Canada

We evaluate the net zero target as: Average.

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, 20235, 2040, 2045), at least a decade in advance of each target, and the requirement to develop emissions reduction plans for these targets. The first Emissions Reduction Plan was published in March 2022. Canada plans to publish progress reports in 2023, 2025 and 2027.

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 does it outline the policies and measures needed to achieve the target. Reliance on LULUCF and other 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.

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 nor committing to achieve the entirety of the target through emissions reductions in Canada.

Scope

• Target year – Canada aims to reach net zero by 2050, however, nothing in its Net-Zero Act precludes achieving net zero emissions before 2050.
• Emissions coverage – The target covers all GHG emissions and all sectors of the economy (excluding international bunkers).
• International aviation and shipping – The target does not cover international aviation and shipping. However, under the Net-Zero Act, it is possible to amend the methodology used (currently set as that used for the national GHG inventory), so it may be possible to expand that coverage in future regulations if the government so decides. International aviation and shipping was not addressed in Canada’s October 2022 update to its long-term strategy.
• Reductions or removals outside of own borders – The scenarios explored in Canada’s updated LTS focus on achieving net zero emissions through domestic action; however, Canada notes that it may use reductions or removals outside of its borders (achieved through the purchase of Internationally Transferred Mitigation Outcomes (ITMOs)) to meet its net zero target. We have downgraded our rating of Canada’s target on this point based on the information provided in the updated LTS.

Target architecture

• Legal status – Canada passed its net zero target into law in June 2021 (Government of Canada, 2021e). It submitted an updated LTS to the UNFCCC in October 2022.
• Separate reduction & removal targets – Canada does not have separate emissions reduction and removal targets. It does provide information on its LULUCF assumptions and possible reliance on DAC and BECSS in its 2022 LTS update. The LULUCF contribution is a defined ex ante and constant across all modelling approaches, whereas the extent of CO₂ removal technology usage is defined by the models.
• Review process – Canada must prepare at least one progress report for each five-year intermediary target as well as an assessment report after that particular target year has passed to evaluate whether the target was achieved. There is no binding obligation to achieve the target, only to explain why the target was not reached and to provide a description of the actions being taken in the case of failure.
  In its first Emission Reduction Plan, released in March 2022, the government indicated that it plans to publish progress reports in 2023, 2025 and 2027 (Environment and Climate Change Canada, 2022a).

Transparency

• Carbon dioxide removal – Canada’s long-term strategy clearly delineates the reliance on LULUCF and other CO₂ removal technology across the scenarios it considers. The LULUCF contribution is set ex ante and consistent across all models, whereas the level of CO₂ removal technology usage varies across the scenarios. The LULUCF contribution is set at 100 MtCO₂e or 15% of Canada’s 2020 emissions, while CDR usage is as high as 30% of the country’s 2020 emissions in some scenarios.
• Comprehensive planning – 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.
  Under the Net-Zero Act, the government is required to set an interim reduction target for 2026. The government established this target as 20% below 2005 levels, but does not consider this to be an official target (like its NDC), just a metric against it will measure progress against.
  In February 2021, the government established an advisory body to assist it in developing net zero pathways (Government of Canada, 2021g). The 2021 Budget included five years of funding for Environment and Climate Change Canada to develop and apply a ‘climate lens’ to federal decision-making process (Government of Canada, 2021b).
• Clarity on fairness of target – The updated LTS does not provided an explanation for why Canada’s net zero target is a fair contribution to meeting the Paris Agreement’s 1.5°C limit. Under the Net Zero Act, the government must consider Canada’s international commitments under the Convention and Paris Agreement.

The Climate Action Tracker has defined the following good practice for all ten key elements of net zero targets. Countries can refer to this good practice to design or enhance their net zero targets.