Canada

Canada aims to cut emissions by at least 40-45% below 2005 levels by 2030. It submitted a stronger target in 2021, but did not revise its target further in 2022, contrary to what it agreed under the Glasgow Climate Pact.

Under its domestic climate legislation, Canada is required to set its 2035 target by 1 December 2024.

Canada passed the Canadian Net-Zero Emissions Accountability Act in June 2021 which enshrines its 2050 net zero target into law. Canada updated its long-term strategy in October 2022.

The CAT rates NDC targets against what a country should be doing within its own borders as well as what a fair contribution to achieving the Paris Agreement’s long-term temperature goal would be. For assessing targets against the fair share target, we consider both its domestic reductions and any emissions it supports abroad through the use of market mechanisms or other ways of support. Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.

As Canada has not defined international and domestic components of its NDC, we use the NDC target emissions level for both ratings.

The CAT rates Canada’s NDC target as “Almost sufficient” when compared to modelled domestic pathways and as “Insufficient” when compared to its fair share emissions allocation.

The “Almost sufficient” rating indicates that Canada’s NDC target in 2030 is not yet consistent with the 1.5°C temperature limit but could be, with moderate improvements. If all countries were to follow Canada’s approach, warming could be held below—but not well below—2°C. In the graph above, the ‘domestic target gap’ shows the difference between where Canada’s updated NDC target is and where it would need to be to be 1.5°C compatible based on global least cost modelling.

We rate Canada’s 2030 NDC target as “Insufficient” when compared with its fair share emissions allocation. The “Insufficient” rating indicates that Canada’s fair share target in 2030 needs substantial improvements to be consistent with the 1.5°C temperature limit. Canada’s target is at the least stringent end of what would be a fair share of global effort, and is not consistent with the 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort. If all countries were to follow Canada’s approach, warming would reach over 2°C and up to 3°C. To close the ‘fair share gap’ shown in the graph above, Canada either needs to begin supporting emission reductions abroad (on top of its domestic reductions, not as a means to reach its current NDC target level) or increase its provision of climate finance.

Canada’s international climate finance is rated “Highly insufficient” (see below) and is not enough to improve Canada’s fair share rating.

Canada’s international public climate finance contribution is rated “Highly insufficient.”

In June 2021, Canada announced a doubling of its climate finance commitment to CAD 5.3bn over the next five years (Government of Canada, 2021d). The support will cover mitigation, adaptation and loss and damage measures, though the entire CAD 5.3bn has not yet been allocated (Government of Canada, 2022c). Canada is increasing the portion of grant funding from 30 to 40%. In 2015, Canada committed to CAD 2.65bn over five years. While the doubling of climate finance is a positive, its CAT climate finance rating is still ‘Highly insufficient’ as its contributions to date (OECD, 2022) have been low compared to its fair share. The CAT weighs absolute contributions the highest amongst the four elements we assess.

Canada remains committed to the collective goal of USD 100bn a year in climate finance for developing countries through 2025. However, the USD 100bn goal on its own is insufficient in the period post-2020.

Canada is making progress on reducing support for fossil fuel development abroad, but has not yet phased out support completely, nor does it look likely that it will eliminate support entirely by 2030.

In 2021, for the first time, its export credit agency provided more support for the clean tech sector (CAD 6.3bn) than for the oil and gas sector (CAD 4.4bn) (Export Development Canada, 2022). This switch is the result of a broader trend in recent years of decreasing agency support for carbon-intensive sectors and increasing support for clean tech. However, the agency still provided double the level of support for carbon intensive sectors overall (CAD 13.6bn) compared to clean tech.^[1]

At COP26, Canada agreed to ‘end new direct public support for the international unabated fossil fuel energy sector by the end of 2022’ (UK Government, 2021). This commitment is not a full ban as it does allow for exceptions under certain circumstances (Government of Canada, 2022q). Its export credit agency says it supports this commitment and had already started to reduce support to the sector. Yet, its own targets for the upstream oil and gas sector show that it will still be providing support to the industry in 2030 (Export Development Canada, 2022). Presumably, this support is from already existing commitments, which are not within the scope of the ban (Government of Canada, 2022q). Yet, it does illustrate that Canada has yet to phase out support for the fossil fuel industry abroad entirely (Government of Canada, 2022q).

In 2021, Canada committed, along with the rest of the G7, to ending “new direct government support for unabated international thermal coal power generation by the end of 2021” (G7 United Kingdom, 2021). This was not a new commitment for Canada, as, in December 2018, its export credit agency had stopped providing financing for unabated coal-fired power plants and to companies that derive a significant portion of their revenue from thermal coal related activities (Export Development Canada, 2021). It is not clear whether - or the extent to which - the agency continues to provide support to the sector due to legacy arrangements or in indirect ways. In 2021, the agency reported that it provided a small amount of support for ‘thermal power generation’, but did not specify whether this includes coal-fired power or not (Export Development Canada, 2022).

To improve its rating, Canada needs to stop funding fossil fuel overseas completely and accelerate commitments to increase climate finance.

[1] What the agency considers ‘clean tech’ is not clear and thus may include support for technology that does not mitigate GHG emissions.

In July 2021, Canada submitted its updated NDC, where it strengthened its emission reduction target from a 30% reduction below 2005 levels by 2030 to at least 40-45% (Government of Canada, 2021c). The inclusion of the reference to ‘at least’ suggests that Canada may exceed this target. We calculate that this target equates to an emissions level in 2030 of 419-462 MtCO₂e once the contribution from its land sector has been excluded.

The focus of Canada’s emissions reduction target is on cutting emissions domestically; however, in its NDC submission, Canada leaves the door open to supporting mitigation efforts abroad through the use of internationally transferred mitigation outcomes (ITMOs). Canada is working on its policy towards international carbon credits (Environment and Climate Change Canada, 2022a).

Analysis of earlier NDC developments

• 2021.07.12 – Canada submits its updated NDC
• 2021.04.22 – Canada announces a stronger NDC target

We evaluate the net zero target as: Average.

Canada passed the Canadian Net-Zero Emissions Accountability Act in June 2021 which enshrined its 2050 net zero target into law (Government of Canada, 2021e). 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 or outline the 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). Under all scenarios, Canada is still producing and exporting oil and gas in 2050.

For our full analysis of the net zero target, click here.

Canada's Copenhagen pledge aimed to reduce emissions by 17% below 2005 levels by 2020 (incl. LULUCF). The Copenhagen pledge aligned Canada’s level of ambition to the United States, which also had a target of 17% reduction in emissions from 2005 levels by 2020.

Canada did not achieve its 2020 target, even with the effect that the pandemic had on emissions in 2020. Canada’s target level was 625 MtCO₂e (excluding the land sector contribution). Its emissions in 2020 were 672 MtCO₂e (excl. LULUCF), which are only 9% below 2005 levels (Government of Canada, 2022a).