels by 2030, with an interim objective of 20% below 2005 levels by 2026. Based on the most recently published projections:

• Canada is on track to exceed the previous climate target of 30% below 2005 levels by 2030;
• Canada is on track to exceed 20% emissions reductions below 2005 levels by 2026; and,
• Additional efforts will be required to achieve Canada’s 2030 target.

Figure 2-1: Progression of Canada’s projected emissions in 2030 (Mt CO₂ eq)

Note: Percentage reductions are calculated here against the 2005 emissions as reported in the same year as the emissions projections were generated. Canada’s 2005 emissions level can change with each edition of the annual NIR, due to methodological improvements and revisions to source data. Percentage reductions can also be calculated based on the 2005 level from the current year NIR, yielding different values.

Canada has made substantial and enduring progress toward emissions reductions since the establishment of the Pan-Canadian Framework on Clean Growth and Climate Change with provinces and territories in 2016. Emissions projections are updated each year to account for new measures, to address changing conditions in the domestic and global economy, and to incorporate the historical emissions from the most recent NIR. The underlying data and methodology for estimating emissions are also revised over time in line with the principle of continuous improvement. For more on Canada’s emissions reporting, including recent changes to emissions projections modelling and the continuous improvement approach, see Chapter 5.

Based on data from Canada’s most recent NIR and Emissions Projections Report (EPR), Canada’s GHG emissions peaked in 2007. This represents a significant accomplishment, given that in 2015, as reported in Canada’s Second Biennial Report to the UNFCCC, Canada’s emissions were projected to be 2.2% above 2005 levels in 2020, and to continue to grow, reaching 9% above 2005 levels by 2030.¹ In contrast, the most recent NIR indicated that Canada’s 2020 emissions were 10% below 2005 levels, which does not include the accounting contribution from the LULUCF sector or credits purchased by Québec from California under the Western Climate Initiative (WCI). If the LULUCF and WCI contributions were included, Canada’s emissions are estimated to have fallen by about 16% below 2005 levels by 2020, very near to Canada’s 2020 target of 17%.

The most recent projections indicate that the modelled measures will result in emissions reductions of 21.7% below 2005 levels by 2026 and 36.2% below 2005 levels by 2030. Emissions continue to fall post 2030, on the road to net zero by 2050, falling by 42.2% below 2005 levels by 2035. According to these results, with the current measures announced, Canada is on track to significantly surpass the original 2030 target of 30% below 2005 levels, exceed the 2026 interim objective, but has more work to do to achieve the enhanced target of 40% to 45% below 2005 levels by 2030.

Figure 2-2: Canada’s projected emissions trajectory

The Government of Canada uses a combination of models and modelling approaches. The “bottom-up” approach uses a detailed simulation model that provides an estimate of emissions reductions from existing climate measures (additional measures scenario). Bottom-up projections are what is typically referred to when emissions projections are referenced. Under the “backcasting” approach, the model is used to identify potential reductions by sector in an economically efficient manner. Backcasting produces an illustrative scenario that is based on all policies and measures included in the bottom‑up approach and is calibrated to achieve the 2030 target of 40% below 2005 levels. Backcasting is not used to assess progress. It is, however, an important tool to support the consideration of where additional emissions reductions could be found. It can also be used to help account for policies and measures that are announced but that are not sufficiently developed to support their inclusion in the bottom-up modelling. The results from the backcasting scenario should not be interpreted as signaling policy intentions, but rather as an illustration of what the modelling framework suggests are economically efficient opportunities to reach pre‑determined emissions reductions.

The 2030 ERP used the combined bottom-up and backcasting approaches to provide one potential pathway across economic sectors to meet Canada’s 2030 target. Along with the updated bottom-up projections published in December 2023, the backcasting was also updated, identifying a path to meeting the 2030 target that takes into account recent developments. The revised path identifies the same sectors with the greatest potential as the 2030 ERP:

• the oil and gas sector, for which an emissions cap is under development alongside substantial other supports, including the new Carbon Capture, Utilization, and Storage Investment Tax Credit (ITC);
• the transportation sector, for which a number of initiatives are ongoing and for which additional opportunities are actively being explored;
• the heavy industry sector, which is benefiting from high levels of private sector investment and supported with major investments by federal and provincial governments to decarbonize and establish low-carbon industries in Canada; and,
• the buildings sector, which has had major investments in recent years to support the decarbonization of buildings, and for which the Canada Green Buildings Strategy is currently under development.

The path identified requires additional efforts between now and 2030, including full implementation of the measures already announced under the 2030 ERP and the development of new opportunities for further emissions reductions, particularly those that will help Canada’s low-carbon economy grow and support Canadians to prosper in a low-carbon future. The path to the target also requires that other orders of government and the private sector take action.

Figure 2-3: Pathway to 2030 (40% backcasting scenario)

^*NBCS/Agr. Measures refers to nature-based climate solutions and agriculture measures.

An overview of the bottom-up and backcasting results by sector is provided below. For more detailed information about Canada’s GHG emissions projections, including results from the backcasting scenario, please see the full version of Canada’s emissions projections report.

^* Agriculture emissions are not expected to show significant reductions in the backcasting scenario as process emissions from crop and animal production, which represent approximately 80% of the sector’s emissions, are exogenous to the modelling. Reductions associated with agriculture measures are included in the “LULUCF + NBCS/Agr. Measures” row.

Emissions projections are updated each year to account for new measures, to address changing conditions in the domestic and global economy, and to incorporate the updated historical emissions from the most recent NIR, including changes that result from methodological improvements to the NIR.

In the projections that were updated and submitted to the UNFCCC in December 2022, the main drivers of change leading to emissions increases were higher population growth expectations, higher forecasts for natural gas and liquefied natural gas production, changes in assumptions related to carbon capture and storage and solvents in the oil and gas sector, and revisions in the NIR that led to increases in the oil and gas sector methane emissions. Changes that led to lower emissions included changes to building sector methodology, lower expected GDP growth estimates, and agricultural sector revisions in the NIR. The net impact was an increase in projected 2030 emissions compared to the previous projections that were published as part of the 2030 ERP in March 2022.

For the 2023 projections, NIR revisions, LULUCF accounting changes, a lower natural gas production forecast, and methodological revisions to the model resulted in lower projected emissions. Higher industrial emissions intensities and revised policy assumptions related to the hydrogen strategy and the adoption of net-zero building codes by provinces and territories led to higher emissions. The net impact was a drop in projected 2030 emissions compared to the December 2022 projections.

For more on Canada’s emissions reporting, including an overview of the drivers for change, see Section 5.4 in Chapter 5. Detailed information can be found in Canada’s National Inventory Report and in Canada’s Emissions Projections Report.

Figure 2-4: Overview of main drivers for change in updated projections between the projections included in the 2030 ERP, the December 2022 projections, and the 2023 projections

2.2 Implementing the 2030 ERP: Highlighting recent climate action

Canada’s approach to climate action is organized on a sector-by-sector basis, while recognizing the interconnectedness among sectors. The entire Canadian economy has a role to play in reducing emissions. The sectors identified include economic sectors (buildings, electricity, heavy industry, oil and gas, transportation, agriculture, and waste), economy-wide measures that cut across sectors, and nature-based solutions, which look for opportunities to reduce emissions through nature, such as planting trees and conserving and enhancing other GHG sinks such as wetlands. An overview of how sectors are defined is included in the annex.

The Government of Canada has taken extensive action to reduce emissions, using the range of mechanisms available, including through regulations, funding support, procurement, research, and communications to inform actions being taken by others. There are 149 ERP measures which are categorized as: under exploration (1); under development (13); initiated (12); ongoing (108); adopted (9); and, concluded (6). Highlights are provided below, with a comprehensive implementation update on all of the 2030 ERP measures and strategies provided in Chapter 6, as well as information on how measures are categorized into the different implementation status types.

Figure 2-5: Implementation status of ERP measures

2.2.1 Economy-wide

Putting a price on carbon pollution continues to be a fundamental measure in Canada’s approach to climate action, with the minimum price set at $65 per tonne of CO₂ eq in 2023 and rising by $15 per year to $170 in 2030. The carbon price is estimated to be responsible for about a third of projected emissions reductions in 2030. Climate Action Incentive payments to households have increased since their introduction, reflecting the higher price on carbon pollution. Individuals and families in the provinces where the federal fuel charge applies are receiving these payments on a quarterly basis. The majority of households get more money back in Climate Action Incentive payments than the costs incurred from the federal carbon pricing system, and still have an incentive to reduce emissions.

The Government of Canada has established the Canada Growth Fund, a $15 billion arm’s length public investment vehicle that will help attract private capital to build Canada’s clean economy by using investment instruments that absorb certain risks to encourage private investment in low carbon projects, technologies, businesses, and supply chains. The first investment by the Canada Growth Fund was announced in October 2023. One of the investment tools the Canada Growth Fund will provide to support clean growth projects is contracts for difference.

Carbon contracts for difference will backstop the future price of carbon and provide predictability to businesses to de-risk important emissions reducing projects. The 2023 Fall Economic Statement announced that the Canada Growth Fund will be the principal federal entity issuing carbon contracts for difference. The Canada Growth Fund will allocate, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements. The Canada Growth Fund is already in the process of negotiating carbon contracts for difference with a number of project proponents across a range of sectors. The Canada Growth Fund’s carbon contracts for difference will also support the establishment of robust carbon credit markets.

Canada’s GHG Offset Credit System enables industries with hard-to-abate emissions to purchase emissions reductions from other sources. This extends the carbon price signal and creates opportunities for foresters, farmers, Indigenous communities, and other project developers to earn revenue by selling GHG offsets. At the same time, the availability of offset credits is expected to help stimulate innovation and private sector investment. The Canadian Greenhouse Gas Offset Credit System Regulations were published in June 2022 and the Government of Canada is continuing to develop offset protocols, which set out the requirements for particular offset project types.

The Low Carbon Economy Fund (LCEF) leverages further climate actions from provinces and territories, municipalities, universities, colleges, schools, hospitals, businesses, not-for-profit organizations, and Indigenous governments, communities, and representative organizations by providing funding for decarbonization initiatives and programs. There are four streams in the LCEF: Leadership Fund for provinces and territories; Challenge Fund for business and not for profit organizations; Indigenous Leadership Fund; and, Implementation Readiness Fund.

The Clean Fuel Regulations set increasingly stringent requirements on producers and importers of fossil fuels to reduce the carbon intensity of gasoline and diesel used in Canada. This reduces emissions while also creating economic opportunities in the development and use of clean fuel alternatives. The Clean Fuel Regulations were published in Canada Gazette, Part II, in July 2022, and the reduction requirements came into force in July 2023.

Measured over a 20-year period, methane is 80 times more potent than carbon dioxide (CO₂). As such, reducing methane from the oil and gas sector and landfills continues to be a prerequisite for Canada to meet its climate targets. To this end, the Government of Canada released Canada’s Methane Strategy in September 2022 with the objective of reducing domestic methane emissions by more than 35% by 2030, compared to 2020 levels, consolidating Canada’s leading role in this area. As part of the Strategy, Canada recently released draft methane regulations for consultation that aim to reduce methane emissions from the oil and gas sector by at least 75% below 2012 levels by 2030.

The Government of Canada is implementing the Carbon Management Strategy, released in September 2023. Carbon management—a range of approaches to capture CO₂ to be durably stored or reused. This includes technologies removing carbon from point sources, such as power generation or industrial plants, or direct air capture, bioenergy with carbon capture and storage (BECCS) or other carbon dioxide removal technologies that remove CO₂. According to the IPCC and the International Energy Agency, there is no credible path to net-zero emissions without carbon management technologies. Their deployment must be rapid and immense, scaling up by nearly 200 times by 2050.² Other benefits include innovation and employment opportunities. These innovative technologies are being developed and implemented around the world, including in Canada. The Government is implementing supports to build on Canada’s early leadership in this area, including through the Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit, Canada’s GHG Offset Credit System, and direct support for technology RD&D.

2.2.2 Buildings

The Canada Green Buildings Strategy is an overarching vision for decarbonizing existing and new buildings in Canada, seeking to mobilize national action to create a net-zero emissions buildings sector by 2050, while increasing resiliency. The Strategy will focus on increasing the rate of building retrofits, ensuring buildings are resilient and net-zero-ready from the start, and on transforming space and water heating. Two key initiatives supporting the Canada Green Buildings Strategy—the Codes Acceleration Fund and the Deep Retrofit Accelerator Initiative—were launched in early 2023. The Oil to Heat Pump Affordability (OHPA) Grant also launched in 2023. A Discussion Paper on the Canada Green Buildings Strategy was shared for public consultations in 2022 and a What We Heard Report and Summary of Engagement with Indigenous partners were released in July 2023.

2.2.3 Electricity

Regulations are in place to phase out unabated coal-fired electricity generation by 2030. Complementary regulations are also in place to ensure only well-performing natural gas generation is built. Additional funding programs and incentives are de-risking and supporting capital projects such as smart electrification, renewable energy development and deployment, as well as energy transitions in rural, remote, and Indigenous communities. The Government of Canada has committed to achieving a net-zero electricity grid by 2035 and has provided a suite of measures, including billions in funding, to support the achievement of this objective. In light of similar commitments made by the United States and other G7 countries, to remain competitive internationally and to support the growing demand for the electrification of the Canadian economy, the Clean Electricity Regulations (CER) were proposed to provide an early signal to ensure that this transition is clean. The draft CER were published in August 2023 for a 75-day comment period. The CER provide considerable flexibility to electricity generators to determine the best way to transition to a clean grid while continuing to provide reliable and affordable energy to Canadians and their businesses. Powering Canada Forward, a vision for achieving an affordable and reliable net-zero electricity grid by 2035, was released in August 2023. It underscores the critical importance of decarbonizing Canada’s electricity systems as a step toward achieving net-zero emissions across the economy by 2050 and ensuring a prosperous future for Canadians. The paper is a call to action and invites Canadians to join a national dialogue on electricity that will inform the development of Canada’s first Clean Electricity Strategy to be released in 2024.

A Canada Electricity Advisory Council was established as an independent, electricity-sector focused, expert advisory body to provide advice to the Minister of Energy and Natural Resources to accelerate investment, and promote sustainable, affordable, and reliable electricity systems. The Council commenced its work in May 2023 and aims to submit a final report with their advice in spring 2024.

2.2.4 Heavy industry

The Strategic Innovation Fund – Net Zero Accelerator (SIF-NZA) is investing in projects to support Canada’s largest industrial GHG emitting sectors reduce emissions, help position them to be successful in the net-zero global economy of 2050, and assist in establishing Canada as a clean technology leader capitalizing on new growth opportunities, including a domestic battery ecosystem. Since its launch in 2021, the initiative has executed a number of contribution agreements in a wide array of sectors including fuel cell technologies, battery development, nuclear, steel, and electric vehicles. The Government of Canada worked with the Cement Association of Canada to develop the Standard on Embodied Carbon in Construction and the development of the data required to disclose and reduce the embodied carbon of ready-mixed concrete supplied to major federal government construction projects. The standard took effect on December 31, 2022, with all Government of Canada procurements that take affect after that date required to apply to the standard. Canada’s Critical Minerals Strategy was launched in December 2022 and a Critical Minerals Centre of Excellence has been established.

Jurisdictions across North America are competing for zero-emission vehicle (ZEV) and automotive supply chain investments. The Inflation Reduction Act (IRA) in the U.S., as well as its Advanced Manufacturing Tax Credit, are attractive incentives for firms to choose to anchor production in the U.S., and thereby pose a challenge to Canada’s ability to compete for North American battery investments. As a response, Canada has committed to provide production-based support via Special Contribution Agreements with select battery manufacturers (e.g., PowerCo, NextStar, and Northvolt). These investments stand to secure battery and EV manufacturing in Canada for decades to come.

2.2.5 Oil and gas

The Government of Canada is publishing a regulatory framework for a cap on emissions from the production of oil and gas in fall 2023. The cap will complement other measures such as the methane regulations, clean fuel standards, carbon pricing, and tax incentives (e.g., the Carbon Capture, Utilization, and Storage Investment Tax Credit), the SIF-NZA, and the Canada Growth Fund.

2.2.6 Transportation

The Government’s Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations requiring that all sales of new passenger cars and light trucks be ZEVs by 2035, with interim targets of at least 20% by 2026, and at least 60% by 2030.The Government is also developing similar requirements for on-road heavy-duty vehicles. Several initiatives complement these regulatory measures by helping to address barriers. For example, the Incentives for Zero-Emission Vehicles (iZEV) Program has contributed to the purchase of over 300,000 ZEVs since its launch in May 2019, and the Incentives for Medium- and Heavy-duty Zero-Emission Vehicles (iMHZEV) Program, launched in 2022, has processed over 1,000 incentive requests. The Zero-Emission Trucking Program (ZETP) is funding projects to capture data and firsthand experience on zero-emission truck performance in Canadian conditions and is helping accelerate the safe deployment of MHZEVs, including funding for testbeds and to support provinces and territories in the development, modernization, and alignment of codes, standards, and regulations for zero-emission trucking. 

2.2.7 Agriculture

The Government of Canada continues to implement ambitious action to support farmers and producers, to build resilience and reduce emissions through investments in climate-smart farming practices. In July 2022, the federal, provincial, and territorial Ministers of Agriculture reached an agreement in principle for the Sustainable Canadian Agricultural Partnership. As of August 2023, Agricultural Climate Solutions: On-Farm Climate Action Fund has distributed over $124.8 million through 13 projects, supporting farmers to adopt and implement immediate on-farm beneficial management practices that store carbon and reduce GHG emissions. The Agricultural Clean Technology Program provides funding for research, innovation and adoption of clean technology that will support a low carbon economy and drive sustainable growth in the agriculture sector. The Government of Canada has committed $470.7 million to this program over seven years, with over $79.2 million distributed as of October 2023.

2.2.8 Waste

The Government of Canada is implementing a comprehensive plan to reduce plastic pollution and move towards a circular plastics economy, including by working with provinces and territories to implement the Canada-wide Strategy and Action Plan on Zero Plastic Waste. A proposed regulatory framework for reducing methane emissions from landfills was released in April 2023, with draft regulations under development and planned for publication by winter 2024. Canada published an offset protocol for “Landfill Methane Recovery and Destruction” under Canada’s GHG offset system. Offset protocols are also available for use in BC (“Methane from Organic Waste Offset Protocol”), Alberta (“Landfill Gas Capture and Combustion” and “Aerobic Landfill Bioreactor”), and Québec (“Landfill Methane Reclamation and Destruction”).

2.2.9 Nature-based solutions

The Government of Canada continues to make progress toward conserving 25% of Canada’s lands and waters by 2025 and 30% by 2030, working closely with provinces and territories, Indigenous Peoples, municipalities and local governments, environmental non-governmental organizations (ENGOs), private land trusts and other partners.

Additional funding of $780 million in the Nature Smart Climate Solutions Fund, for a total of $1.4 billion, has been invested to deliver emissions reductions from nature-based climate solutions. Furthermore, the 2 Billion Trees program will invest up to $3.2 billion in tree planting efforts to support provinces, territories, third-party organizations (for-profit and not-for profit) and Indigenous organizations to support the Government of Canada’s commitment to plant two billion trees across the country. In 2022, the Canadian Council of Forest Ministers endorsed the Renewed Forest Bioeconomy Framework to accelerate development of the bioeconomy and maximize the forest sector’s contribution to net zero. The Framework builds on the recognition that emissions reductions can be achieved by increasing the use of wood in construction and by using waste and forest residuals to generate bioenergy and produce bioproducts that substitute for more emissions-intensive materials.

2.2.10 Greening government

The Government of Canada has committed to transition its operations to net-zero emissions and increase climate-resilience, while also reducing environmental impacts beyond carbon, including on waste, water and biodiversity. Led by the Centre for Greening Government of the Treasury Board of Canada Secretariat, the Government of Canada will ensure that Canada is a leader in government operations that are net‑zero, resilient and green. The Centre for Greening Government works closely with technical departments, such as NRCan, ECCC, NRC and PSPC, to provide expert advice and guidance to support departments in implementing the Greening Government Strategy.

Consistent with the Greening Government Strategy, all departments must develop a Carbon Neutral Portfolio Strategy to create a pathway to the complete decarbonization of departmental real property holdings. This includes assessing real property to ensure future needs are met and divest surplus assets, optimize the management and energy efficiency of buildings retained, and fuel switch to low carbon sources of energy.

In 2023, the Government of Canada released the Standard on Embodied Carbon in Construction which sets minimum requirements for the procurement of design and construction services. Companies bidding on federal government projects must meet the requirements of the standards to be considered. Embodied carbon forms a significant proportion of the whole life carbon emissions from construction projects. Major construction projects typically include the renovation or new construction of buildings or engineering assets.

The Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets requires companies bidding on federal projects over $25 million to disclose their GHG emissions and set reduction targets. Companies that join the Net-Zero Challenge or other recognized programs automatically meet the standard. This ensures the process for procurements over $25 million encourages suppliers to set a path to net zero.

2.3 Implementing the 2030 ERP: Opportunities for additional action

There are a number of measures that the Government of Canada has committed to that are still in the early stages of exploration, development, and implementation. These measures hold the potential to have significant impacts. This includes taking a collaborative approach so that both public dollars and private capital can be strategically directed with maximum effect to support economic growth, reconciliation, climate outcomes, diversity and equity, and the creation of sustainable jobs. For many of these initiatives, the Government of Canada has committed to consult widely—with provinces and territories, Indigenous Peoples, industry, and the Canadian public. How these initiatives will develop will depend in large part on what the Government hears from Canadians.

2.3.1 Economy-wide

Collaborate with provinces and territories—along with Indigenous partners and key stakeholders—to identify and accelerate the most promising clean-growth opportunities in each region; build clean energy projects; and, support workers in the global net-zero future.

Continue to explore additional ways to provide businesses certainty regarding the carbon pollution pricing trajectory, including potential legislative approaches and other new measures, in conjunction with provinces and territories.

Continue to explore how border carbon adjustments may fit into Canada’s broader climate strategy.

Guided by Canada’s Carbon Management Strategy, identify policies and programs to support accelerated innovation and scale-up of negative emissions technologies to offset hard-to-abate emissions sources.

As announced in the 2023 Fall Economic Statement, the Canada Growth Fund will be the principal federal entity issuing carbon contracts for difference—the Canada Growth Fund will allocate, on a priority basis, up to $7 billion of its current $15 billion in capital to issue all forms of contracts for difference and offtake agreements.

Complete the implementation of the new clean economy investment tax credits.

2.3.2 Buildings

Continue to develop the Canada Green Buildings Strategy to support a net-zero emissions and climate‑resilient buildings sector.

Work with the provinces and territories and other stakeholders to develop new code requirements to limit GHG emissions in new construction and for energy-efficient alterations to existing buildings.

Explore the potential to update energy and GHG performance standards in federally funded homes and buildings programs.

Explore further opportunities to minimize embodied emissions from the built environment.

2.3.3 Electricity

Engage with provinces, territories, and others to develop the design and implementation details of the Clean Electricity Investment Tax Credit.

Building on the release of Powering Canada Forward: Building a Clean, Affordable and Reliable Electricity System for Every Region of Canada, Canada remains committed to releasing its first Clean Electricity Strategy in 2024.

2.3.4 Heavy Industry

Given the multiple linkages between this sector and others, measures in other sectors will also be important for how emissions can be reduced in the heavy industry sector:

• Canada’s Carbon Management Strategy;
• Efforts to address embodied carbon in Canadian infrastructure projects through the investments of the National Research Council to develop tools, solutions, and resources to decarbonize the construction sector;
• Greening Government Strategy green procurement commitments and efforts to create demand for clean technologies; and,
• Supporting the availability of clean electricity.

Explore opportunities to advance industrial decarbonization, including the potential to articulate a coordinated approach to accelerating industry’s adoption of clean technologies and fuels.

Continue to support industry on the road to net zero and promote clean economic growth through the Strategic Innovation Fund and the Canada Growth Fund, providing significant funding and other forms of financial support to develop and adopt new low‑carbon technologies and processes.

2.3.5 Oil and Gas

Continue to implement regulations that are addressing emissions in the sector, including carbon pricing, methane regulations, and the Clean Fuel Regulations.

Develop and implement a national cap on emissions from the production of oil and gas.

Provide financial supports for decarbonization activities in the oil and gas sector, including through the CCUS Investment Tax Credit.

2.3.6 Transportation

Deliver on the commitment to permanently fund public transit.

Consider opportunities stemming from engagement with biofuels’ stakeholders.

Continue to develop and implement climate plans for marine, rail, and aviation sectors.

Explore opportunities to accelerate the turnover of older, higher-emitting on-road vehicles.

Explore opportunities to deploy charging and hydrogen stations for medium- and heavy-duty ZEVs.

Explore opportunities to accelerate development of an off-road decarbonization strategy to transition to zero-emission equipment, machines, and zero-emission and/or low carbon fuels.

Advance the development of a Sustainable Aviation Fuels (SAF) Blueprint.

Examine options for the development of a new blueprint for a sustainable, net-zero transportation system by 2050 that takes an integrated transportation sector approach, ensures coordination across governments and stakeholders, and supports low-emitting modes where appropriate.

Explore the potential to expand the Incentives for Zero Emission Vehicles (iZEV) program to include used vehicles, building off the recent expansion of the program to enhance access to more incentives for car‑sharing fleets.

Explore the potential to expand incentives for medium- and heavy-duty ZEVs to other specialty vehicles/off-road equipment used at transportation hubs (such as airports, ports).

2.3.7 Agriculture

Develop the Sustainable Agriculture Strategy, which will help set a shared direction for collective action to reduce emissions and improve environmental performance in the sector over the long-term.

Explore various approaches to help promote the sustainability of the agriculture sector, increase clean technology use in Canada, and address barriers of adoption/extension and knowledge transfer of emissions-reducing technologies on farms.

2.3.8 Greening government

Building on recent achievements to strengthen the Policy on Green Procurement with the completion of two new standards, the Standard on Embodied Carbon in Construction and the Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets, attention will focus on the effective implementation of these standards, working with companies bidding on federal contracts.

Continue the implementation of the Government of Canada’s Greening Government Strategy to demonstrate leadership while exploring the potential for new measures that could contribute towards the Government of Canada’s targets related to net-zero emissions and climate-resilient operations. Short-term opportunities include procurement of clean electricity, low-carbon fuels, and zero-emission vehicles, as well as climate risk assessment of operations.

2.4 Actions being taken across Canada

The Government of Canada recognizes that achieving Canada’s emissions target requires efforts across society and the economy. Many are already stepping up to do their part, but more is needed. In addition to those actions that the Government of Canada is pursuing, provinces and territories, municipalities, Indigenous Peoples and the private sector have important roles and responsibilities. This section provides highlights of what is being done by others and uses examples of successful projects to illustrate how other governments and sectors can increase their ambition. The whole of society approach is explored further in Chapter 3, and overviews of each province and territory are provided in Chapter 7.

Figure 2-6: Achieving Canada’s 2030 emissions reductions

2.4.1 Economy-wide

The private sector makes investment decisions and provinces and territories help establish a business environment that incentivizes investments towards decarbonization. A number of provinces and territories have developed their own carbon pricing systems and are considering how they can support emissions reductions opportunities that best suit their jurisdiction. The private sector is making investments to reduce emissions and pursue low-carbon opportunities, including in hydrogen production.

2.4.2 Buildings

Provinces and territories are responsible for the adoption of building codes and have authority over municipal government affairs. Municipalities have responsibilities related to zoning and building, and have considerable scope to support homeowners to pursue deep retrofits. The private sector and individuals make purchasing decisions that have enduring impacts given the long-term nature of building stock.

2.4.3 Electricity

While the federal government has the authority to regulate GHG emissions, provinces and territories have a key role in electricity planning and operation. Furthermore, several utilities are provincially owned Crown corporations. In other jurisdictions, utilities are privately owned, but are regulated by provincial utility regimes. Municipal governments also have an important role, with ownership of utilities in some jurisdictions (i.e., Ontario), and decision-making related to zoning. As well, Indigenous communities continue to implement innovative solutions to support a robust transition to clean electricity.

2.4.4 Heavy Industry

Heavy industry operates in a global marketplace and is facing increasing market pressure to account for and reduce their Scope 1, 2 and 3 emissions.

2.4.5 Oil and Gas

Provinces and territories and industry all have pivotal roles to play in ensuring emissions reductions from oil and gas production. Indigenous Peoples are also important partners, recognizing the impacts of oil and gas development and given the role of Indigenous Peoples through ownership and benefit sharing agreements.

2.4.6 Transportation

Consumers can replace their gas and diesel-fueled cars and trucks with zero-emission vehicles (ZEVs). Freight companies, municipalities, transit agencies, and school districts can modernize their fleets with zero-emission trucks and buses. And municipalities and provinces can design efficient public transit infrastructure and take an approach to planning that supports low-emissions transportation solutions, such as locating high-density housing near transit hubs. Addressing ZEV affordability and the availability of charging stations, transitioning to clean fuels, and promoting the uptake of zero-emissions technologies for off-road vehicles and equipment, are some examples of how emissions reductions can be achieved in this sector.

2.4.7 Agriculture

Federal, provincial, and territorial governments work closely to promote emissions reductions in the sector, while also supporting the competitiveness of Canadian farms and their contribution to domestic and global food security. A recent study by RBC, the BCG Centre for Canada’s Future, and Arrell Food Institute, reported that annual research and development budgets from Canadian agriculture businesses have at least doubled since 2015, but more investment is required to achieve the sector’s emissions reduction potential, which by their estimate could be as high as 40% by 2050.¹² According to this report, a key challenge for the sector will be the development and widespread adoption of transformative technologies, including precision fertilization, anaerobic digesters, and biotechnology that supports agricultural resilience against disease and extreme weather events. When considering emissions from agriculture and opportunities for emissions reductions, it is important to include not only those emissions related to production of crops and livestock, but also emissions from on-farm fuel use and emissions and removals from agricultural soils (for more on considerations for how emissions related to the agriculture sector are reported on, see Annex 1).

2.4.8 Waste

Waste management falls under the jurisdiction of provinces and territories, while the collection, diversion, and disposal of waste are typically managed by municipal authorities or private firms. A number of provinces, territories and municipalities are active in the waste sector, particularly to manage related issues such as landfill capacity.

2.4.9 Nature-based solutions

Indigenous Peoples play a leading role. Indigenous Science, knowledge, experiences, perspectives, and rights are essential components to building effective climate change strategies. Municipalities have the ability to preserve local carbon sinks through effective land-use planning. Provinces and territories have jurisdiction over the vast majority of the country’s forests and management decisions related to forested lands. Private landowners also have an important role in making decisions on how their land is managed.

2.5 Enabling measures

In addition to measures that directly address emissions, enabling measures support Canada’s efforts to reduce GHG emissions through technology development and deployment, innovative financing, and by building the skills required for a low-carbon economy and to support workers. Enabling measures are not expected to generate emissions reductions directly but will support emissions reductions in indirect ways and are recognized as important to achieving Canada’s climate mitigation objectives; or are expected to generate emissions reductions, but those reductions are accounted for in one or more economic sectors (e.g., clean technologies that support emissions reductions in agriculture, heavy industry, electricity, etc.). While there may not be GHG emissions reductions directly associated with enabling measures in all cases, the Canadian climate change mitigation story would be incomplete without them.

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. This is why the Government of Canada is developing a “climate lens” that will take into account climate and economic considerations to inform policy development and government decision-making across federal departments. The Integrated Climate Lens was launched in the fall of 2021 and has been piloted in key departments to ensure that climate-related and economic considerations have informed major policy, program and funding decisions. Building on the lessons from the pilot, work is ongoing to ensure that climate, biodiversity and other key environmental considerations are further included in a consistent manner in decision documents from federal departments and agencies.

2.5.1 Clean technology and climate innovation

Accelerated development and adoption of clean technologies across all economic sectors will be necessary to meet Canada’s climate commitments, shifting from carbon-intensive technologies to those that can significantly reduce or eliminate GHG emissions from processes and practices.

There are numerous challenges that impact the pace and scale of clean technology adoption and innovation. Clean technologies can be more expensive, incurring higher capital costs than their equivalent emissions-intensive options, which means a mix of incentives, carbon pricing, and/or regulations are needed to encourage sufficient private sector investment and public uptake. Given the relatively early stage of the transition in most sectors, clean technologies are also confronted by uneven supply chains and enabling infrastructure; these require time to build out before widespread adoption and cost reductions can take hold. Moreover, there tends to be a general lack of awareness among stakeholders about clean technology solutions or the necessity of shifting towards them.

The Government of Canada has made significant investments since 2016 to overcome these challenges and accelerate clean technology deployment and development, with investments of over $120 billion in clean growth and other emissions reduction measures. Prominent federal measures, such as the Canada Growth Fund, the Strategic Innovation Fund – Net Zero Accelerator, the Energy Innovation Program and the Low Carbon Economy Fund, are propelling clean technology research, development and demonstration (RD&D) in emerging innovations and de-risking investment in clean technology deployment to guide decarbonization across industries. Underlying regulations and investment tax credits are also providing clear signals across the innovation continuum. Beyond this, the Government continues to undertake numerous enabling actions to encourage clean technology development and adoption, including the activities of the Clean Growth Hub, Clean Technology Data Strategy, and Clean Technology and Climate Innovation Strategy.

The support to date from the Government of Canada, provinces and the private sector is supporting the development of critical technologies, but not to the point of market saturation where supports are no longer needed. The Government of Canada estimates that between $125 to $140 billion in annual private and public investment across all levels of government is needed to reach net zero by 2050, but currently, only $15 to $25 billion is being invested each year. Given the fiscal support already provided by the Government of Canada, it is increasingly important for business, investment, and financial sector leaders to respond to the strong market signals that have been put in place.

Figure 2-8 Accelerating clean technology development and adoption in Canada

2.5.2 Sustainable finance

Promoting low-carbon investments from the private sector to accelerate the transition to a green economy remains a priority in Canada. To this end, the federal government, in collaboration with federal and provincial financial regulators and financial experts, has been supporting the development of the market infrastructure needed to mobilize low-carbon investments in Canada. This includes climate-related financial disclosure to ensure risk is transparent to investors, taxonomy and net-zero capital allocation strategies to guide green and transition investments, and Federal Green Bonds to help finance the transition to net zero.

Climate-related financial disclosure is a critical element of sustainable finance that has seen progress since the release of the 2030 ERP. In March 2023, the Office of the Superintendent of Financial Institutions (OSFI) published their Guideline on Climate Risk Management, which establishes OSFI’s expectations related to the federally regulated financial institutions’ management of climate-related risks, including on governance and financial disclosures. This guideline is expected to be effective starting in 2024, with a gradually phased-in approach.

The Sustainable Finance Action Council (SFAC), which includes a broad representation of Canadian banks, insurance companies and pension funds, provided recommendations to the federal government on advancing climate-related disclosures in Canada. To expand the coverage of mandatory climate disclosures, the 2023 Fall Economic Statement announced that the Department of Finance; Innovation, Science and Economic Development Canada; and Environment and Climate Change Canada will develop options for making climate disclosures mandatory for private companies.

The SFAC also provided recommendations to the federal government on a Canadian green and transition taxonomy via its Taxonomy Roadmap Report submitted in November 2022. Building on this Report, the 2023 Fall Economic Statement announced that the Department of Finance will work with Environment and Climate Change Canada and Natural Resource Canada to undertake next steps, in consultation with regulators, the financial sector, industry and independent experts, to develop a taxonomy that is aligned with reaching net zero by 2050. In the coming months, the SFAC will provide additional advice to the federal government on strategies for aligning private sector capital with net zero, as well as on climate data and analytics.

Federal Green Bonds continue to be a key initiative that aims to mobilize capital in support of Canada’s climate and environmental objectives. Released in March 2022, Canada’s Green Bond Framework identifies expenditures that are eligible for allocation to a green bond, including in: clean transportation; living natural resources and land use; energy efficiency; terrestrial and aquatic biodiversity; renewable energy; climate change adaptation; sustainable water and wastewater management; circular economy-adapted products, production, technologies, and processes; and, pollution prevention and control. The Government of Canada successfully issued its inaugural 7.5-year, $5 billion green bond in March 2022 with the intent to issue additional green bonds in the near future.

2.5.3 Sustainable jobs, skills, and communities

The Government of Canada is committed to delivering a net-zero future that is equitable, fair, and inclusive. A net-zero emissions economy represents significant opportunities for Canadians—to secure and create jobs, to grow industries, and to lead the world with the resources and technologies it will need for generations to come. With highly skilled and dedicated workers, abundant access to the natural resources and energy sources critical for a net-zero future, and a thriving clean technology industry, Canada is uniquely positioned to seize the moment.

On June 15, 2023, the Government of Canada introduced Bill C-50, the Canadian Sustainable Jobs Act, which aims to facilitate and promote economic growth, the creation of sustainable jobs in Canada as the world advances toward a net-zero future. The bill puts workers and communities at the centre of federal policy and decision-making by establishing a framework for accountability, a governance structure and engagement mechanisms to guide effective federal action.

Subject to Parliamentary consideration, this bill would:

• Introduce guiding principles to strengthen our collective work at the federal level to create an equitable and inclusive future by supporting the creation of sustainable jobs while addressing climate action and energy security;
• Introduce a tripartite-plus Sustainable Jobs Partnership Council, tasked with providing perspectives and recommendations to government and conducting ongoing engagement with Canadians, including workers and communities, to ensure that the diverse voices of Canadians are heard and their views contribute to Canada’s sustainable jobs approach over time;
• Require the Government to publish Sustainable Job Action Plans every five years beginning in 2025 to ensure that the government will continue to play an active role in supporting workers and fostering the creation of sustainable jobs across the country in a way that is transparent and accountable to Canadians;
• Require the creation of a Sustainable Jobs Secretariat within the federal government to support the implementation of the proposed Act, support the Council and coordinate work across federal departments; and,
• Require the Governor in Council to designate a Responsible Minister with overall responsibility for the Act and fulfilment of its provisions, and to designate Specified Ministers whose portfolios require their substantive engagement and input on sustainable jobs measures and actions.

This legislation and interim Plan are the product of a comprehensive consultation process that took place over 2021–22, engaging provinces and territories, Indigenous groups, workers, key labour and industry partners, stakeholders and the Canadian public. It also took into consideration the recommendations of the Task Force on Just Transition for Canadian Coal Power Workers and Communities, as well as a report by the Commissioner of Environment and Sustainable Development.

The Government also offers a broad suite of programming to support jobseekers and workers of all ages and from a variety of socio-economic backgrounds, as well as employers, unions and training providers. Many of these programs, created in consultation with stakeholders, are already helping to advance sustainable jobs. They include:

• The Sectoral Workforce Solutions Program, a program that helps key sectors of the economy implement solutions to address their current and emerging workforce needs, recent investments of $145.9 million in nine projects that will help build talent for the green economy. Overall, the nine projects are expected to support over 24,000 Canadians and benefit approximately 2,100 employers across Canada.
• The Canadian Apprenticeship Strategy, which provides funding to help pre-apprentices, apprentices, employers, unions, and other organizations and tradespeople participate in apprenticeships and succeed in skilled trades careers. This includes recent investments to develop green skills training for workers in the trades under the sustainable jobs initiative.
• The Skills and Partnership Fund, a project-based fund that supports partnerships between Indigenous partners and industry employers to provide skills training for Indigenous Peoples in priority sectors, which include industries that support more efficient use and alternative sources of energy and resources. Through this Fund, Indigenous people are being trained for current and emerging job opportunities in the green economy.
• The Youth Employment and Skills Strategy, a horizontal initiative led by Employment and Social Development Canada and delivered in collaboration with 11 other federal departments, agencies and Crown corporations. The YESS provides funding to organizations to deliver a range of activities that help youth overcome barriers to employment and develop a broad range of skills and knowledge to participate in the current and future labour market. Some YESS programs such as Environment and Climate Change Canada’s Science Horizons Youth Internship Program, Natural Resources Canada’s Science and Technology Internship Program – Green Jobs, and Parks Canada’s Young Canada Works Program, focus on connecting young Canadians with careers in the sustainable jobs sector.
• The Foreign Credential Recognition Program, to support the labour market integration of skilled newcomers by funding projects that will make credential recognition processes faster and more efficient, and providing loans (up to $30,000), support services, and employment supports to help skilled newcomers acquire Canadian work experience, including within the low-carbon sector.

The 2022 Fall Economic Statement announced funding for the creation of a Sustainable Jobs Training Fund, also an action area under the interim Sustainable Jobs Plan. This initiative will help workers develop skills for jobs in areas that are critical for a net-zero future. It will seek to help 15,000 workers across the country upgrade or gain new skills for jobs in the low-carbon economy.

In addition, the 2022 Fall Economic Statement announced funding for a new Sustainable Jobs stream in the Union Training and Innovation Program under the Canadian Apprenticeship Strategy. This stream will aim to support unions in leading the development of green skills training for workers in the trades. It is expected that an additional 20,000 apprentices and journeypersons could benefit from this investment.

Chapter 3: Working together to achieve our climate objectives

Effective action to combat climate change requires concerted effort across society, by all orders of government, and working closely with civil society and the private sector. It is imperative that we work together if we are to make the changes needed to halt and reverse the worst effects of climate change and achieve lasting emissions reductions.

This chapter addresses the whole-of-society nature of the climate crisis, considering how action can take different forms, depending on varying roles, responsibilities and capacity. The importance of individual and collective action cannot be overstated; action is needed across all of society and by all orders of government. An overview of what others are doing to advance climate action in Canada is provided, including the actions being taken by each province and territory, continued collaboration with Indigenous partners, the advice being provided by the Net-Zero Advisory Body, and efforts underway with the international community.

3.1 Whole-of-society approach

Climate change is impacting every person in Canada, whether it is through storm activity, evacuations, smoke from wildfires, drought or the increased costs associated with a changing climate. Every government, every economic sector, every business, and indeed every individual has a role to play in taking action on climate change. What that action looks like can vary widely—for many, taking action on climate change must be aligned with the other competing priorities facing Canadians, such as affordability and the rising cost of living.

3.1.1 Federal government

The Government of Canada has a key role to play in driving climate action at home and abroad. For example, the federal government has direct responsibilities for interprovincial and international trade, conducts environmental assessments of major projects, and has authority over aspects of the nuclear generation sector, electricity exports, and designated international and interprovincial transmission lines. The federal government also enacts regulations to drive innovation, create job opportunities in the low-carbon economy, and help ensure a healthy environment. In addition to direct management and regulatory roles, the Government of Canada provides extensive funding support to provinces and territories, Indigenous partners, municipalities, the private sector and individual Canadians. A detailed overview of the actions being taken by the federal government are provided in Chapter 6.

3.1.2 Provincial and territorial governments

Provincial and territorial governments have an important role in climate action given the shared responsibilities between federal and provincial and territorial governments in areas of the economy and jobs, energy, and the environment. Provinces and territories hold responsibilities over many important sources of emissions. Provincial and territorial governments manage resource ownership, royalties, land-use planning, and allocations as well as exploration, development, conservation, and use of natural resources within their boundaries. Each province and territory is responsible for electricity generation, intra-provincial transmission, and distribution within their boundaries. Provinces and territories are also responsible for the adoption of building codes and have authority over municipal government affairs. An overview of the actions being taken by each province and territory on climate change is provided in Chapter 7.

3.1.3 Indigenous Peoples

Indigenous Peoples have noted that lived realities are inseparable from the effects of climate change and stress the urgency of protecting their territories, homelands, resources, languages, traditions and food systems for future generations. Canada has committed to advancing an Indigenous Climate Leadership (ICL) Agenda together with First Nations, Inuit, and Métis partners in recognition that Indigenous Peoples have long called for a renewed nation-to-nation, Inuit–Crown and Government-to-Government relationship, based on the recognition of rights, respect, cooperation, and partnership. An overview of the ICL initiative is provided later in Section 3.2.

3.1.4 Municipal governments

Municipal governments are essential partners in the fight against climate change. Municipalities have influence and control over roughly 50% of GHG emissions in Canada through their management of buildings, transportation, water, waste and land-use.¹ They have the ability to implement local measures that reduce GHG emissions, including public transportation projects and zero-emission buses, energy retrofits, net-zero energy buildings, active transportation, and investing in natural infrastructure. Many municipalities have their own climate targets and sector-specific commitments to reduce energy use, decarbonize transportation, reduce waste, and change land-use practices.

3.1.5 Private sector

The private sector includes businesses that directly produce emissions through industrial activity. The private sector also encompasses the investment decisions that are being made that directly impact the structure of the economy and will have an enormous impact on efforts to reduce emissions. Individual businesses, banks, institutional investors, venture capital firms and others make decisions on what to fund that directly influences the pace and scale of clean technology uptake by the private sector. A growing number of Canadian companies, including industrial sectors, are producing or adopting clean technologies to reduce emissions, drive growth, and remain competitive. These efforts often align with economic benefits, including ongoing cost savings, jobs, innovation, and improved competitiveness. Canadian businesses are also reducing emissions by using sustainable suppliers, switching company fleets to electric vehicles, and offering carbon credits to customers. Several Canadian businesses have already made net-zero pledges, including Maple Leaf Foods, Lululemon, Teck Resources, and more.

In their Canada’s Road to Net-Zero report, RBC estimates that Canada will need to invest two trillion dollars over the next thirty years (approximately $60 billion per year, up from $15 billion per year currently) to achieve net-zero emissions. The private sector will be key to reaching the investment levels required to create low-carbon and climate-resilient communities.

3.1.6 Civil society

Civil society organizations are instrumental in pushing for more ambitious climate action and holding governments and businesses accountable for their commitments. They serve as an important link between citizens, policymakers, and the private sector, helping to ensure governments take meaningful measures to combat climate change. Civil society organizations play a number of key roles including: raising awareness of climate issues; advocating for stronger climate laws, programs and policies; holding governments to account on their commitments; facilitating community-led events and initiatives; providing research, analysis, and recommendations on climate-related topics; and, participating in national and international climate forums, including climate negotiations.

3.2 Indigenous climate leadership

The Government of Canada recognizes that Indigenous Peoples’ leadership is key to Canada achieving its climate objectives and is committed to working collaboratively with First Nations, Inuit, and Métis partners to advance distinctions-based, self-determined climate action. While GHG emissions originating from Indigenous communities—estimated at less than one megatonne per year—are modest, Indigenous Peoples’ contributions to climate efforts far exceed the emissions directly attributed to their communities. The territorial stewardship of First Nations, Inuit, and Métis communities and lands, the exercise of constitutionally protected Aboriginal and Treaty Rights, and the participation in co-management regimes for natural resources and major infrastructure projects all position Indigenous Peoples as indispensable and influential contributors to climate policy and action. Further, Indigenous Knowledge Systems encompass many perspectives for understanding environmental complexity, and provide strategies to reduce, manage and adapt to environmental change in a place-based and holistic manner. In a changing climate, it is critical to prioritize Indigenous Knowledge and Science and to support self-determined climate action and initiatives.

During the development of the 2030 ERP, Indigenous Peoples, governments, and representative organizations were invited to provide submissions detailing their priorities and recommendations for Canada’s climate ambition. In their submissions, Indigenous Peoples noted that the time to engage on the 2030 ERP was inadequate and highlighted the need for their early, meaningful and consistent involvement in federal climate policy and programming. They also noted the urgency of protecting their territories, homelands, resources, languages, traditions, worldviews, and food systems for future generations and that lived realities are inseparable from the effects of climate change. They emphasized that First Nations, Inuit, and Métis experience disproportionate effects of climate change, including intensified effects of wildfires and flooding, food insecurity, and health impacts. The legacies of colonization (including displacement from traditional territories) and a unique relationship with the land, waters, and ice are factors that compound the effects of climate change, leading to intensified negative cultural, social, and economic impacts for Indigenous Peoples that directly compromise their health and wellbeing. In recognition that Indigenous partners are essential contributors to climate policy and action, and that the lived realities of First Nations, Inuit and Métis must be reflected in Canada’s climate plans, submissions from the Assembly of First Nations, Inuit Tapiriit Kanatami and the Métis National Council were included as an annex to the 2030 ERP.

In order to strengthen Canada’s partnership with Indigenous Peoples on climate, and in response to longstanding recommendations received from Indigenous partners, Canada committed to advancing work with First Nations, Inuit and Métis rightsholders, governments, and representative organizations to develop and implement a model of partnership that empowers self-determined climate action, implements the United Nations Declaration on the Rights of Indigenous Peoples, and enables Indigenous Knowledge and ways of knowing to be fully integrated in national climate policy.

To support this work, the 2030 ERP announced an investment of $29.6 million over three years, starting in 2022-23, to advance an ICL Agenda. In addition, the plan announced $180 million over seven years, starting in 2022-23, for a new Indigenous Leadership Fund under the Low Carbon Economy Fund, which supports clean energy and energy efficiency projects led by First Nations, Inuit and Métis communities and organizations. Progress on the Indigenous Leadership Fund can be found in the implementation update chapter of this report. Progress to date on the ICL initiative is detailed below.

3.2.1 The Indigenous Climate Leadership Agenda

Since time immemorial, the ability of Indigenous Peoples to adapt to and care for the land has been crucial in ensuring a flourishing way of life and rich, strong cultures. Faced with the current challenges of anthropogenic climate change, Indigenous Peoples in Canada and around the world are leaders and key drivers of climate action, at local, regional, national, and international levels. Indigenous Peoples in Canada are advancing responses to climate change in ways that reflect their Knowledge systems, legal systems, governance, values, worldviews, and nationhoods. Many Indigenous organizations, regions, and communities have developed climate change strategies and action plans to articulate their self-determined priorities. Indigenous Peoples have also called for Canada to respond meaningfully to their priorities in the climate space and to address challenges in current federal climate programming in order to make funding more accessible and equitable for First Nations, Inuit and Métis. Further, Indigenous Peoples have been calling for Canada to implement climate action that is consistent with the Paris Agreement, including urgent and transformative measures to slow climate change and address the impacts of a rapidly changing climate.

To support Indigenous Peoples’ actions in response to their climate priorities and adaptation plans, the Government of Canada is committed to renewed nation-to-nation, Inuit–Crown and government-to-government relationships with First Nations, Inuit, and Métis, based on the recognition of rights, respect, cooperation, and partnership. Recognizing that Indigenous Knowledge systems and ways of doing must be a cornerstone of Canadian climate policy, Canada has committed to advance an ICL Agenda jointly with First Nations, Inuit, and Métis partners. The goal of the ICL Agenda is to implement a model of partnership for climate action between the federal government and Indigenous Peoples that empowers self-determined climate action; leverages the transition to a net-zero economy to support overarching efforts towards self-determination, the alleviation of socio-economic inequities, and the implementation of the United Nations Declaration on the Rights of Indigenous Peoples; and, supports the inclusion of Indigenous Knowledge in national climate policy through appropriate governance arrangements, the promotion of Indigenous perspectives on climate change, and the ethical and equitable consideration of both Indigenous and non-Indigenous knowledge systems and science.

Together, the federal government and Indigenous partners have made significant progress to develop a path forward for strengthening Canada’s approach to investing in Indigenous climate action and engaging with Indigenous partners on climate. Prior to and following the release of the 2030 ERP, Canada has maintained strong partnerships with First Nations, Inuit, and Métis through three distinctions-based, Senior Bilateral Tables on Clean Growth and Climate Change. These tables, established to address challenges with the lack of meaningful engagement with Indigenous Peoples during the development of the Pan-Canadian Framework on Clean Growth and Climate Change, were announced by the Prime Minister and the national leaders of the Assembly of First Nations, Inuit Tapiriit Kanatami and the Métis National Council in 2016. More than six years later, the tables continue to be instrumental in fostering relationships between the federal government and Indigenous partners, sharing climate action that Indigenous Peoples are leading, and providing opportunities for cultural teachings and land-based learning. They are important spaces for identifying barriers, finding mutually beneficial solutions, and advancing joint climate priorities. Priorities established at these tables, as well as through First Nations, Inuit, and Métis national and regional climate change strategies, will continue to inform the ICL Agenda.

Following the release of the 2030 ERP, and building on longstanding joint priorities, Environment and Climate Change Canada and Crown–Indigenous Relations and Northern Affairs Canada launched national, regional, and community-level discussions with First Nations, Inuit, and Métis partners, with a shared objective of advancing the ICL Agenda as announced in the 2030 ERP. Recognizing that the federal government must hear directly from Indigenous partners on their vision for climate leadership, federal officials reached out to Indigenous partners in late 2022 to initiate early dialogue, which focused on laying the groundwork for a jointly developed process and setting the stage for Indigenous-led community-level engagement through to Fall 2024.

Since then, through this initiative, the Government of Canada has established partnerships with over 30 Indigenous governments and regional organizations across the country to support an inclusive process that recognizes the right to self-determination and reflects the diversity of First Nations, Inuit, and Métis realities and priorities. Canada is providing funding to many of these partners to advance unique engagement plans, each with different methods of collecting input from their citizens and communities, including targeted working groups, in-person and virtual meetings, public consultations in communities, and larger regional conferences. To date, over $20 million in contribution funding has been committed to support the efforts of these partners.

In parallel to these efforts, Environment and Climate Change Canada and Crown–Indigenous Relations and Northern Affairs Canada are working with all federal departments with responsibilities related to climate change in order to ensure programs are taking immediate action to implement best practices for meaningful engagement with Indigenous partners, and to increase Indigenous Peoples’ access to federal programming through flexible and equitable program design and implementation. Further, federal efforts to advance the ICL Agenda include sharing the early results of engagement and discussing ways that the federal government can meaningfully respond to recommendations received from Indigenous partners. Three interdepartmental committees have been established to support this work, including an Assistant Deputy Minister committee to provide strategic advice to federal departments on how to implement the ICL Agenda.

As the ICL Agenda progresses, the Government of Canada will continue to work with First Nations, Inuit, and Métis rightsholders, governments, and representative organizations to advance commitments in the 2030 ERP, including creating distinctions-based agendas for climate action that establish next steps on issues such as:

• Land-based and rights-based approaches to climate change, including establishing a common approach for the implementation of the United Nations Declaration on the Rights of Indigenous Peoples in climate policy;
• Mechanisms to establish federal support for Indigenous-led climate strategies;
• Mobilization of Indigenous Knowledge systems in national climate initiatives; and,
• Options and pathways to transfer authorities and resources to Indigenous Peoples.

Ultimately, Canada’s approach to implementing the ICL Agenda must recognize and uphold Indigenous rights and the right to self-determination. In July 2023, Canada reconfirmed this commitment in the United Nations Declaration on the Rights of Indigenous Peoples Act Action Plan (PDF), which includes the ICL Agenda as a key action. Measure 46 states that “Canada will partner with First Nations, Inuit, and Métis to advance an ICL Agenda, including distinctions-based strategies, that vests the resources and authorities necessary for Indigenous Peoples to fully exercise their right to self-determination on climate. This includes ensuring that First Nations, Inuit, and Métis peoples have stable, long-term financing to implement their climate actions, make climate-related decisions with the Government of Canada, and that systemic barriers to Indigenous climate leadership are addressed.”

The First Nations – Canada Joint Committee on Climate Action (JCCA)

In June 2023, the Assembly of First Nations and the Government of Canada released the fifth Annual Report of the Joint Committee on Climate Action, which highlights the priorities of the committee for 2023, including a commitment to ensuring Canada’s climate solutions build on First Nations Climate Leadership and promote its full inclusion in emerging climate actions. In July 2023, the Assembly of First Nations ratified their National Climate Strategy, which sets direction for First Nations‑led climate priorities and will inform both work at the JCCA and the development of the First Nations stream of the ICL Agenda.

The Inuit – Canada Table on Clean Growth and Climate Change

In January 2023, the Inuit–Canada Table met in Ottawa and reaffirmed its focus on implementation of the Inuit Nunangat Policy, the National Inuit Climate Change Strategy, and regional strategies as they are launched, such as the Inuvialuit Settlement Region Climate Change Strategy. Inuit and federal representatives also committed to continued work to improve federal programming to foster holistic approaches to climate action in Inuit Nunangat and support Inuit Climate Leadership to advance the Inuit stream of the ICL Agenda.

Métis Nation – Canada Goose Moon Table on Clean Growth and Climate Change

In March 2023, the Goose Moon Table met in Métis Crossing, Alberta with a focus on finding new ways to meaningfully build relationships, highlight critical climate actions being taken, and integrate Métis Climate Leadership into climate policy and programming, particularly in sectors such as climate adaptation and emergency management, where they continue to be ineligible to access Indigenous-targeted federal programs. The Métis National Council, Les Femmes Michif Otipemisiwak, and Métis Nation’s Governing Members are working on the first Métis Nation’s National Climate Change Strategy, which, when it is launched in 2024, will inform priority work for the Goose Moon Table, as well as highlight top climate priorities and recommendations to further support the Métis stream of the ICL Agenda.

3.2.2 Next steps

Environment and Climate Change Canada and Crown–Indigenous Relations and Northern Affairs Canada will continue to work with First Nations, Inuit, and Métis rightsholders, governments, and representative organizations, as well as senior leaders across the federal government, to develop a roadmap for strengthening Canada’s partnership with Indigenous Peoples on climate. Increasing collaboration with Indigenous partners through a distinctions-based approach will ensure that the unique priorities and knowledge of First Nations, Inuit, and Métis underpin national climate efforts, provide a foundation for regional and community-led climate action, and are meaningfully reflected in Canada’s climate plans.

3.3 Net-Zero Advisory Body

The Net-Zero Advisory Body (NZAB) was launched in February 2021 and formally established as a Governor in Council-appointed body through the CNZEAA in June 2021. Comprised of up to 15 experts from across Canada, the NZAB’s role is to provide independent advice on how Canada can achieve net-zero emissions by 2050.

Since its launch in 2021, the NZAB has provided their advice through several publications including Net-Zero Pathways: Initial Observations, its submission to the Government of Canada’s 2030 ERP, and annual report, as well as other engagements.

3.3.1 Advice for Canada’s 2030 Emissions Reduction Plan

The NZAB’s official submission to Canada’s 2030 ERP built on their five foundational values and five design principles and marked the first year of NZAB’s work. The submission provided advice on four lines of inquiry: buildings, transportation, oil and gas, and governance. The three lines of inquiry that align with specific economic sectors were chosen as they are the highest-emitting sectors in Canada. Governance was chosen as a fourth line of inquiry based on the importance of institutional capacity and internal and external relationships for delivering emissions reductions.

3.3.2 Recent activities

Since the publication of the 2030 ERP, the NZAB has continued to advance their important work through a number of activities. This has included hosting and participating in domestic and international engagement opportunities such as stakeholder roundtables to inform its 2022 annual report, discussions on implementing the NZAB’s values and principles to achieve net zero by 2050, and a panel on the role of independent climate councils for climate governance and accountability, at an event organized by the International Climate Councils Network at COP27.

The NZAB also worked in partnership with the Canadian Climate Institute to organize several public conferences. In October 2022, they co-hosted 2030 in Focus: Getting the Next Decade Right on Net-Zero and in November 2023, they co‑hosted Building Momentum Towards Net Zero. Discussions focused on the progress toward net zero, from a national and an international perspective. The conferences featured keynote speakers, moderated panels, and fireside conversations with national and international climate change policy experts, as well as political, business, and Indigenous leaders.

The NZAB also completed its first annual report, Compete and Succeed in a Net-Zero Future. The report was submitted to the Minister of Environment and Climate Change in December 2022. As per the requirements of the CNZEAA, intended to ensure transparency and accountability, the NZAB report was published on January 27, 2023, and the Minister of Environment and Climate Change publicly responded on April 19, 2023.

In the report, the NZAB provided 25 pieces of advice across three lines of inquiry: Net-Zero Governance, Net-Zero Industrial Policy, and Net-Zero Energy systems. The selection of these lines of inquiry was guided by extensive engagement activities, review of literature, discussions with lay and expert Canadians, and early discussions with Indigenous experts and organizations.

Net-zero governance

The NZAB highlighted the need for the federal government to work with partners to implement strong governance structures and taking on a leadership role. It also highlighted the importance of, and recommendations for, best practices in monitoring progress. The advice also provided a number of recommendations for supporting effective net-zero modeling. The Minister’s response to these recommendations noted a commitment to playing a leadership role in the transition to net-zero emissions; working to continuously improve its monitoring and reporting on GHG emissions; and to improving its GHG modelling.

Net-zero industrial policy

The NZAB provided guidance on setting priorities for net-zero industrial policy, and ensuring Canada draws upon its unique advantages to remain competitive in a low-carbon economy. Its report also provided advice on implementing industrial policy to help Canada secure a foothold in emerging clean technology supply and value chains. The report highlighted the importance of creating an enabling environment for net-zero industry. The NZAB also noted that a net-zero industrial policy will complement the ERP. The Minister agreed with the importance of net-zero industrial policy in securing Canada’s transition to a net-zero future. He noted continued engagement with the NZAB on how to improve net-zero industrial policy engagement and committed to exploring mechanisms to improve the efficiency of the impact assessment and permitting process.

Net-zero energy systems

The NZAB highlighted the importance of net-zero energy systems in continuing to provide reliable and affordable energy to Canadians, while transitioning to a net-zero economy. It also provided advice on how to support grid decarbonization and electricity interties, through for example the Pan-Canadian Grid Council (launched as the Canada Electricity Advisory Council in May 2023). Finally, this line of inquiry provided guidance on how to create a more streamlined regulatory environment in order to facilitate timely deployment of non-emitting electricity. The Minister acknowledged the importance of a net-zero energy vision that reflects the principles outlined by the NZAB, as well as recognized ongoing efforts to work with partners to improve regulatory processes and achieve a net-zero grid.

3.3.3 Looking ahead

At the request of the Minister of Environment and Climate Change, the NZAB is developing advice on achieving Canada’s 2030 emission reduction goal. This advice will encourage action that can yield additional incremental emissions reductions while considering environmental, economic, social, and technological factors and the best available scientific information and knowledge, including Indigenous knowledge, respecting climate change. Grounded in Canada’s unique realities, this 2030 advice will consider the implementation risk facing many existing climate policies and if existing policies need to be strengthened or approaches altered to realize intended 2030 emissions reductions. This advice will be shared directly with the Minister of Environment and Climate Change and will be publicly available in the NZAB’s 2023 Annual Report.

The NZAB’s 2030 advice will be informed by insights gained from its ongoing engagement with Canadians, expert stakeholders, and Indigenous organizations, as well as NZAB’s foundational values and design principles to ensure alignment with the most likely pathways for Canada to achieve net zero by 2050.

Beyond providing its 2030 advice, the NZAB is developing advice emerging from its three lines of inquiry: net-zero energy systems, net-zero governance, and net-zero industrial policy, as well as developing recommendations to inform a 2035 emission reduction target. The NZAB will continue knowledge-building and learning about Indigenous climate priorities across all lines of inquiry.

3.4 International leadership

Building on Canada’s long history of stepping up to tackle global challenges, Canada has been active through the G7, G20, United Nations, and other international fora and bilateral relationships to push for increased global ambition and concrete actions to address climate change. To ensure implementation of the Paris Agreement, Canada is taking action at home and working with partners around the world to promote and facilitate global climate action everywhere. Canada is committed to supporting mitigation and climate action by developing countries.

3.4.1 International commitments and collaboration

Under the UNFCCC, Canada is committed to working with the international community to meet the objectives of the Paris Agreement and to scale up climate finance to support developing countries in their climate mitigation efforts, as well as to foster resilience among those most at-risk from the effects of climate change.

The 2015 Paris Agreement is a legally binding international treaty adopted by Parties to the UNFCCC. The Agreement aims to keep the global average temperature to well below 2.0°C above pre-industrial levels and make efforts to limit temperature increase to 1.5°C. The Agreement also seeks to enhance the ability to adapt to climate change, and make global finance flows consistent with low greenhouse gas emissions and climate-resilient development.

3.4.2 Update on actions in international forums

Canada’s work to support ambitious mitigation globally includes leadership of complementary initiatives and efforts, such as the Powering Past Coal Alliance, the Prime Minister’s Global Carbon Pricing Challenge, the Global Methane Pledge, and through the delivery of climate finance via the Climate Investment Funds and in the replenishment of the Green Climate Fund. Canada’s active participation in such initiatives and multilateral efforts and partnerships contributes to building consensus and finding solutions with other countries and partners on a range of issues.

United Nations Framework Convention on Climate Change Conference of the Parties

The United Nations Conference of the Parties (COP) takes place annually. It functions as both the UNFCCC’s supreme decision-making body as well as a broader UN climate change conference bringing together more than 50,000 participants to advance global discussions and solutions for climate change.

At the 27th United Nations Climate Change Conference (COP27) in November 2022, Canada and other countries agreed to accelerate efforts toward phasing out inefficient fossil fuel subsidies and the phase‑down of unabated coal power which are the single largest sources of CO₂ emissions. Canada also continued to advocate for clean energy and called for more widespread adoption of carbon pricing globally. Following Prime Minister Justin Trudeau’s challenge to triple the global coverage of carbon pricing to 60% by 2030 at COP26, Canada and Chile officially launched the Global Carbon Pricing Challenge at COP27. Since then, the Republic of Korea, New Zealand, the United Kingdom, Norway, Denmark, and Germany have joined the Challenge as partners, and Côte d’Ivoire has joined as a Friend of the Challenge. Canada also worked with other Parties to examine solutions, including the creation of new financial instruments, to help vulnerable developing countries respond to loss and damage. Canada is actively involved in developing these solutions.

Canada is participating in COP28, held from November 30 to December 12, 2023, under the United Arab Emirates’ (UAE) Presidency. The UAE’s vision for COP28 focused on four paradigm shifts seeking to: (i) fast-track the energy transition and slashing emissions before 2030; (ii) transform climate finance; (iii) put nature, people, lives and livelihoods at the heart of climate action; and, (iv) mobilize the most inclusive COP. Of particular importance, Parties are reviewing the findings of the first Global Stocktake (GST) of the Paris Agreement, which aims to assess global progress in achieving the Paris Agreement’s objectives. The outcome of the GST, negotiated at COP28, will set the direction for future climate actions needed by all countries to limit temperature increases and respond to the impacts of a warming planet.

North American Leaders Summit

In January 2023, Canada, the United States and Mexico held the North American Leaders Summit, where all three parties agreed on some commitments and approaches to increase climate ambition in the region. The most notable clean growth pledges include: reducing methane emissions by 15% below 2020 levels in the solid waste and wastewater sectors by 2030; committing to develop a North American clean hydrogen market to support the transition from fossil fuels; and, agreeing to ensure that regional supply chains are promised for semiconductors and electric vehicle batteries, to be achieved through public-private dialogues. Other commitments include advancing cooperation and alignment on SC-GHG approaches and continuing cooperation on nature-based solutions and conservation.

G7 Ministers’ Meeting on Climate, Energy, and Environment

The Group of Seven (G7) is made of the world’s leading economies, specifically: Canada, the United States, the United Kingdom, France, Italy, Germany, Japan, and the European Union. The G7 has indicated its collective commitment to mitigating climate change. Canada will be the G7 President in 2025.

In 2022, G7 leaders jointly endorsed the goals of an international Climate Club to accelerate the implementation of the Paris Agreement and committed to achieving a highly decarbonised road sector by 2030, and a fully or predominantly decarbonised power sector by 2035.

In 2023, Canada and other G7 countries called for increased climate ambition through the implementation of high integrity carbon markets and initiatives like the Global Carbon Pricing Challenge, accelerating the phase-out of unabated coal power, reducing methane emissions, and using nature-based solutions. The 2023 G7 Ministers’ Meeting on Climate, Energy, and Environment took place in Sapporo, Japan from April 15 to 16. The Ministers worked to support increased ambition on climate action, nature conservation, clean and efficient energy, and pollution reduction, while also advancing global energy security and seizing economic opportunities for Canadian businesses, workers, communities, and Indigenous Peoples. This was followed by the G7 Leaders’ Summit in Hiroshima on May 19 to 21, where G7 Leaders also agreed to a number of outcomes on climate change and environment issues. Key Ministerial and Leader-level outcomes included:

• calling on all countries to enhance their climate ambition, including by committing to peak global emissions by 2025 and enhancing their mitigation targets by COP30 in 2025 to align with a goal of keeping a limit of 1.5°C within reach;
• agreeing to accelerate the phase-out of unabated fossil fuels so as to achieve net zero in energy systems by 2050 at the latest;
• reiterating their commitment to achieving a fully or predominantly decarbonized power sector by 2035, and prioritizing concrete and timely steps towards the goal of accelerating the phase-out of domestic unabated coal power generation, and working towards ending the construction of new unabated coal fired power generation;
• reaffirming their commitment to the elimination of inefficient fossil fuel subsidies by 2025 or sooner;
• agreeing to increase offshore wind and solar capacity, and recognizing the role of low-carbon and renewable hydrogen and its derivatives, such as ammonia;
• reaffirming their commitments to the goal of jointly mobilizing US$100 billion annually in climate finance by 2020 and through to 2025, and to fully meet this goal in 2023, and reaffirming the important role of multilateral development banks (MDBs), the private sector, and others in mobilizing increased climate finance;
• expressing their commitment to the swift and full implementation of the Kunming-Montreal Global Biodiversity Framework (KMGBF) adopted at the Convention Biological Diversity (CBD) COP15 in Montréal in December 2022; and
• committing to end plastic pollution, with the ambition to reduce additional plastic pollution to zero by 2040, and to work together toward an ambitious new international legally binding agreement on plastic pollution.

G7 Ministers of agriculture

Recognizing that agriculture can make a vital contribution to mitigating the impacts of climate change, G7 ministers of agriculture met in 2022. They committed to greater use of policies to promote sustainable production, including enhanced mitigation efforts and steps to adapt agricultural production to climate change. Ministers further committed to scaling up efforts to achieve net-zero GHG emissions as soon as possible, and by 2050 at the latest. A related priority was the responsible use of fertilizers while also reducing nutrient losses and halting and reversing biodiversity loss.

G7 ministers of agriculture also recognized that activities for enhanced carbon sequestration support transformation to sustainable food systems and improve climate stewardship and food security.

Ministerial meeting on climate action

Ministerial meetings on climate action are co-hosted annually by Canada, China, and the European Union. They bring together key partners to advance the goals of the Paris Agreement. These meetings also provide a forum to discuss economic opportunities with global business leaders. In July 2023, participating ministers shared expectations for COP28, including the need to keep global warming to 1.5°C within reach and to work together to support people and communities experiencing severe impacts of the climate crisis. Ahead of this meeting, Canada announced its contribution to the second replenishment of the Green Climate Fund, a 50% increase when compared to its previous contribution. Canada called for new and enhanced actions to reduce emissions, its commitment to an inclusive approach to addressing climate change, the importance of responding to loss and damage experienced by developing countries at COP28, as well as its commitment to make climate and biodiversity action mutually reinforcing following the historic adoption of the Kunming-Montréal Global Biodiversity Framework during the Convention on Biological Diversity (COP15) in December 2022.

Meeting of the G20

The Group of Twenty (G20) is the primary forum for international economic cooperation among the world’s leading developed and emerging economies. During the 2023 G20 meetings in India, Canada worked with its partners to push for G20 commitments that would accelerate ambitions to keep a 1.5°C temperature rise within reach, halt and reverse biodiversity loss by 2030, and end plastic pollution. At their meeting in New Delhi on September 9 and 10, G20 Leaders agreed to outcomes that: noted the requirement to peak global emissions by 2025 in order to limit global warming to 1.5°C; encouraged all countries to develop emissions reduction plans that include economy-wide targets covering all greenhouse gas emissions; and reiterated previous G20 commitments to phase-out and rationalise inefficient fossil fuel subsidies and accelerate efforts towards the phasedown of unabated coal power. G20 Leaders also committed to the swift, full and effective implementation of the KMGBF, encouraging actions to halt and reverse biodiversity loss by 2030, and calling for enhanced financial resources from all sources to support this effort; and stated their determination to end plastic pollution, welcoming the negotiations towards a new, legally-binding global instrument on plastic pollution.

Major Economies Forum on Energy and Climate

The Major Economies Forum on Energy and Climate (MEF) seeks to accelerate collective efforts to keep a 1.5°C limit on warming within reach. On April 20, 2023, U.S. President Biden convened the latest leaders-level MEF, involving Prime Minister Trudeau and the leaders of 19 other major economies. Leaders expressed support for initiatives in five priority areas: (1) decarbonizing energy; (2) ending deforestation; (3) reducing non-CO₂ emissions; (4) advancing carbon management technologies; and, (5) scaling up climate finance from multilateral development banks (MDB).

Canada supported the collective goal of over 50% of light duty vehicles (LDV) and at least 30% of medium- and heavy-duty vehicles (MHDVs) sold by 2030 to be ZEVs. Canada endorsed the decarbonizing international shipping initiative to support the adoption of 1.5°C-aligned goals for the shipping sector in the International Maritime Organization (IMO), including a goal of zero emissions from international shipping no later than 2050. Canada joined partners in launching the Methane Finance Sprint, which aimed to raise by COP28, at least $200 million in new public and philanthropic support for methane abatement activities, with a view to developing a pipeline of projects. Canada also endorsed an initiative to encourage major economies to ratify the Kigali Agreement and support a strong replenishment of the Montreal Protocol Multilateral Fund to incentivize early action on HFCs. Canada expressed full support and in July 2023 became a co-sponsor of the Carbon Management Challenge, with the aim for countries to come forward by COP28 with concrete announcements and goals that will accelerate carbon capture, removal, use, and storage technologies.

Organization for Economic Co-operation and Development

On November 3 and 4, 2022, Ministers of agriculture from around the world and representatives from international organizations met in Paris for the OECD Meeting of Agriculture Ministers. The Meeting was co-chaired by Canada and New Zealand. As an outcome of this Meeting, all parties agreed on commitments and approaches to increase climate change mitigation efforts by reducing emissions from agriculture and food systems and effectively increasing carbon sequestration. This would contribute to the goal of achieving economy-wide net-zero GHG emission by 2050, actions and innovative policies building on existing Nationally Determined Contributions of the Paris Agreement.

These commitments include the development and implementation of policies to facilitate adaptation to climate change; investments in research, innovation and extension services that can facilitate sustainable productivity growth and offer climate change mitigation and adaptation solutions; as well as various commitments related to other, related agri-environmental priorities and benefits.

Other international-level priorities

In addition to the priorities outlined above, Canada continues to support a wide-range of international-level efforts^{Footnote 2}  to reduce GHG emissions and protect ecosystems and the environment, including the:

• Climate and Clean Air Coalition;
• Global Methane Initiative;
• Arctic Council Framework for Action on Enhanced Black Carbon and Methane Emissions Reductions;
• Kigali Amendment to the Montreal Protocol;
• Ongoing negotiations to develop a new international instrument on plastic pollution, including in the marine environment through the established Intergovernmental Negotiating Committee (INC);
• Mission Innovation;
• Clean Energy Ministerial;
• Forest and Climate Leaders Partnership;
• Deforestation and sustainable land use commitments;
• Global Alliance on Circular Economy and Resource Efficiency (GACERE) and other initiatives to advance the circular economy;
• Global Research Alliance on agricultural greenhouse gases;
• The China Council For International Cooperation and Development;
• The Canada – EU Green Alliance;
• Roadmap for a Renewed United States-Canada Partnership and the High-Level Ministerial Dialogue on Climate Ambition; and,
• The Statement on International Public Support for Clean Energy Transition (the Glasgow Statement).

3.4.3 Pursuing progress

Canada will continue to advocate for increasing global ambition and climate action from all countries to keep 1.5˚C of warming by the end of the century within reach. Canada will deliver on its international climate finance commitments, work to continuously increase the effectiveness of investments and to mobilize private resources to meet the global financing goals. At the same time, the Government of Canada is committed to supporting and enabling Indigenous climate leadership, promoting gender equality and mainstreaming gender-based analysis, and supporting developing countries with a focus on the most vulnerable and marginalized. The 2030 ERP committed to exploring additional opportunities to work with international partners and advance leadership. Efforts have been made since the release of the 2030 ERP to advance each of these opportunities.

Encouraging the use of carbon pollution pricing around the world

Canada has continued to champion the Global Carbon Pricing Challenge (GCPC) in major international forums, including at COP27, the G7 Summit, and the UN General Assembly Climate Ambition Summit. At COP27 in November 2022, Canada hosted a high-level discussion to advance carbon pricing with representatives from Chile, New Zealand, Sweden, and the UK. In September 2023, Canada’s Prime Minister and Minister of the Environment and Climate Change hosted the GCPC event “Driving Global Climate Ambition”, featuring political representatives and high-level officials from Côte d’Ivoire, Denmark, the European Union, the Republic of Korea, New Zealand, Norway, the United Kingdom, and Vietnam, as well as the Managing Director of the International Monetary Fund, the Special Adviser on Climate to the United Nations Secretary General, and the Executive Director of the International Energy Agency. As of September 2023, the GCPC network includes Canada, Chile, Côte d’Ivoire, Denmark, Germany, the Republic of Korea, New Zealand, Norway, and the UK. The EU has signaled its intention to join. Through the GCPC Advisory Committee and Technical Working Group, work is under way to facilitate country-to-country partnerships to support and expand carbon pricing coverage.

Global phase-out of unabated coal-power electricity and thermal coal mining

In November 2022, at COP27, Minister Guilbeault announced the release of “Powering Past Coal,” the first global review of the state of coal phase-out. The report’s release marked five years of progress by the Powering Past Coal Alliance (PPCA), a global alliance of governments, businesses and industry organizations co-led by Canada and the United Kingdom. The report shows that the PPCA membership has grown to more than 165 members, including national governments, sub-national governments, businesses, and finance institutions. The report shows that the end of unabated coal power is underway and is making progress. Furthermore, the report shows that the PPCA has helped ensure that over 75% of coal power in Organisation for Economic Co-operation and Development member countries has retired or is scheduled to close by 2030.

Addressing plastic pollution

In June 2023, Canada announced that it is planning to welcome the world to Ottawa in April 2024 for the fourth session of the Intergovernmental Negotiating Committee (INC‑4) on a global treaty to end plastic pollution. Canada will continue to work with other leading countries to establish a new international legally binding agreement on plastic pollution that addresses the full lifecycle of plastics, to respond to the need for a coordinated approach with targeted, ambitious, and sustained action to address plastic pollution globally.

International carbon offsets

Following Canada’s strong advocacy at COP26 for robust international rules for internationally transferred mitigation outcomes (ITMOs) to ensure environmental integrity, transparency and the avoidance of double-counting offset credits, efforts are ongoing to explore the development of federal policy on ITMOs. Negotiations of rules for the implementation of ITMOs took place at COP27 and continued to progress at COP28 in November and December 2023.

Chapter 4: Next steps

4.1 Upcoming milestones on the road to 2030 and 2050

This report, as the first progress report under the CNZEAA, represents an important milestone for the Government of Canada’s commitment to ensure accountability and transparency in planning for and taking action against climate change. The report follows the first climate plan established under the Act, the 2030 ERP, that was released in March 2022. The Government of Canada is 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 ten years in advance of the target date, and the 2035 target will be set no later than December 1, 2024. These future targets will take into account 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 five years in advance of the target date.

The next progress report on the implementation of the 2030 Emission Reduction Plan must be finalized by no later than the end of 2025. In accordance with the Act, the 2025 Progress Report must contain an assessment of the 2030 GHG emissions target, based on the most recent developments in science, technology and GHG emissions management, and must consider whether the target should be changed, based on those developments.

The Commissioner of the Environment and Sustainable Development (CESD) provides parliamentarians and Canadians with analysis and recommendations on the Government of Canada’s efforts to protect the environment, mitigate the effects of climate change, and nurture sustainable development. The CESD is appointed by the Auditor General of Canada for a seven-year term. Under the Act, the CESD must, at least once every five years, examine and report on the Government of Canada’s implementation of the measures aimed at mitigating climate change, while prescribing recommendations related to improving the effectiveness of measure implementation. The CESD released their first report under the Act on the 2030 ERP in November 2023.

Figure 4-1: CNZEAA transparency and accountability cycle 

There are many other upcoming reports that will provide additional information on climate change in Canada and the efforts being made to mitigate its impacts:

• Canada’s Changing Climate Report: Originally released in 2019, this report assessed the state of knowledge on how and why Canada’s climate has changed and what changes are projected for the future. It is national in scope and provides the Canadian context to the issue of global-scale climate change. The second installment of this report is anticipated in mid-2025.
• The Net-Zero Advisory Body will be releasing their annual report, with advice on reaching 2030 and 2050 targets.
• A National Priorities for Climate Change Science and Knowledge report is planned for publication in early 2024, which will summarize the most important scientific research and data needs that Canada’s science community should undertake to help us better evaluate climate change and plan for its impacts.
• A number of non-governmental organizations, including think tanks, business groups, and environmental organizations are undertaking research and releasing reports, including the Canadian Climate Institute and the International Institute for Sustainable Development.

4.2 Conclusion

The Government of Canada remains steadfastly committed to meeting the 2030 emissions target, transitioning to a net-zero economy, and strengthening the fabric of Canadian society. This requires a wide range of regulations, programs, and initiatives which have been described in this report. Getting to this point has required the commitment of Indigenous Peoples, communities, provincial, territorial, and municipal governments, businesses, and individuals. At seven years away from 2030, Canada’s projected 2030 emissions are at 36% below 2005 levels. To meet Canada’s target of 40% to 45% below 2005 levels, additional emissions reductions are needed. There is more work to do.

This report outlines the more than 140 measures currently in place or in development that reduce emissions as well as the enabling measures that help support the shift to a net-zero future.

The Government of Canada recognizes the importance of finalizing policies under development and fully implementing announced policies. The Government will continue to implement measures under the 2030 ERP, including releasing the Canada Green Buildings Strategy, and implementing the Carbon Management Strategy. The government will also continue to seek new opportunities and consider a number of potential options as identified throughout this report, including exploring the potential for energy and GHG performance standards in federally funded homes and buildings programs, opportunities related to charging and hydrogen refuelling stations, the development of a Sustainable Aviation Fuels Blueprint, and approaches in the agriculture sector to help promote the adoption of beneficial management practices and increase clean technology use.

Given the central role of provinces and territories, municipalities, Indigenous Peoples and the private sector in climate action, the Government of Canada will continue to work closely with partners. Governments in Canada are being called upon by Canadians to demonstrate leadership in the fight against climate change. It is imperative that we work together to ensure that Canada does its part to reduce global emissions and protect Canadians from catastrophic climate impacts.

The Government of Canada will continue to provide updates on progress to implement the 2030 ERP and fulfill its international reporting obligations to the UNFCCC, including through the first Biennial Transparency Report to the UNFCCC that is due by the end of December 2024. The CNZEAA will ensure that Canada’s climate planning and reporting remains transparent and accountable. The Government of Canada will also continue to work closely with Indigenous Peoples, provinces and territories, municipalities, industry, and civil society. Recognizing the critical role that provinces and territories and the private sector have in achieving Canada’s climate objectives and ensuring Canada is well positioned to prosper through the net-zero transition, the Government of Canada will continue to seek opportunities with partners.

References

Chapter 1

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² Environment and Climate Change Canada. 2022. 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy (PDF). Ottawa. Released March 29, 2022.

³ Climate Watch. 2023. (webpage). Historical GHG Emissions – Emissions for 2020.

⁴ United Nations Framework Convention on Climate Change. (webpage). Why the Global Stocktake is a Critical Moment for Climate Action.

⁵ National Oceanic and Atmospheric Administration National Centers for Environmental Information. 2023. (webpage). Billion-Dollar Weather and Climate Disasters. Updated November 8, 2023.

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⁷ International Energy Agency. 2023. World Energy Outlook 2023. Paris. Released October 24, 2023.

⁸ Boyd, Richard and Anil Markandya. 2021. Costs and Benefits of Climate Change Impacts and Adaptation. Chapter 6 in Canada in a Changing Climate: National Issues Report. Fiona J. Warren and Nicole Lulham, editors. Natural Resources Canada, Ottawa.; Insurance Bureau of Canada. 2023. (webpage). Insured Damages from Hurricane Fiona Now Over $800 Million. Released January 5, 2023.

⁹ Bush, Elizabeth and Donald S. Lemmen, editors. 2019. Canada’s Changing Climate Report. Environment and Climate Change Canada, Ottawa.

Chapter 2

¹ Environment and Climate Change Canada. 2016. Canada’s Second Biennial Report on Climate Change. Ottawa. Released February 10, 2016.

² Intergovernmental Panel on Climate Change. 2019. Special Report on Climate Change and Land.; International Energy Agency. 2021. Net Zero by 2050: A Roadmap for the Global Energy Sector.

³ Gibb, Duncan, Jan Rosenow, Richard Lowes, and Neil J. Hewitt. 2023. Coming in from the cold: Heat pump efficiency at low temperatures. Joule 7 (9): 1939-1942.

⁴ Natural Resources Canada. (webpage). National Energy Use Database – Residential Sector – Canada – Table 27: Heating System Stock by Building Type and Heating System Type.

⁵ Government of Nova Scotia. 2022. (webpage). Residential Heating Fuel and Equipment, 2021. Released December 12, 2022.

⁶ Natural Resources Canada. 2016. (pdf). Energy Fact Book 2016-2017. Ottawa.

⁷ International Renewable Energy Agency. 2023. Renewable Power Generation Costs in 2022. Abu Dhabi.

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⁹ Canadian Renewable Energy Association. 2023. News Release: Canada added 1.8 GW of wind and solar in 2022. Ottawa. Released January 31, 2023.

¹⁰ Dunsky Energy + Climate Advisors. 2023. (webpage). Zero Emission Vehicle Availability: Estimating Inventories in Canada: 2022 Update. Montréal. Released January 31, 2023.

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¹² RBC Economics and Thought Leadership, BCG Centre for Canada’s Future, and Arrell Food Institute. 2022. The Transformative Seven: Technologies that can drive Canada’s next green revolution. Released on November 30, 2022.

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Chapter 3

¹ Federation of Canadian Municipalities. (webpage). Climate and sustainability.