Canada

Canada has been feeling the brunt of climate impacts, with deadly heat waves and devastating forest fires on its West Coast. Recent climate policy developments, while positive, are insufficient to address the climate crisis. The country’s new and stronger 2030 target is not quite compatible with limiting warming to 1.5°C. Its revised climate plan and additional measures announced in the 2021 federal budget are insufficient to meet that target. Canada continues to face challenges in implementing policies. We estimate that Canada has missed its 2020 target, even with the pandemic emissions drop. The Trudeau government has called an election for September 20, giving Canadians the opportunity to have their say on the state of climate action in the country.

The CAT rates Canada’s climate target, policies and finance as ‘Highly Insufficient’. 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. If fully implemented, Canada’s current policies are not enough to achieve this target and are only in line with 4°C warming. Canada is also not meeting its fair-share contributions to climate change and in addition to strengthening its targets and policies also needs to provide additional support to others.

Canada needs to walk the talk when it comes to policy implementation. We rate Canada’s policies and action as “Highly Insufficient” when compared to modelled domestic pathways. Canada did release a revised climate plan in December 2020, and has announced further measures this year, largely in its 2021 Budget. If Canada can successfully implement all of these announced plans, it would go a long way to closing the ambition gap and its rating would improve to “Almost sufficient”. It would also help Canada improve its overall CAT rating by one level.

Recent policy developments include

• Increasing its carbon price, which will now rise by CAD 15 per year from 2023-2030, to a total of CAD 170 in 2030. Canada has had mandatory carbon pricing in effect since 2019.
• Moving forward its 100% sales target for zero-emissions passenger vehicles from 2040 to 2035. While a positive move, this target needs to be at 95% or higher by 2030 to be 1.5°C compatible.
• Committing to establish new targets for reducing methane emissions in the oil and gas sector for 2030 and 2035 as well as amending the current regulations in order to achieve those targets. The current target, to reduce remissions by 40-45% below 2012 levels by 2025, was adopted in 2018.
• Setting a 30% reduction target below 2020 levels for emissions from fertilisers, which have substantially increased since 2005.
• Starting to implement its two billion trees over ten years commitment in the 2021 growing season. In its latest inventory, Canada is now reporting the land sector has been a net source of emissions since 2015, which only serves to highlight the importance of enhancing nature-based solutions.
• Clarifying its policy stance on thermal coal mining, with the government finding that any new mines or expansions of existing mines would likely cause unacceptable environmental effects, thus making it very unlikely that any further thermal coal mining will be approved in the country. Canada had been facing criticism for considering the approval of a thermal coal mining project, given that it is a founding member of the Powering Past Coal Alliance, which is committed to the phase-out of traditional coal-fired electricity.
• Advancing on regulations related to its Clean Fuel Standard and GHG Offset programme.

For every step forward, Canada also seems to take two steps back. It continues to expand its pipeline capacity for fossil fuels, even though modelling by its own energy regulator shows that the additional capacity exceeds available supply under even relatively unambitious climate policy. This is against the backdrop of a continued exodus of companies and investors from the sector. In April 2021, New York’s state pension fund was the latest to announce it was divesting from six Canadian oil sand companies. Some of the pandemic relief measures announced last year will also effectively lower the cost of compliance for its methane regulations in the oil and gas sector.

Canada’s latest emissions projections for 2030 transport emissions have also increased by 16% compared to last year’s figure, due, in part, to the rollbacks for passenger car and truck standards that occurred under the Trump Administration. The Biden administration is working on reversing these rollbacks. Canada has promised to align both the light and heavy-duty vehicle regulations for post-2025 models with the most stringent American standards either at the federal or state level. As transport emissions are Canada’s second largest source, action in this sector is critical.

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

In July 2021, Canada submitted a stronger NDC target. It will now cut emissions by at least 40-45% below 2005 levels by 2030, up from the previous target of 30% (incl. LULUCF). While stronger, the target still falls short of the at least 54% domestic reduction (excl. LULUCF) needed to be 1.5°C compatible. The CAT rates Canada’s domestic target as “Almost sufficient”. Policies implemented to date are far insufficient to meet this target.

From a fair share perspective, we rate Canada’s NDC target as ‘Insufficient’. Canada needs to strengthen its domestic target and provide additional support for emissions reductions achieved in developing countries to improve on this rating.

Canada’s international public climate finance contribution is rated “Highly insufficient.” The government recently announced a doubling of its climate finance over the next five years. While a positive move, Canada retains a poor rating as its contributions to date have been low compared to its fair share. Canada also continues to provide substantial 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.

Canada’s climate finance is not sufficient to improve the fair share target rating, and the CAT rates Canada’s overall fair share contribution as “Insufficient”.

Land use and forests in Canada are both a significant source and significant sink of emissions. Although net emissions for land use and forests in Canada are close to zero, underlying this are strong emissions from harvested wood products that are balanced by emissions removals in managed forests. Both the sources and sinks are independently greater than 20% of emissions excluding LULUCF and we therefore highlight the sector for Canada. If either of the source or sink components change, net emissions will also change and there is potential for land-use and forests to become either a stronger contributor to overall emissions sources or removals.

Canada passed the Canadian Net-Zero Emissions Accountability Act in June 2021 which enshrines its 2050 net zero target into law. The act also mandates the setting of intermediary targets at five-year intervals (2030, 2035, 2040, 2045), and the requirement to develop emission reductions plans for these targets. The emissions reduction plan for the 2030 target, including an interim emissions reduction objective for 2026, is due by the end of 2021.

While Canada’s Net Zero Act has some positive measures, it does not follow good practice on a number of other aspects, such as including emissions from international aviation and shipping into its target.

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