Canada off course for climate targets, with more riding on fewer policies: expert report

OTTAWA — An independent review of the federal government’s progress report on its climate plan confirms that the country requires policy reform and provincial co-operation to get closer to its climate goals while spurring innovation and building a more affordable, competitive economy. 

The Canadian Climate Institute released its independent assessment of the 2025 Progress Report on the 2030 Emissions Reduction Plan, which the federal government was legally required to publish, outlining progress made on the country’s emissions goals. The Institute finds that the federal report offers a credible picture of Canada’s progress, but does not offer an adequate policy response to the growing gap between the country’s emissions and its climate targets. 

While Canada has policies to reduce emissions, the country is not on track to meet any of its climate goals, including its 2035 target and net zero emissions by 2050, according to modelling the Institute conducted with Navius Research. Instead, national emissions are on course to be roughly half way to the 2030 emissions goal. 

The report also recommends ways to accelerate Canada’s progress. Much depends on how the federal government follows through on commitments from its budget and the Canada-Alberta Memorandum of Understanding (MOU), particularly those concerning co-operative action with the provinces including industrial carbon pricing and oil and gas methane regulations.

Crucially, the Institute’s analysis shows that if the federal government gets the details right on industrial carbon pricing, and the provinces implement strengthened systems, it can roughly double the additional emissions reductions from this policy, compared to a scenario where systems largely continue as they stand today.

While better industrial climate policies will speed up Canada’s progress, they are not enough to reach the country’s goals: more policy effort will be needed. The Institute’s report includes recommendations to inform the development of additional policy options to get closer to Canada’s climate and clean economy goals. In the months ahead, the Canadian Climate Institute will be developing a more detailed assessment of potential policy options governments can implement to make deeper emissions reductions and bolster low-carbon growth. 

QUICK FACTS

  • Canada’s emissions reduction targets are: 40 to 45 per cent below 2005 levels by 2030, 45 to 50 per cent by 2035, and net zero emissions by 2050. 
  • Canada’s 2030 target requires reducing emissions to approximately 440 megatonnes by the end of the decade. National emissions were estimated at 694 megatonnes of carbon dioxide-equivalent (Mt) in 2024, or 8.5 per cent below 2005 levels. 
  • The Institute’s analysis shows Canada’s emissions are projected to be between 18 and 22 per cent below 2005 levels by 2030, depending on the final design of key policies—roughly half way to the 2030 target.  
  • Estimates for 2024 show emissions from oil and gas up 9 per cent since 2005, while emissions from transport (+0.2 per cent) and buildings (-3.5 per cent) have been largely flat. Emissions from electricity (-59 per cent) and heavy industry (-11 per cent) have fallen significantly.

QUOTES

“The further Canada veers away from its climate targets, the steeper the path forward. That puts critical economic opportunities at risk—especially as our non-U.S. trading partners are rapidly decarbonizing their economies and looking for solutions. There is no shortage of policy tools that can accelerate climate progress while strengthening Canada’s economy and making life more affordable—but our assessment clearly shows that governments need to work together to put better policies in place for the country to reach its goals.”  

— Rick Smith, President, Canadian Climate Institute

“The data leave no doubt that Canada’s climate progress is off track. Fortunately, governments have options to put well-designed climate policy in place that can reduce emissions, make life more affordable, and unleash economic growth. Smart, cost-effective climate solutions can help Canada diversify trade, attract new investment, and make the economy stronger and more resilient in the face of an uncertain future.”

— Dave Sawyer, Principal Economist, Canadian Climate Institute

RESOURCES

MEDIA CONTACTS

Claudine Brulé (Eastern Time)
(226) 212-9883
cbrule@climateinstitute.ca 

Krystal Northey (Mountain Time)
(226) 212-9883
knorthey@climateinstitute.ca 

About the Canadian Climate Institute

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

Climate-proofing infrastructure today will save taxpayers billions annually

TORONTO—Climate change is already wreaking havoc on the country’s aging roads, bridges, storm sewers, and water treatment systems—but new research finds that by investing upfront in adapting public infrastructure, governments could limit those impacts and save billions of dollars each year.

A new report by the Canadian Climate Institute, Prepare or Repair: How climate-proofing public infrastructure pays off, finds that taxpayers will pay a steep and growing price if governments delay or fail to adapt public infrastructure to our changing climate. On the other hand, proactive investment in resilience can sharply reduce infrastructure damage and long-term repair bills.

The analysis shows that governments could save between $5 and $10 billion each year to 2100 by preparing public infrastructure for select climate risks. Investing about $3 billion per year in proactive adaptation would prevent most of the infrastructure damage caused by rising heat and heavier rainfall—freeing up public dollars for other priorities.

The true costs of not adapting are likely even higher: the analysis does not account for the impacts of all climate-driven hazards—such as wildfires, certain types of flooding, permafrost thaw, and coastal erosion—or for the broader economic impacts of infrastructure damage, including disruptions to essential services, business, and trade, and damage to private property.

While proactive adaptation minimizes the costs of climate change, it does not eliminate them. Even in a best-case scenario, the analysis finds that total infrastructure costs—of both adaptation investments and unavoidable climate damage—would still increase by $5 billion per year on average until 2100.

Municipalities would bear most of these costs, even though the benefits have a broad reach across the economy. This mismatch between who pays and who benefits underscores the need for stronger financing and revenue tools to support municipal adaptation.

To close this gap and bolster the resiliency of infrastructure in Canada’s changing climate, federal, provincial, and territorial governments should:

  1. Expand funding for infrastructure adaptation and modernize financial tools available to municipalities and other infrastructure owners—including Indigenous governments—to finance resilience upgrades.
  2. Plan, operate, maintain, and renew public infrastructure so it continues to function safely and reliably under future climate conditions.
  3. Strengthen climate hazard data and mapping nationwide to support consistent, risk-informed infrastructure decision-making.
  4. Accelerate updates to infrastructure codes and standards so that new and renewed infrastructure is built to withstand Canada’s changing climate.
  5. Ensure all public infrastructure spending consistently accounts for climate risk and supports infrastructure owners in reducing long-term vulnerability.
  6. Tailor programs to support the most vulnerable communities and critical infrastructure.

The report’s findings are clear: every year of delay increases future costs. Without proactive adaptation investment, the toll of climate change on public infrastructure is expected to rise sharply across the country.

Investing now in resilient roads, bridges, sewers, and water infrastructure will protect families, communities, businesses, and the economy from escalating climate threats.

QUOTES 

“Canadians are caught in a perfect storm of aging infrastructure and rising climate risks that are already disrupting our daily lives. This isn’t a tomorrow problem; it’s happening now. The research leaves no doubt: adapting public infrastructure will save Canadians billions of dollars down the road, limiting the cascading impacts of extreme weather, and building a stronger, safer, more prosperous country.”

— Rick Smith, President, Canadian Climate Institute 

“The evidence is clear: any delay in adapting our roads, bridges, sewers, and water systems to climate-driven extremes will cost Canadians dearly. Our report offers a clear playbook for action. Now it’s up to governments to collaborate and move forward.”

— Ryan Ness, Director, Adaptation, Canadian Climate Institute 

“Severe weather is increasingly impacting Canadians—over the past decade it caused a total of $37 billion in insured damage, up from only $14 billion between 2006 and 2015. Making smart investments in infrastructure ensures our communities can better withstand climate risks. Canada can be a global leader in disaster resilience. Now is the time for concerted action to protect Canadians from the growing risks from a changing climate.”

— Maximilien Roy, Vice President Strategy, Insurance Bureau of Canada

“Local governments are already feeling the strain as climate‑driven floods, heat, and heavy storms wear down the infrastructure Canadians rely on every day. This report reinforces what municipalities have been raising for years: investing early in resilient roads, water systems, and public assets protects families from the effects of climate change, strengthens local economies, and saves taxpayers significant costs in the long run. Through initiatives like the Disaster Mitigation and Adaptation Fund, we have seen how early, targeted investment helps communities put proven solutions in place. With the right tools and strong collaboration across all orders of government, we can help every community build resilience and stay prepared for the climate challenges ahead.”

— Rebecca Bligh, President, Federation of Canadian Municipalities

“The decisions we take today will determine how prepared Canada will be in the face of increasingly severe weather. This research makes it clear that delaying action comes at an enormous cost. Ensuring the infrastructure backbones of our communities—such as roads, public buildings, and water networks—are adapted to our climate should be a top priority for every order of government. Now is the time for concerted action to protect Canadians from the growing risks from a changing climate.”

— Liam McGuinty, Chair, Climate Proof Canada

RESOURCES

CONTACTS

Claudine Brulé (Eastern Time)
Lead, Communications and External Affairs
Canadian Climate Institute
(226) 212-9883

Krystal Northey (Mountain Time)
Lead, Public Affairs
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute 

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

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Funding acknowledgement

This work was supported by funding from Insurance Bureau of Canada, the Federation of Canadian Municipalities, and Climate Proof Canada. The Canadian Climate Institute undertook the project in alignment with its core research priorities and maintained full independence over the research design, methods, results, recommendations, and external communications.

New federal auto strategy positions auto sector and Canadians to benefit from electric future

OTTAWA—Rick Smith, President of the Canadian Climate Institute, made the following statement about the federal government’s new automotive strategy:

“The new auto strategy announced today is a positive step toward a more affordable future powered by clean electricity. By replacing electric vehicle (EV) sales targets with updated tailpipe regulations, investing in new EV charging infrastructure, spurring new investment in auto manufacturing and innovation, and launching new consumer EV purchase incentives, the new federal strategy aims to reduce transportation emissions and strengthen Canada’s auto sector, while making it easier and more affordable for people and businesses to go electric. 

“Whether this policy package ultimately delivers cost-effective climate benefits and leads to more high-quality, affordable electric vehicles in Canadians’ garages will be determined by how—and how quickly—these policies are finalized and implemented. For instance, while the improved vehicle efficiency standards provide manufacturers with greater compliance flexibility, they don’t guarantee more EVs will be available to Canadians. 

“This strategy aims to accelerate investment in Canadian manufacturing of EVs and batteries, with over $3 billion in support and investment incentives throughout the value chain to help Canada’s auto sector diversify, innovate and compete in the rapidly changing trade environment. With EVs making up more than a quarter of vehicles sold globally last year, strategic investments to expand Canadian production of EV components and vehicles will help the auto sector seize a critical growth opportunity in response to U.S. tariffs and trade disruption.

“Targeted consumer purchase incentives are a proven way to spur EV sales: data shows that every $1,000 drop in price increases EV demand by more than 11 per cent nationally. The $2.3 billion EV Affordability Program takes a cost-effective and equitable approach by limiting incentives to models costing under $50,000 unless they’re made in Canada. 

“To complement the new consumer incentives, the government should also continue pursuing agreements, like the recent EV import deal with China, to ensure more affordable options are available at dealerships across Canada. While there are currently more than 20 EV models selling for under C$40,000 in Europe, only one of them is available in Canada. 

“Shifting away from sales targets to stronger tailpipe emissions standards echoes the approach taken in other major markets like the European Union. If this approach delivers emissions results equivalent to a 75 per cent EV sales target by 2035, it would be less than what was expected under the electric vehicle availability standard, but offers a path forward for steady, ongoing incentives for lower-emissions vehicles and more electric-powered vehicles. We look forward to examining the proposed regulation in detail to verify if this is a credible outcome and approach.   

“Electric vehicles are picking up speed in markets around the world because of their superior technology and consumer benefits—but because of confusing and shifting policy signals, Canada is virtually alone in the world in seeing EV adoption flag recently. The federal government should move quickly to implement this new strategy, and ensure the details of how the policy and regulations are designed deliver the results promised.” 

QUICK FACTS

  • More than one in four cars sold globally was electric in 2025, according to global energy think tank Ember. 
  • Electric vehicle sales in Canada grew at a staggering annual rate of 45 per cent between 2017 and 2024, increasing more than thirteenfold. 
  • Following the removal of federal and provincial consumer incentives, EV market share in Canada fell from 15 per cent in 2024 to 9 per cent in the first three quarters of 2025.
  • Passenger transport is the second highest-emitting sub-sector in Canada, making up 13 per cent of Canada’s national emissions or nearly 94,000 tonnes of emissions in 2024. 

RESOURCES

MEDIA CONTACTS

Claudine Brulé (Eastern Time)
(226) 212-9883
cbrule@climateinstitute.ca

Krystal Northey (Mountain Time)
(226) 212-9883
knorthey@climateinstitute.ca

ABOUT US

The Canadian Climate Institute is Canada’s leading climate change policy research organization. We produce rigorous analysis, economic modelling, and in-depth research, and have experts available to comment on topics including: carbon pricing, the costs of climate-related disasters in Canada, and Canada’s progress in reducing emissions, and policy priorities for the incoming federal government. 

Federal proposal to fix industrial carbon pricing not effective without improvement: new research

OTTAWA — The federal government’s latest proposal to strengthen Canada’s industrial carbon pricing systems falls short of what is needed to ensure the policy works to reduce emissions, drive low-carbon investment, and maintain competitiveness, according to new research from the nation’s leading independent climate policy think tank. 

The Canadian Climate Institute’s formal submission to the federal call for feedback on the proposal—titled Outcomes Not Optics: Canadian carbon markets need bold reform to be effective—includes detailed new modelling to assess whether proposed provincial and territorial changes to industrial carbon pricing would deliver the investment signals federal policy is aiming for. 

The government’s proposed changes would update the minimum national standards that provincial and territorial industrial carbon pricing systems must meet, also known as the federal benchmark. Getting the proposed changes right will be critical for the proper functioning of industrial carbon pricing systems: the benchmark sets the conditions used to assess whether provincial and territorial systems are equivalent to the federal system, including which large emitters are covered and whether system rules deliver incentives consistent with the federal standard.  

Industrial carbon pricing is Canada’s most important policy lever to reduce climate pollution and maintain economic competitiveness, all while having virtually no impact on consumers. Central to these systems are carbon credit markets, which help incentivize billions of dollars in low-carbon investment. 

Yet the future of the policy is uncertain: Alberta’s provincial system is the most significant in the country, covering roughly a quarter of national emissions, and is currently tied up in negotiations as part of the recent Canada-Alberta Memorandum of Understanding (MOU), which agreed to increase the minimum effective carbon credit price to $130 per tonne of emissions. 

According to the Climate Institute’s modelling, the federal government’s proposed changes to the benchmark could allow industrial carbon pricing systems to pass federal tests but fail to deliver on the emissions and investment outcomes the federal government is counting on. 

To improve the federal proposal, the Climate Institute provided four recommendations. 

  • The federal benchmark should ensure systems deliver a minimum effective carbon credit price of $130 per tonne by 2030 consistent with the Canada-Alberta MOU. This carbon credit price reflects the incentives firms actually face in practice, rather than the current federal headline price of $170 that applies only in limited circumstances. 
  • Provinces and territories should retain flexibility in how they reach the minimum price, subject to non-negotiable conditions such as tightening performance standards, a carbon price floor and ceiling that increase over time, and limits on compliance pathways that dilute incentives for emission-reducing technologies.
  • To determine whether systems deliver on an effective $130 per tonne carbon price, federal assessments should be based on transparent and credible data on how emitters comply, which compliance paths they have used, and the carbon prices they have paid. 
  • The federal government should require ongoing performance tracking using transparent data on compliance outcomes and costs including credit market activity to assess whether systems continue to conform with minimum national standards.

Industrial carbon pricing is a critically important policy lever, but on its own is not a silver bullet and needs to be complemented with other policies as part of a comprehensive climate and low-carbon competitiveness plan.

QUICK FACTS

  • Industrial carbon pricing only applies to industrial facilities with large emissions that rely on international trade for a substantial part of their profitability.
  • Under federal law, every province and territory can choose to develop their own carbon pricing system, or to have a federal system, known as the backstop.
  • Each of these systems create carbon credit markets for facilities to buy and sell credits for their excess emissions above a defined limit.
  • Industrial carbon pricing systems are very low-cost for businesses, with oil and gas emitters paying roughly 30 cents per barrel of oil in compliance costs—the cost of a Timbit.
  • Research from the Canadian Climate Institute shows industrial carbon pricing systems have an impact of around zero per cent on household consumption in 2025. These costs are projected to remain very low and reduce consumption by just a tenth of one per cent by 2030.

QUOTES

“Industrial carbon pricing can be a magnet for investment in technologies that reduce emissions, and an important policy tool to help businesses remain competitive in a rapidly changing world. But those outcomes require the policy to work as intended. The federal government’s proposal needs substantial improvement—and our research points to clear actions government can take to make that happen.”
— Dale Beugin, Executive Vice President, Canadian Climate Institute

“Canada has a critical opportunity to modernize industrial carbon pricing to ensure that it’s working to its full potential moving forward. This policy can drive huge investments in low-carbon technologies, but only if the government gets the design details rights. Our submission to the government lays out exactly what needs to be done and is backed up by detailed modelling and analysis to ensure this policy is evidence-based.”
— Dave Sawyer, Principal Economist, Canadian Climate Institute

RESOURCES

MEDIA CONTACTS

Claudine Brulé (Eastern Time)
(226) 212-9883
cbrule@climateinstitute.ca

Krystal Northey (Mountain Time)
(226) 212-9883
knorthey@climateinstitute.ca

About the Canadian Climate Institute

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

Developing Canada’s Sustainable Investment Guidelines

BACKGROUNDER

Overview

In December 2025, the federal government announced two years of seed funding to develop Canada’s sustainable investment guidelines, commonly referred to as a sustainable finance taxonomy.

Successfully establishing sustainable finance investment guidelines in Canada will be crucial to securing our country’s energy transition and future prosperity. It will create a common language for capital markets around the types of projects and activities that are aligned with Canada’s climate and economic goals. And it will help mobilize private finance towards new, clean growth projects that can decarbonize existing, emissions-intensive sectors, increasing their global competitiveness.

Who’s Involved

The Canadian Climate Institute will work collaboratively with Business Future Pathways to establish a robust and independent governance structure to oversee the development of science-based taxonomy criteria and undertake stakeholder engagement. Together, the Canadian Climate Institute and Business Future Pathways will enable and support the work of a new independent Taxonomy Council, which will review and ultimately approve investment guidelines.

The Canadian Climate Institute will lead the research and technical work to inform development of the proposed  guideline criteria, and work with Business Future Pathways to convene the decision-making Council and its  financial and technical advisory bodies. The Council and advisory bodies will include representatives from independent experts and academics, the financial sector, climate scientists, Indigenous representatives, and civil society. As efforts get underway, working groups with specific areas of expertise in key industries and sectors will also be established to inform recommendations to the Council. 

The Taxonomy Council is expected to finalize investment guidelines for three priority sectors by the end of 2026 and complete three additional priority sectors by Fall 2027. The Council will collaborate closely with government, industry, and other key stakeholders to determine the initial priority sectors, based on consideration of where taxonomy guidance has the greatest potential to deliver emissions reductions and promote low-carbon competitiveness in the Canadian economy.

Why Made-in-Canada Sustainable Investment Guidelines Matter

Building on the significant work of Canada’s Sustainable Finance Action Council—which will form the basis for Canada’s new sustainable investment guidelines, and was endorsed by Canada’s 25 largest financial institutions—the Canadian  guidelines will establish criteria for “green” investments as well as “transition” investments. It will prioritize guidelines for investment in projects and sectors that are most essential to Canada’s economic growth while ensuring alignment with international investment taxonomies and science-driven climate targets.

Developing these investment guidelines will help Canada catch up in the race for global capital as markets shift. More than 60 sustainable finance taxonomies are currently being used and developed around the world, including almost all of Canada’s major trading partners. Recent research from the University of Hamburg shows that investments into companies aligned with the European Union’s sustainable finance taxonomy generated an “alignment premium” in returns for those companies.

There is significant momentum behind aligning international taxonomies to support the flow of green and transition capital across borders, for example, in the form of green and transition bonds. 

Next Steps

The first order of business will be the selection of the new Taxonomy Council. This process will be led by a temporary Appointment Committee composed of highly-regarded finance, climate, and governance experts. It is anticipated that Council members will be appointed and announced early in the new year.

Over the next two years the Council will work to formalize green and transition investment guidelines for six (yet to be determined) priority Canadian sectors. These guidelines will be science-based, technology-neutral, and include criteria that screen-out investments that could cause significant harm. 

Quotes

“As Canada works to build stronger, more diversified trading partnerships and undertake nation-building projects, globally-aligned, made-in-Canada sustainable investment guidelines will help unlock our country’s economic potential. Canada is one of the best places in the world to put green and transition capital to work. These guidelines will help direct that investment toward the opportunities that will shape our shared future.”

  • Barb Zvan, Chair of the Financial Advisory Committee, Business Future Pathways; Former Chair of the Sustainable Finance Action Council Taxonomy Technical Expert Group

“The new sustainable investment guidelines will give Canada what investors have been asking for: a clear, credible, science-based system for identifying which activities in the economy are aligned with the country’s climate and competitiveness goals. Crucially, Canada’s guidelines will not just focus on defining clean technologies and investments—they will be designed to help transform emissions-intensive sectors that are central to the national economy, and guide credible pathways for them to compete in a low-carbon world.”

  • Jonathan Arnold, Director of Sustainable Finance, Canadian Climate Institute

About the Canadian Climate Institute

The Canadian Climate Institute is Canada’s leading climate change policy research organization. We produce rigorous analysis, economic modelling, and in-depth research on policy solutions to help Canada adapt to the effects of climate change, and compete and prosper in the global energy transition. The Institute led the technical analysis behind the Sustainable Finance Action Council’s Taxonomy Roadmap Report in 2023.

About Business Future Pathways

Business Future Pathways is a pragmatic, science-based, and non-partisan initiative focused on improving clarity and alignment on climate-readiness expectations between investors and companies. The ultimate goal is to increase Canada’s climate competitiveness by equipping Canadian companies with the guidance and guidelines necessary to meet investor and market expectations as the world transitions to net-zero emissions. Separate from its taxonomy-related work Business Future Pathways has also secured philanthropic support to develop investor-endorsed, made-in-Canada guidance to help companies operationalize and report credible climate transition plans. 

Canada’s climate progress well off track and needs immediate policy delivery, government report shows

OTTAWA—Rick Smith, President of the Canadian Climate Institute, made the following statement in response to the release of the 2025 Progress Report on the 2030 Emissions Reduction Plan: 

“Today’s release of the 2025 federal government progress report on its climate plan—called the Emissions Reduction Plan—confirms the country is significantly off track to meeting its emissions targets and the federal government needs to renew policy action over the next six months to course correct. 

“The report shows current policies will not deliver the results necessary to achieve the country’s 2030 or 2035 climate targets, as the Canadian Climate Institute had previously calculated. While it shows emissions are falling under current and additional measures, these actions are only projected to reduce emissions by 28 per cent below 2005 numbers.

“Canada has good policy tools to cut emissions while staying competitive and increasing certainty for businesses. The federal government has committed to strengthening industrial carbon pricing, building out more clean electricity, increasing electric vehicle adoption, and reducing methane emissions, but many important details remain to be settled. In the coming months, the federal government should follow up on the Canada-Alberta MOU with final plans for strengthening industrial carbon pricing, and rigorous equivalency agreements on methane and clean electricity.

“Emissions fall when governments put smart climate policy in place. Today’s report shows the most significant source of risk and uncertainty comes from the oil and gas sector and whether clean electricity and industrial policy can expand fast enough to support investment and electrification. 

“In addition, the government’s lack of support for consumer incentives that support adoption of clean, electric technologies has slowed uptake. Affordability drives adoption—these same technologies lower energy bills and improve comfort. Federal and provincial governments should not be stepping away from affordability measures. They should reintroduce or top-up programs that help Canadians acquire clean technologies like electric vehicles and heat pumps, and maintain the Electric Vehicle Availability Standard.

“The report makes important improvements on transparency and tracking progress, making it easier for Canadians to understand the progress being made across the country. It also introduces a series of indicators that can show a broader picture of climate progress.

“Recognizing that Canada’s 2030 target is out of reach is no reason to give up, it’s a sign it’s time to reboot Canada’s climate approach. In an era of global uncertainty, shifting trade relationships, and an accelerating energy transition, Canada needs an up-to-date, evidence-based climate plan that both aligns with our legislated net zero commitments and contributes to a more secure and affordable future.

“Climate change is already making life across Canada less affordable and hurting companies’ bottom lines, causing more extreme and unpredictable weather that’s disrupting supply chains and driving up costs for materials, insurance, and repairs. That’s why committing to evidence-based climate goals and taking practical, cost-effective steps to achieve them are essential to building a stronger, more competitive Canadian economy.”

Note: The Canadian Climate Institute will release its independent assessment of the 2025 Progress Report on the 2030 Emissions Reduction Plan early in the new year, including independent analysis of emissions-reduction progress to date, priorities for improvement, and policy recommendations to strengthen Canada’s future climate progress.  

RESOURCES

CONTACT

Krystal Northey (Mountain Time)
Lead, Public Affairs
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

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Canada’s new oil and gas methane rules are a cost-effective policy win that’s long overdue

OTTAWA—Ross Linden-Fraser, Research Lead at the Canadian Climate Institute’s 440 Megatonnes project, made the following statement in response to the federal government’s announcement that it is finalizing regulations that will reduce methane emissions in the oil and gas industry 72 per cent by 2030: 

“Reducing methane emissions from the oil and gas sector is a cost-effective solution and Canada’s new regulations are a climate policy win that supports economic competitiveness. 

“Methane is a powerful greenhouse gas and there are many ways companies can make significant reductions in emissions using existing technologies. In fact, Canada’s oil and gas sector has already made substantial progress cutting methane emissions roughly in half over the past decade. In addition, many Canadian companies are already leaders in methane detection and mitigation.

“We look forward to an effective equivalency agreement being concluded between the federal and Alberta government to ensure the level of reduction committed to by the federal government today—72 per cent by 2030—is achieved.  

“The final rules will also reduce methane emissions from landfills, which is an important additional step forward to address this powerful pollutant.” 

RESOURCES

CONTACT

Krystal Northey (Mountain Time)
Lead, Public Affairs
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute 

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

Alberta’s latest changes to industrial carbon pricing make MOU commitments harder to achieve

OTTAWA—Dave Sawyer, Principal Economist at the Canadian Climate Institute, made the following statement in response to the Alberta government’s Order in Council to amend the Technology Innovation and Emissions Reduction (TIER) Regulation

“Just one week after the Alberta-Canada Memorandum of Understanding (MOU), Alberta has introduced regulatory changes that will flood the province’s industrial carbon pricing market with credits and further weaken the carbon price signal for major emitters. This moves the system farther from the improvements both governments committed to.

“By issuing new compliance credits for direct investment and reactivating previously used credits, Alberta is adding more supply to an already oversupplied market. These changes work against the direction set out in last week’s agreement, which included commitments to strengthen Alberta’s industrial carbon pricing system. When Alberta first signalled its intent in September, TIER credit prices crashed to below $20. This change locks in that crash, and puts significant downward pressure on future prices.  

“Establishing credits for direct investment risks compromising the credibility of TIER. It could result in crediting investments without evidence they deliver real emissions reductions, or crediting activities that may not reduce emissions at all, while also increasing the oversupply of credits in the system. The amendment also places no practical limits on how many credits can be issued, which amplifies the oversupply challenge.

“In the MOU, the province and the federal government agreed that TIER would ‘ramp up to a minimum effective credit price of $130/tonne’. Achieving this minimum effective credit price by 2030 would require immediate steps to close loopholes in the credit market and address the oversupply of credits that is driving down the value of credits today and reducing the overall effectiveness of the system. Instead, introducing new investment credits increases oversupply, weakens the price signal, and moves Alberta further away from the path needed to reach $130 per tonne. 

“Billions of dollars of investment in low-carbon projects in Alberta depend on strengthening the province’s carbon credit market. These latest regulatory changes are a big step in the wrong direction.” 

RESOURCES

CONTACT

Krystal Northey (Mountain Time)
Public Affairs Lead
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute 

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

Indigenous housing inequality in Canada will drive up costs and health risks without policy changes: report

Unhealthy, substandard housing and high energy costs are among the most urgent challenges facing Indigenous people in Canada, yet current measures to close the housing gap fall short due to siloed, complex policies that favour short-term solutions over long-term resilience. New research from the Canadian Climate Institute and Indigenous Clean Energy recommends governments adopt a new approach to prioritize the development of Indigenous housing that’s energy efficient, resilient to climate-related threats, and supports overall well-being.

The report finds that closing the housing gap in First Nations, Inuit, and Métis communities requires smart, co-ordinated policy developed in partnership with Indigenous people. It proposes an innovative “Healthy Energy Homes” policy lens that can be applied to both new builds and deep retrofits in Indigenous communities. The Healthy Energy Homes approach offers actionable policy recommendations to address housing gaps, reduce energy bills and improve health and wellness, while uplifting Indigenous self-determination and advancing reconciliation.

Currently, Indigenous people are almost three times more likely to live in housing that needs major repairs compared to non-Indigenous Canadians. The impacts of climate change such as extreme heat, wildfire smoke, erosion and flooding, exacerbating the divide and exposing Indigenous people to further health risks. 

To address these underlying challenges in the context of climate change, the new report recommends federal, provincial and territorial governments act together and swiftly to deploy Healthy Energy Homes by: co-ordinating and integrating government action, co-developing policies and programs led by and for Indigenous leadership, committing to long-term investment agreements and flexible funding options, measuring the co-benefits of improved housing including well-being, and ensuring funding programs are accessible and responsive to the capacity needs of communities.

Together, these solutions point to a clear path forward. With the creation of the $13-billion Build Canada Homes agency, governments have a chance to meaningfully improve Indigenous housing, wellness, and climate resilience. While success also requires long-term, flexible funding, estimates suggest every dollar invested in Indigenous housing can provide a social return on investment of around $6.79, including an estimated $3.12 in government savings.

QUOTES

“A home is more than a shelter; it’s a gathering place that’s central to a family’s physical, emotional, spiritual, and cultural well-being. Many First Nations, Inuit, and Métis communities are already creating innovative building projects that are climate resilient, energy efficient and support people’s well-being. What’s needed is for all levels of government to remove barriers and co-develop housing policy led by and for Indigenous people.”

— Maria Shallard, Director of Indigenous Research, Canadian Climate Institute

“This report shows that improving Indigenous housing policy won’t just lead to better shelter, it will prevent hospital visits, save on energy bills, improve mental health, and support community resilience in the face of climate impacts. Put simply, governments will save money and lives if they adopt these policy changes swiftly.”

— Rick Smith, President, Canadian Climate Institute

“Indigenous Peoples and communities are at the forefront of stepping up to accelerate the energy transition in Canada. Yet housing deserves much more attention. Healthy homes are essential for improving health, tackling climate change, reducing energy costs, and enhancing overall community well-being. We hope this report drives policymakers and financial institutions to recognize the interconnectedness of Indigenous health, energy, and housing; and to encourage collaborative solutions that address the challenges communities face.” 

— James Jenkins, Executive Director, Indigenous Clean Energy

“As the impacts of climate change intensify—and disproportionately impact Indigenous communities—climate resilience and energy-efficiency considerations can no longer be treated as ‘add-ons’ to housing. Closing the housing gap will require governments to support these approaches in new builds and retrofits, while also improving policy co-ordination with Indigenous Peoples.”

— Kayla Fayant, Energy Efficiency Projects Manager, Indigenous Clean Energy

“From Shelter to Strength affirms the Métis Nation’s belief that energy-efficient homes create healthy and safe environments that are essential to the well-being and self-determination of all Indigenous Peoples. By elevating community-led solutions, you are charting a path toward lasting wellness, resilience, and equity. The MNC strongly support the report’s recommendations and congratulates Indigenous Clean Energy, Canadian Climate Institute and the Indigenous Research team, and Shared Value Solutions on this excellent achievement.”

— Métis National Council (MNC)

“A healthy home provides the foundation for health and well-being, yet across Canada people do not have equal access to safe housing. This report is a critical tool for policy makers and an important addition to the body of research that demonstrates the links between housing, health, Indigenous rights and climate.”

— Geri Blinick, RentSafe Project Manager, Canadian Partnership for Children’s Health and Environment

“Across Canada, too many Indigenous children are growing up in homes, schools, and child care settings that undermine their health. This report provides the policy direction governments need to ensure Indigenous children have access to a safe, healthy, and climate-resilient home. It provides an invaluable roadmap to advance health equity and housing justice while honouring commitments to reconciliation and integrating Indigenous knowledge and leadership.”

— Erica Phipps, Executive Director, Canadian Partnership for Children’s Health and Environment

“This report reinforces the principle that housing is healthcare and advocates for holistic, culturally-grounded solutions. It reinforces AHMA’s mission to provide a ‘For Indigenous, by Indigenous’ approach to housing. The report provides evidence that long-term, flexible investments in energy-efficient, climate-resilient homes deliver health, social, and economic co-benefits. By framing housing as a determinant of health and linking it to climate resilience and self-determination, the report strengthens the case for policy reform and funding models that prioritize Indigenous voices, needs, and sovereignty.”

— Sara Fralin, Manager, Engagement and Technical Services, Aboriginal Housing Management Association (AHMA)

Resources

Contacts

Claudine Brulé (Eastern Time)
Lead, Communications and External Affairs
Canadian Climate Institute
(226) 212-9883

Krystal Northey
Lead, Public Affairs
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute 

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute’s Indigenous Research stream develops sound climate policy that is consistent with self-determination by centring Indigenous-led research. The team pursues this work through partnerships with Indigenous-led organizations, such as Indigenous Clean Energy, to amplify Indigenous expertise and knowledge.

About Indigenous Clean Energy

Indigenous Clean Energy (ICE) is an independent, non-profit organization that advances broad, sustainable prosperity by amplifying First Nation, Inuit, and Métis leadership in clean energy projects. Through high-quality, hands-on capacity building, career training, and mentorship, ICE supports Indigenous people in their clean energy journeys while promoting meaningful collaboration with energy companies, utilities, governments, development firms, clean tech innovators, the academic sector, and capital markets.

Federal-Alberta MOU risks unravelling Canada’s climate policy

TORONTO—Rick Smith, President of the Canadian Climate Institute, made the following statement in response to the Memorandum of Understanding (MOU) announced today between Alberta and the Government of Canada:  

“At a time when Canadian climate change policy needed increased certainty, today’s MOU does the opposite. Investor certainty drops when rules become negotiable. Carve-outs for Alberta invite copycat demands from other provinces and territories, and could trigger more policy fragmentation across Canada. 

“With this agreement, the federal government risks doing significant damage to minimum national standards that will have broader impacts on Canada’s climate change efforts. Such standards are essential to maintain economic cohesion and avoid a dysfunctional patchwork of provincial policies with conflicting market signals. Minimum standards also help ensure that provincial efforts add up to shared objectives, such as Canada’s emissions goals.   

“The MOU includes a carve-out for Alberta on the Clean Electricity Regulations and slow walks previous commitments on methane rules. That could trigger a race to the bottom on climate policy where other provinces seek special treatment and side deals over federal laws or regulations they object to. It increases uncertainty for investors looking to electrify their businesses and invest in low-carbon projects, and risks deepening the current fragmentation within the federation. 

“While there are positive elements of this agreement, particularly fixing Alberta’s market for industrial emissions trading, today’s MOU is inconsistent with the federal Climate Competitiveness Strategy released just a few weeks ago. 

“Getting the details right in forthcoming negotiations will be fundamentally important. It is critical that minimum national standards for coal phase-out, clean electricity, enhanced methane limits, and industrial carbon pricing are reinforced or much of Canada’s climate change policy architecture is at risk.

On clean electricity 

“Clean electricity is a major competitive advantage for Alberta and Canada. The Clean Electricity Regulations were already designed to provide the flexibility necessary to account for different provincial realities—reducing emissions while helping to ensure low-carbon electricity remains abundant and affordable as demand grows. 

“Applying the regulations everywhere except in Alberta through a carve-out based on politics rather than evidence is a shortsighted compromise that will increase harmful greenhouse gas emissions. Rather than a formal equivalency agreement, this approach invites other jurisdictions to ask for their own special treatment. It also sets a damaging precedent for other policies where federal minimum standards apply, and risks such policies becoming mired in negotiated exemptions, court challenges, and the erosion of policy coherence and certainty. 

On industrial pricing 

“The commitment to strengthen Alberta’s industrial carbon pricing system and establish a minimum credit price of $130 per tonne is a significant step forward. Doing so would increase and stabilize incentives for reducing emissions and investing in low-carbon projects. It also establishes a precedent for carbon market transparency. Alberta’s industrial pricing system, called TIER (Technology Innovation and Emissions Reduction Regulation), covers roughly 25 per cent of Canada’s total greenhouse gas emissions and modernizing this system is one of the most important and cost-effective steps the province can take to reduce emissions. 

“Yet by framing these elements as part of a negotiated deal with Alberta, the MOU also undermines the credibility of the federal benchmark and backstop as an objective, consistent minimum standard across all provinces. In parallel, the federal government should move quickly to fix the federal benchmark that defines minimum standards for all provincial systems, strengthen the federal backstop, apply it decisively in jurisdictions that do not meet the benchmark, and work with provinces to develop a long-term price trajectory and a nationally consistent price ‘floor’ for industrial emissions credits.

“These changes are essential to bring greater credibility and certainty to carbon markets both now and beyond 2030, so that businesses can make big investments in low-carbon projects. Modernizing industrial pricing systems in these ways would ensure the biggest polluters pay to reduce emissions, while keeping costs low for businesses and having virtually no impact on the cost of living.

On methane emissions

“Delaying the deadline for stronger limits on methane pollution is unnecessary. If there is one no-brainer of climate change policy, it is enhanced reduction of methane emissions from oil and gas. Toughening methane limits represents one of the lowest-cost options available to fight climate change. Stronger methane regulations can build on Alberta’s already impressive record of success, while creating new opportunities for Canadian companies that have been leaders in commercializing technologies to manage methane. Slowing down this important and cost-effective measure risks putting LNG exports and broader trade diversification efforts in jeopardy, as Japan contemplates methane-performance standards and the EU implements them.” 

RESOURCES

CONTACT

Julia Kilpatrick (Mountain Time)
Vice-President, External Affairs
Canadian Climate Institute
(226) 212-9883

About the Canadian Climate Institute 

The Canadian Climate Institute is Canada’s leading climate change policy research organization. The Institute produces rigorous analysis, economic modelling, and in-depth research focused on incentivizing clean economic growth and low-carbon competitiveness, reducing emissions and accelerating Canada’s net zero energy transition, and making our economy and infrastructure more resilient to a warming climate.

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