2030 Emissions Reduction Plan – Sector-by-sector overview

The 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy outlines a sector-by-sector path for Canada to reach its emissions reduction target of 40 percent below 2005 levels by 2030 and net-zero emissions by 2050.

Explore the sections below to learn more about what Canada is doing to reduce emissions across the economy.

• Economy-wide
• Buildings
• Electricity
• Heavy industry
• Oil and gas
• Transportation
• Agriculture
• Waste
• Nature-based solutions

Economy-wide

PDF: 2030 ERP: Economy-wide (56.1 kB)

Economy-wide strategies to reduce emissions, like carbon pricing, clean fuels, and reducing methane emissions, will enable Canada to reduce emissions in the most flexible and cost-effective way. They will also provide policy certainty to businesses and Canadians, allowing everyone to make more informed decisions as Canada’s economy decarbonizes.

What we’ve already done

• Put a price on carbon pollution starting at $20 per tonne in 2019 and rising to $170 in 2030; includes a regulatory charge on fossil fuels and performance-based emissions trading system for industries (Output-Based Pricing System (OBPS)); proceeds are returned to the province or territory where collected.
• Published proposed Clean Fuel Regulations, worked with key stakeholders on the Hydrogen Strategy for Canada and made investments to grow the clean fuels market through the Energy Innovation Program and the $1.5 billion Clean Fuels Fund.
• Launched the $2 billion Low-Carbon Economy Fund and the $200 million Climate Action and Awareness Fund.
• Joined the Global Methane Pledge to reduce methane emissions by at least 30% below 2020 levels by 2030.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas:

• The Government of Canada will expand the Low Carbon Economy Fund through a $2.2 billion recapitalization. The funding aims, to leverage further climate actions from provinces and territories, municipalities, universities, colleges, schools, hospitals, businesses, not-for-profit organizations, and Indigenous communities and organizations. The Low Carbon Economy Fund will include a new Indigenous Leadership Fund to support clean energy and energy efficiency projects led by First Nations, Inuit and Métis communities and organizations.
• To enhance long-term certainty, the Government of Canada will explore measures that help guarantee the price of carbon pollution. This includes, for example, investment approaches like carbon contracts for differences, which enshrine future price levels in contracts between the government and low-carbon project investors, thereby de-risking private sector low-carbon investments. This also includes exploring legislative approaches to support a durable price on carbon pollution.
• The Government of Canada will propose to invest $29.6 million to advance Indigenous Climate Leadership.
• The Government will accelerate regional growth opportunities and energy systems transformation through a $25 million investment in Regional Strategic Initiatives that will drive economic prosperity and the creation of sustainable jobs in a net-zero economy.
• The Government of Canada will release a plan to reduce methane emissions across the broader economy.

Buildings

PDF: 2030 ERP: Buildings (59 kB)

Transitioning Canada’s building stock to net-zero over the long term creates new opportunities to promote a low-carbon supply chain, adopt net-zero ready building codes, transform space and water heating, improve affordability through energy efficiency, and accelerate private financing and workforce development to support the sector’s transition.

What we’ve already done

• Established the $2.6 billion Greener Homes Grant which helps homeowners make their homes more energy efficient and grows domestic green supply chains.
• Launched the $1.5 billion Green and Inclusive Community Buildings program which provides funding to support projects that improve energy efficiency through retrofits, repairs or upgrades and new builds.
• Supported energy efficiency in Indigenous housing through the $48 million First Nation Infrastructure Fund, the $64.3 million Northern REACHE program and the $220 million Clean Energy for Rural and Remote Communities program.
• Launched the Public Buildings Retrofits Imitative and the Commercial Building Retrofit Initiative using the Canada Infrastructure Bank dedicated funding target of $2 billion for green infrastructure.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the buildings sector:

• The Government of Canada will invest $150 million to develop a national net zero by 2050 buildings strategy, the Canada Green Buildings Strategy. The Buildings Strategy will:
  • Develop a Low Carbon Building Materials Innovation Hub to drive further research, building code reform, and demonstration activities, all promoting the use of lower carbon construction materials (e.g., wood, steel, cement, etc.) in the built environment;
  • Develop regulatory, standards, and an incentive framework to support the transition off fossil-fuels for heating systems;
  • Develop an approach to require EnerGuide labeling of homes at the time of sale, and design a complementary Climate Adaptation Home Rating Program;
  • Launch a new Net Zero Building Code Acceleration Fund to accelerate adoption and implementation of the highest performance tiers of the national model energy codes, incentivizing stakeholder participation while addressing persistent challenges in Canada’s codes system and paving the way to a code for alterations for existing buildings;
  • Improve federal capacity and technical support to provinces, territories and key stakeholders for the development and adoption of net zero emission codes, and alteration to existing buildings codes; and,
  • Develop an approach to increase the climate resilience of the built environment.
• Supporting communities to upgrade homes and buildings, including affordable housing, is key to reaching Canada’s climate goals. To help meet those goals, the following investments are being made:
  • $458.5 million in contribution and loan funding to support the low-income stream of the Greener Homes Loan Program, which will support increased energy savings.
  • $33 million to implement a Greener Neighbourhoods Pilot Program, which will retrofit homes or units in up to six communities across the country. This support for community-level home retrofits aligns with the Net-Zero Advisory Body’s recommendation to seek out opportunities to decarbonize multiple buildings at once.
  • $200 million to support deep retrofits of large buildings through a retrofit accelerator initiative, which will provide help to address barriers to deep retrofits (such as audits or project management).
  • $183 million to support a decarbonized and climate resilient construction sector.

Going further

The Government of Canada will also explore additional opportunities, including:

• Mobilize private sector financing to support deep retrofits in existing residential, commercial and institutional buildings.
• Mobilize Indigenous sector financing to support deep retrofits and clean energy initiatives.
• Explore increased stringency of federal funding programs to avoid locking carbon into the building sector, for example through requirements for high performance new construction, deep energy retrofits, and addressing embodied carbon and resiliency.
• Review of CMHC’s market tools to promote climate compatibility in new construction and within the existing housing stock, and increase the stringency of energy efficiency standards of the National Housing Strategy programs.

Electricity

PDF: 2030 ERP: Electricity (47.7 kB)

Working towards net-zero electricity by 2035 will expand non-emitting energy across Canada, connect regions to clean power, and foster more clean, reliable, and affordable electricity supply. It will also help reduce emissions from other sectors, like industry, buildings, and transportation.

What we’ve already done

• Accelerated the phase-out of coal, implemented natural gas regulations and put a price on carbon pollution.
• Funded several programs to meet the rising demand for clean electricity including the $964 million Smart Renewable Electrification Pathways Program, the $99 million Smart Grids program and the $200 million Emerging Renewable Power Program.
• Launched the Small Modular Reactors (SMR) Action Plan to advance the potential of using this technology as a way to reduce emissions.
• Provided $340 million to fund projects to support the transition off diesel in rural and remote Indigenous communities.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the electricity sector:

• Continued and enhanced support for the deployment of commercially ready renewable energy technologies will support grid decarbonization in the near term. Looking out to 2050, investments in emerging technologies such as geothermal, tidal, SMRs, carbon capture and storage, and electricity storage will allow Canada to be a world leader in these new technologies. To support the development and deployment of these technologies, the Government will make additional investments:
  • $600 million to the Smart Renewables and Electrification Pathways Program to support additional renewable electricity and grid modernization projects;
  • $250 million to support predevelopment work of large clean electricity projects, in collaboration with provinces, through the Electricity Predevelopment Program, and;
  • $2.4 million for the creation of the Pan-Canadian Grid Council to provide external advice to the Government of Canada to promote clean electricity infrastructure investments.
• To help connect regions with clean power, the Government will:
  • Supported by a $25 million investment, stablish Regional Strategic Initiatives to work with provinces, territories and relevant stakeholders to develop regional net-zero energy plans.
  • Lead engagement across Atlantic Canada to shape a clear path forward for the Atlantic Loop initiative.
  • Support de-risking and accelerating the development of transformational, nation-building inter-provincial transmission lines that connect supplies of clean power to locations that currently rely heavily on fossil fuels for power generation.

Going further

The Government of Canada also commits to explore additional opportunities, including:

• The Government commits to further implement the SMR Action Plan including establishing a SMR Leadership Table to advance Canada’s SMR future and ensure participants benefit from expert advice and guidance, and explore opportunities to expand the development and deployment of SMRs at home and abroad.
• Developing a Clean Electricity Standard (CES) to achieve a net-zero electricity grid by 2035 will provide a clear path forward and certainty for industry. The Government released a discussion paper and launched a collaborative process with provinces, territories, and Indigenous partners, as well as industry, civil society to inform the design and scope of the standard.

Heavy industry

PDF: 2030 ERP: Heavy industry (44.1 kB)

Emissions reductions will come from efforts to decarbonize large emitters, and strengthening Canada’s mining sector. Enhancing clean growth in the sector will create new job opportunities, enhance Canada’s industrial low-carbon advantage in global markets, and create investment opportunities in Canadian clean technology.

What we’ve already done

• Launched the $8 billion Strategic Innovation Fund – Net Zero Accelerator to support the decarbonization of Canada’s largest industrial emitters through adoption of clean technology.
• Proposed in Budget 2021 to reduce by half the general corporate and small business income tax rates for businesses that manufacture zero-emission technologies.
• Launched the $155 million Clean Growth Program in 2017 to invest in clean technology research, development, and demonstration in Canadian energy, mining, and forestry sectors.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the heavy industry sector:

• $194 million to expand the Industrial Energy Management System to support ISO 50001 certification, energy managers, cohort-based training, audits, and energy efficiency-focused retrofits for key small-to-moderate projects that fill a gap in the federal suite of industrial programming.
• Develop a comprehensive Carbon Capture and Utilization (CCUS) Strategy to guide the development and deployment of CCUS technologies to mitigate GHG emissions from a range of industrial sectors in Canada, such as steel, cement, chemicals, and the oil and gas sector.

Oil and gas

PDF: 2030 ERP: Oil and gas (64.8 kB)

There is an opportunity to transform the sector into the cleanest global oil and gas producer, while also moving to provide low-carbon and non-emitting energy products and services in a manner that will ensure economic competitiveness, prosperity and create good jobs for Canadians.

What we’ve already done

• Established federal regulations requiring the oil and gas sector to reduce methane emissions by 40-45% below 2012 levels by 2025.
• Proposed Clean Fuel Regulations will reduce the carbon intensity of liquid fossil fuels, including reducing emissions from oil and gas production.
• Launched the $750 million Emissions Reduction Fund (ERF) – Onshore Program to support oil and gas companies to invest in green solutions.
• Launched the Energy Innovation Program (EIP) that includes the Canadian Emissions Reduction Innovation Network to accelerate development, validation and deployment of clean technologies, and the Carbon Capture Utilization, and Storage (CCSU) Stream to advance CCUS technologies.
• Developing an investment tax credit for capital invested in carbon capture, utilization, and storage (CCUS) projects to encourage the development and deployment of CCUS technologies.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the oil and gas sector:

• Capping emissions: The Government of Canada is committed to cap and cut emissions from the oil and gas sector at the pace and scale needed to get to net zero by 2050. The details of how best to design and implement this cap will require close collaboration with industry, provinces, stakeholders and Indigenous communities. A discussion paper will be released in Spring 2022.
• Advancing carbon capture, storage and utilization (CCUS): The Government of Canada is supporting development of CCUS technology and working to provide policy certainty to facilitate the development and deployment of this technology. This includes the details of a new CCUS investment tax credit that will be provided in soon. The Government will also continue efforts to increase coordination between public and private sectors to eliminate regulatory barriers and facilitate market growth.
• Further reducing methane emissions: The Government has committed to go beyond the current regulatory requirements (aimed at a 40-45% reduction by 2025) and to develop new measures to reduce oil and gas methane emissions by at least 75% below 2012 levels by 2030 through regulations.
• Eliminating subsidies for fossil fuels: The Government is committed to eliminating inefficient fossil fuel subsidies, and developing a plan to phase-out public financing for the fossil fuel sector, including by federal Crown corporations.
• Supporting workers: The energy needs of Canada and the world will grow in the decades to come, while global demand for oil and gas will decline, and increased green investments will create jobs The Government is working with provinces and businesses to get the transition right – so that we achieve our pollution reduction goals and ensure economic competitiveness, prosperity and good jobs for Canadians.

Transportation

PDF: 2030 ERP: Transportation (52.2 kB)

Actions to reduce emissions will enable cleaner public transit, more active transportation, make ZEVs more affordable and accessible, and provide cleaner modes of air, marine, and rail travel. Efforts will also create new jobs in areas like ZEV manufacturing and public transit.

What we’ve already done

• Set a mandatory target for 100% of new light-duty cars and passenger truck sales are zero-emission by 2035.
• Established the $660 million Zero-Emission Vehicles (iZEV) Program which provides incentives and encourages the adoption of ZEVs.
• Provided $14.9 billion in funding to support public and active transportation infrastructure including zero-emissions busses, new subway lines, light-rail transit and streetcars and improved rural transit.
• Provided over $450 million since 2016 for infrastructure programs supporting deployment, demonstrations and codes and standards for EV charging and refueling stations across Canada.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the transportation sector:

• Develop a light duty vehicle (LDV) ZEV sales mandate, which will set annually increasing requirements towards achieving 100% LDV ZEV sales by 2035, including mandatory interim targets of at least 20% of all new LDVs offered for sale by 2026 and at least 60% by 2030.
• Launch an integrated strategy to reduce emissions from medium-and heavy-duty vehicles (MHDVs) with the aim of reaching 35% of total MHDV sales being ZEVs by 2030. In addition, the Government will develop a MHDV ZEV regulation to require 100% MHDV sales to be ZEVs by 2040 for a subset of vehicle types based on feasibility, with interim 2030 regulated sales requirements that would vary for different vehicle categories based on feasibility, and explore interim targets for the mid-2020s.
• In support of these objectives, the following investments will be made:
  • $1.7 billion to extend the Incentives for Zero-Emission Vehicles Program (iZEV) for light-duty vehicles for three years. Budget 2022 will provide additional detail on the program’s design.
  • $400 million in additional funding for ZEV charging stations, in support of the Government’s objective of adding 50,000 ZEV chargers to Canada’s network.
  • In addition, the Canada Infrastructure Bank will invest $500 million in large-scale ZEV charging and refueling infrastructure that is revenue-generating and in the public interest.
  • 547.5 million for a purchase incentive program for MHDVs. Purchase eligibility date will be announced in Budget 2022.
  • $199.6 million to retrofit large trucks currently on the road.
  • $33.8 million for hydrogen trucking demonstration projects that address barriers to long-haul zero-emission trucking commercialization – including technical, regulatory and standards challenges.
  • $2.2 million to support Greening Government fleet electrification commitments.

Going further

The Government of Canada also commits to explore additional opportunities, including:

Rail

• Building on successive voluntary agreements with industry, develop an action plan to decarbonize rail in line with Canada’s net-zero by 2050 goal, which could include efforts to advance zero-emission locomotives and locomotive electrification.

Aviation

• Developing a whole-of-government approach on the long-term decarbonization of aviation, informed through ongoing engagement with industry and other stakeholders on a renewed action plan to reduce emissions from aviation, which could include initiatives to expand the production and use of low-carbon sustainable aviation fuel, and efforts to decarbonize and electrify airport operations in Canada.
• Working with international partners to increase ambition in International Civil Aviation Organization (ICAO) emission reduction goals and measures.

Marine

• Developing a national action plan to enable the marine sector to reduce its emissions, which could include engagement with stakeholders on energy efficiency/carbon intensity requirements for domestic vessels in-line with requirements for international vessels.
• Working with international partners to develop measures to reduce black carbon in the Arctic from international shipping.

Off-road

• Pursuing zero-emission standards for new off-road small spark-ignition engines (such as lawn and garden equipment). The Government of Canada could also investigate the potential to advance zero-emission technologies and clean fuels for other types and applications of off-road equipment (e.g., small marine engines and recreational vehicles, and larger equipment found in the agriculture, construction, mining and port sectors.

Other

• Working with other levels of government, and in collaboration with key federal partners on additional emission reductions from transportation (e.g., urban mobility and local goods movement).
• Explore opportunities to link investments in infrastructure, particularly public transit, to urban form (e.g. urban mobility of people and goods, optimizing modal shift) and housing outcomes.

Agriculture

PDF: 2030 ERP: Agriculture (53.6 kB)

Enhancing climate action will create opportunities to leverage agricultural lands to store carbon, stimulate the adoption of new, clean technologies on farms, and support farmers in adopting greener on-farm practices to reduce emissions.

What we’ve already done

• Launched the $3 billion, five-year, Canadian Agricultural Partnership, cost-shared with provinces and territories, that supports on-farm environmental stewardship programs.
• Launched the $165.7 million Agriculture Clean Technology Program to support development and adoption of clean technology.
• Established the $385 million Agricultural Climate Solutions Fund to support farming practices that tackle climate change.
• Committed to set a national fertilizer emission reduction target of 30% below 2020 levels by 2030.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the agriculture sector:

• Provide $470 million to the Agricultural Climate Solutions: On-Farm Climate Action Fund. This funding will allow the program to top-up funding for some current successful applicants, broaden support to additional key climate mitigation practices, extend the program past its current end date of 2023/24, and support adoption of practices that contribute to the fertilizer emissions target and Global Methane Pledge
• $150 million for a resilient agricultural landscapes program to support carbon sequestration, adaptation and address other environmental co-benefits.
• Provide $330 million to triple funding for the Agricultural Clean Technology program by broadening and expanding the scope of the program.
• Invest $100 million in transformative science for a sustainable sector in an uncertain climate and net-zero economy for 2050. This funding will support fundamental and applied research supporting a path to net zero emissions, knowledge transfer, and developing metrics.

Going further

The Government of Canada will also explore additional opportunities, including:

• As part of the next Agricultural Policy Framework, ensure environmental considerations are at the core of the framework, and update business risk management programs, including to integrate climate risk management, environmental practices and climate readiness.
• Advance a Green Agricultural Plan for Canada, in consultation with the agriculture and agri-food sector, Indigenous Peoples, and other stakeholders, to establish a long-term vision and approach to agri-environmental issues in order to advance the sustainability, competitiveness, and vitality of the sector.
• Explore variety of tools to reduce emissions and expedite the application of existing technologies or practices.

Waste

PDF: 2030 ERP: Waste (44.6 kB)

Cutting pollution from waste brings new opportunities for job creation and local economic transformation. Moving towards a circular economy can also increase the value of waste emissions through transforming raw material into fertilizers and renewable energy.

What we’ve already done

• Committed to develop new federal regulations to increase number of landfills that collect and treat methane.
• Launched the $20 million Food Waste Reduction Challenge to incentivize development and deployment of innovative solutions to reduce food waste across the supply chain.
• Committed to place a ban on harmful single-use plastics, such as straws, plastic bags, cutlery, etc.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to reduce emissions in the waste sector:

• Put in place landfill methane regulations: The Government of Canada is proposing new regulations under the Canadian Environmental Protection Act (CEPA) to significantly reduce methane emissions from municipal solid waste landfills by 2030, and will continue to engage and work with provincial and territorial governments, Indigenous Peoples, municipalities, industry, non-governmental organizations, and other Canadians to establish to develop this regulatory framework.
• Advance a circular economy: A growing number of countries have put circular economy strategies in place, and circularity is increasingly referenced in climate plans as a means to achieve increased GHG reductions; almost 80 countries refer to circularity in their Nationally Determined Contributions. The circular economy has potential to offer new opportunities for sustainable economic growth while supporting net zero strategies in Canada. Moving forward, the Government will work with others to explore what opportunities greater circularity could offer in a Canadian context.

Going further

The Government of Canada also commits to explore additional opportunities, including:

• Finalize the Food Waste Reduction Challenge and explore opportunities to continue supporting innovators working to prevent and divert food waste.
• Examine opportunities to help all players along the food supply chain to commercialize and adopt ways to eliminate, reduce or repurpose food waste.
• Explore approaches to support waste and water capital projects, plans, studies, and to accelerate deployment and scaling-up of waste and water solutions.

Nature-based solutions

PDF: 2030 ERP: Nature-based solutions (42.3 kB)

Efforts to protect, manage, and restore Canada’s lands and waters will reduce emissions while bringing co-benefits to society, like cleaner air, better climate resilience and protection for communities from climate risk, and more opportunity for Canadians to enjoy nature.

What we’ve already done

• Established the $4 billion Natural Climate Solutions Fund, which supports Canada’s commitment to plant 2 billion trees, funds projects that conserve, protect and restore habitats that store and capture carbon and helps farmers tackle climate change on agricultural lands.
• Launched the $200 million Natural Infrastructure Fund which supports large natural infrastructure projects.
• Continued to move forward on our commitment to protect 25% of Canada’s land and 25% of Canada’s waters by 2025, working towards 30% of each by 2030.
• Committed more than $1 billion in climate finance to support nature-based solutions in developing countries over the next 5 years.

Key new actions

To meet Canada’s 2030 emissions reduction target and reach net zero by 2050, the Government of Canada will focus on the following key areas to advance nature-based solutions:

• Invest an additional $780 million to the Nature Smart Climate Solutions Fund to deliver additional emission reductions from nature-based climate solutions. The Fund supports projects that conserve, restore and enhance wetlands, peatlands, and grasslands to store and capture carbon.

Going further

The Government of Canada also commits to explore additional opportunities, including:

• Explore the potential for negative emission technologies in the forest sector, particularly in facilities where biomass is used as an energy source.