Canada

Overall rating
Highly insufficient
Policies & action
Highly insufficient
< 4°C World
Domestic target
Almost Sufficient
< 2°C World
Fair share target
Insufficient
< 3°C World
Climate finance
Highly insufficient
Net zero target

year

2050

Comprehensiveness rated as

Average
Land use & forestry

historically considered both a

Source & Sink

Overview

Canada seems incapable of kicking its oil and gas addiction. It approved an offshore oil and gas megaproject in April 2022, even though the IEA says no new developments are needed if we are serious about achieving net zero. It continues to support the Trans Mountain pipeline, even though its own budget watchdog says the pipeline will no longer be profitable as costs to complete it have ballooned. And it seems determined to export LNG from its east coast to Europe even though this type of development puts the 1.5°C limit at risk.

Canada’s emissions are finally starting to trend downwards as the government continues to implement its climate policy agenda, but there remains a significant gap between current policies and Canada’s NDC target - and 1.5°C compatibility. Implementing planned policies will go some way to closing that gap, but further action is needed.

The government’s own Environment Commissioner released a damning report in November 2021 outlining 30 years of the government’s failure to meet its targets and reduce greenhouse gas emissions. The commissioner stressed the need for strong plans, the implementation of those plans, and called out policy incoherence, like the Trans Mountain purchase.

Canada’s overall CAT rating remains unchanged at ‘Highly insufficient’. Canada needs stronger targets and faster policy implementation. To quote the commissioner: ‘we cannot afford a fourth decade of failure on climate action’.

Canada updated its long-term strategy in October 2022, which explores a number of different scenarios capable of achieving net zero emissions in 2050, but does not set a particular pathway for the country to follow, nor does it outline the policies and measures needed to achieve net zero. 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 gas in 2050.

Overall rating
Highly insufficient

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. 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, needs to provide additional support to others.

Policies & action
Highly insufficient

Our rating of Canada’s policies and action is unchanged at “Highly Insufficient”, however Canada is inching towards a rating improvement as emissions start to fall. That said, it is still far from 1.5°C compatibility on a global least cost basis. If all countries were to follow Canada’s approach, warming could reach over 3°C and up to 4°C.

If Canada can successfully implement all its planned measures, it would go a long way to closing its ambition gap and its rating would improve to “Insufficient”. The planned policy scenario is less ambitious than our last assessment as we have now excluded Canada’s hydrogen policies due to concerns raised by its environment commissioner regarding the emissions reduction potential.

The speed and scale of Canada’s climate policy implementation does not match the urgency of the climate crisis and much more work on this front is required. Emissions in 2030 are projected to be 602-656 MtCO2e (excl. LULUCF contributions) or 11-19% below 2005 levels, lower than our last update, due to the impact of the pandemic and continued policy implementation, but a far cry from the 345 MtCO2e level needed to be 1.5°C compatible.

Since our last update in September 2021, Canada has continued to advance on implementing its carbon pricing increases through to 2030, adopted some of its outstanding regulations and codes (clean fuel standard, GHG offset programme, building code revisions) and released its methane strategy and guidance on phasing out public finance for fossil fuels, but we are still waiting for other promised regulations and strategies (EV sales mandate, 2035 net zero grid, implementation of the thermal coal export ban, green buildings, and fertiliser emissions reduction target), some of which will take years to finalise (oil and gas methane target, landfill methane). Canada also missed an opportunity to support home EV charging infrastructure in its latest building code revisions.

The country’s only commercial CCS-abated coal-fired power plant continues to face problems and serves as a reminder of the dangers of excessive reliance on CCS.

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

Domestic target
Almost Sufficient

In July 2021, Canada submitted a stronger NDC target. It did not submit a further NDC update in 2022, contrary to what it agreed under the Glasgow Climate Pact.

Canada will 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% 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.

The CAT’s assessment of Canada’s total fair share contribution takes into account its emissions reduction target and its climate finance.

Fair share target
Insufficient

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.

Climate finance
Highly insufficient

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 its fair share target rating, and the CAT rates Canada’s overall fair share contribution as “Insufficient”.

Land use & forestry
Source & Sink

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 according to the national inventory, 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.

Net zero target
Average

Canada passed the Canadian Net-Zero Emissions Accountability Act in June 2021, enshrining its 2050 net zero 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 does not set a particular pathway for the country to follow, nor outline 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 gas in 2050.

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

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