Canada

Canada’s climate action appears to be stalling, even as the country faces intensifying impacts—most recently enduring its second worst wildfire season on record in 2025, second only to 2023. Although national emissions are on a downward trend, this progress remains fragile and at risk due to policy delays, rollbacks, and a lack of decisive new measures.

While the federal government has made progress on implementing policies from the 2030 Emissions Reduction Plan, including the national zero-emission vehicles (ZEV) sales mandate and the Clean Electricity Regulations, other critical measures such as strengthened regulations to curb methane emissions in the oil and fossil gas sector and the introduction of an emissions cap for the same sector are still pending. In addition, the removal of the consumer carbon price in 2025 under new Prime Minister Mark Carney marks a significant setback, undermining one of the most effective tools for reducing emissions and casting further doubt on Canada’s ability to meet its climate targets.

Implementing all current and proposed climate policies is critical to narrowing the gap to Canada’s 2030 climate target, but governments at all levels will need to implement strengthened or additional policies to fully close it. Even if fully achieved, Canada’s 2030 target itself is not ambitious enough to be 1.5°C compatible. Canada’s 2035 target, submitted in February 2025, represents only a modest increase in ambition compared to 2030, further widening the gap between Canada’s targets and a 1.5°C compatible pathway.

The CAT has downgraded Canada’s overall rating to ‘Highly Insufficient,’ primarily due to weakened policy ambition, slow implementation, and a widening gap between current emissions levels and Canada’s 2030 target.

Despite 2025 marking the second worst wildfire season on record, Canada continues to develop its fossil fuel industry. The federal government approved the Bay du Nord offshore oil and fossil gas megaproject in 2022, continues to provide financing to fossil fuel companies and infrastructure—including the enormously expensive Trans Mountain pipeline—and is advancing several major LNG projects.

Meanwhile, new federal legislation could fast-track even more fossil fuel development. Crude oil production was close to record levels in early 2025, while coal exports stayed elevated after their record-breaking surge in 2023. Canada also continues to export oil and fossil gas at such a scale that the resulting emissions from their final combustion exceed the country’s total domestic emissions, though these exported emissions are not included in the CAT’s rating.

Nevertheless, Canada is making progress in implementing policies that accelerate the deployment of proven low-carbon technologies, but gaps remain in ambition and implementation:

• The new ZEV sales mandate, targeting 60% of new passenger car and light-duty truck sales to be zero-emissions by 2030 and 100% by 2035 is a step in the right direction. However, for 1.5˚C compatibility, this target should be set at — or close to — 100% by 2030. Although the mandate initially included a 20% ZEV sales target for 2026, the federal government paused this requirement in September 2025 and launched a 60-day review of the policy.
• The industrial carbon pricing scheme, with its steadily increasing price level, could theoretically set clear signals for polluters, but faces serious design flaws, provincial resistance, and ongoing political pressure that undermine its overall effectiveness.
• In the electricity sector, new Clean Electricity Regulations alongside a suite of additional government programmes and policies are driving the transition to low-carbon power. However, exemptions for, and continued investment in, fossil gas generation mean Canada will miss its original 1.5°C-compatible target for a fully decarbonised grid by 2035, now aiming for 2050 instead.
• In the buildings sector, government programmes are driving energy efficiency and electrification, and new regulations are planned to phase out oil heating systems in new construction from 2028. However, there are still no plans to phase out fossil gas.

With the 2025 federal election resulted in a minority government led by Mark Carney, the durability of recent climate progress is now uncertain. While Carney’s background in climate finance has raised expectations for continued climate action, his government’s priorities remain unclear. Climate change received little emphasis in the new Prime Minister’s mandate letter, and Carney has signalled support for new oil and fossil gas infrastructure—casting doubt on the government’s willingness to phase out fossil fuels.

The recent removal of the consumer carbon price under Carney’s leadership has weakened Canada’s already insufficient climate policy framework. In late 2025, the federal government is expected to release an update to the 2030 Emissions Reduction Plan, released in March 2022 under the previous Trudeau Liberal government. Recent signals from the government, including reluctance to commit to the 2030 and 2035 targets and indications that key measures like the proposed oil and fossil gas emissions cap could be abandoned, raise serious concerns that Canada could backslide further on its climate commitments.

To move forward ambitiously on climate action, Canada could:

• Strengthen its 2030 and 2035 emissions reduction targets to align with a 1.5°C compatible pathway.
• Ensure that queued policies are finalised in 2025—including methane regulations in the waste, oil and fossil gas sectors, the phase-out of coal exports, and the cap on emissions from oil and fossil gas production—as well as strengthening existing measures like industrial carbon pricing to narrow the gap between current emissions levels and Canada’s targets
• Stop approving new oil and fossil gas projects, end subsidies, and establish a long-term vision to phase out fossil fuel production altogether.
• Stop enabling coal exports from the US passing through its territory for shipment from Canadian ports.
• Prioritise proven, cost-effective solutions like renewables and electrification as the backbone of decarbonisation.
• Limit reliance on uncertain and costly CCS to the degree possible, prioritising a swift transition from fossil fuels to clean energy. Unless Canada raises the ambition of its 2030 and 2035 targets and decisively implements and strengthens its climate policies to achieve real emissions reductions, the country will remain off track to meet its climate commitments and do its part to limit warming to 1.5°C.

The CAT rates each country’s targets and policies against (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which, in the absence of a better method, are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates Canada’s climate target, policies and climate finance as 'Highly Insufficient' overall. The 'Highly Insufficient' rating indicates that Canada’s climate policies and commitments are not consistent with the Paris Agreement’s 1.5°C temperature limit.

Canada’s 2030 emissions reduction target is consistent with 2°C of warming when compared to modelled domestic emissions pathways. However, Canada’s current policies, even if fully implemented, are not enough to meet this target and would instead result in a pathway consistent with 4°C of warming. This highlights a significant gap between Canada’s stated ambitions and its current policy trajectory. Canada is also far from meeting its fair-share contributions to climate change.

To improve its rating, Canada should strengthen its 2030 emissions reduction target to at least 53% below 2005 levels, implement policies necessary to reach this goal, and significantly increase its financial support for climate action in developing countries in line with its fair share contribution to climate change mitigation.

Our rating of Canada’s policies and action has worsened to 'Highly Insufficient' as policy delays and rollbacks stall progress. Emissions in 2030 are projected to reach 645–647 MtCO₂e (excl. LULUCF) or 15% below 2005 levels. This is far above Canada’s 2030 target of 426–484 MtCO₂e and the 381 MtCO₂e level needed for 1.5°C compatibility. If all countries followed Canada’s current approach, warming could reach over 3°C and up to 4°C.

Since our last update in August 2024, Canada has made progress in adopting some key regulations, including the national zero-emissions vehicle (ZEV) sales mandate and the Clean Electricity Regulations. However, the final Clean Electricity Regulations were ultimately weakened—delaying the timeline for achieving a net-zero electricity grid from 2035 to 2050. In addition, the federal government has recently paused the 2026 ZEV target and initiated a full policy review. Several other promised measures, including the strengthened oil and fossil gas methane regulations and a cap on emissions from oil and fossil gas emissions, remain stalled. Most notably, the government removed the consumer carbon price—a central pillar of its climate plan—dealing a major setback to Canada’s policy progress. Industrial carbon pricing remains in place and continues to be the most significant driver of emissions reductions, though gaps in coverage, insufficient stringency, and provincial pushback threaten its effectiveness.

Mark Carney replaced Justin Trudeau as Liberal leader and won a minority government in April 2025. While Carney’s climate credentials raised expectations, his government’s priorities remain uncertain at best. His platform included commitments to finalise the clean technology investment tax credits, invest in energy retrofits and EV infrastructure, and strengthen industrial carbon pricing. However, he also committed to (and followed through with) removing the consumer carbon price, signalled support for new fossil fuel infrastructure, and pledged to make Canada a “world leader” in CCS. The federal government is expected to release an updated climate plan in late 2025.

For more detail, see the policies and action section here.

In February 2025, Canada submitted its latest NDC to the UNFCCC, outlining its new target to reduce emissions by 45–50% below 2005 levels by 2035. However, the submission did not increase ambition for 2030, with Canada maintaining its existing commitment to cut emissions by at least 40–45% below 2005 levels by 2030 (incl. LULUCF). For more information on Canada’s 2035 target, see our full analysis in the 2035 tab here.

The 2030 target falls short of an emission reduction of at least 53% below 2005 level (excl. LULUCF) needed to be 1.5°C compatible on a global least-cost basis. The CAT rates Canada’s domestic target as 'Almost sufficient'. Canada is not on track to meet this target under current policies, nor do its planned policies fully close the gap.

From a fair share perspective, we rate Canada’s 2030 NDC target as 'Insufficient', meaning it is at the least stringent end of what would be a fair share of global effort. If all countries were to follow Canada’s approach, warming could reach over 2°C and up to 3°C. Canada needs to strengthen its domestic target and provide additional financial support for emissions reductions in developing countries to improve on this rating.

The CAT’s assessment of Canada’s total fair share contribution takes into account its emissions reduction target and its climate finance. Canada’s climate finance is not sufficient to improve its fair share target rating, and the CAT rates Canada’s overall fair share contribution as 'Insufficient'.

Canada’s international public climate finance contribution is rated 'Highly insufficient'. In 2021, the government announced a doubling of its climate finance over the 2021–2026 period. Canada retains a poor rating, as its contributions to date have been low compared to its fair share. Canada also continues to provide support to fossil fuel developments abroad. To improve its rating, Canada needs to stop funding fossil fuels overseas and accelerate commitments to increase climate finance.

Land use and forests play a complex role in Canada’s greenhouse gas balance, acting as both emissions sources and sinks. Historically, the sector has been a net source of emissions, most recently contributing approximately 4 MtCO₂e in 2023 and 51 MtCO₂e in 2022. Despite this trend, the federal government is projecting significant emissions removals from the sector by 2030, as high as 41 MtCO₂e in 2030 .

We highlight this sector for Canada because, in 2023, both the emissions and removals from LULUCF were each equivalent to about 5% of total gross emissions, and because the federal government places considerable importance on land use and forestry in meeting its 2030 climate target. Given the sector’s scale, even moderate changes in emissions or removals can significantly impact Canada’s overall greenhouse gas balance. As such, land use and forestry could either remain a major source of emissions or, with effective management, become a key contributor to achieving Canada’s climate goals. Either way, Canada should present a separate target for LULUCF, for transparency.

Canada passed the Canadian Net-Zero Emissions Accountability Act in June 2021, enshrining its 2050 net zero target—as well as its 2030 target—into law. Canada updated its long-term strategy in October 2022. The strategy explores a number of different scenarios capable of achieving net zero emissions in 2050, but neither sets a particular pathway for the country to follow nor outlines policies and measures needed to achieve its net zero target. Reliance on LULUCF and CDR could be as high as 45% of Canada’s emissions in 2020 (or 301 MtCO₂e), which calls into question the credibility of the target. Under all scenarios, Canada is still producing and exporting oil and fossil gas in 2050.

We evaluate the net zero target’s comprehensiveness as 'Average'. Full details of the assessment are here.