Canada is making progress toward climate goals, greenhouse gas emissions data confirm

14 April 2023, OTTAWA—The federal government’s latest National Inventory Report (NIR) confirms Canada is making important progress in reducing greenhouse gas emissions. The 2021 official emissions data also shows improvements separating emissions from economic growth, a critical marker on the road to meeting the country’s 2030 climate targets and building a cleaner economy.

According to the 2021 inventory data, Canada’s emissions declined 8.4 per cent below 2005 levels—reaching 670 million tonnes of carbon dioxide-equivalent (Mt CO2e) that year. Canada has committed to reduce emissions by 40 to 45 per cent below 2005 levels by 2030.

While Canada’s 2021 emissions rose 1.8 per cent above 2020 levels, that increase was substantially smaller than the rebound in economic growth that year (+4.6%), in the wake of the COVID-19 pandemic. This trend shows Canada continues to ‘decouple’ emissions from economic activity—even though many of the federal policies that will drive substantial emissions reductions in the future are only just coming into effect.

Economic sectors that saw the greatest progress in 2021 included buildings (2.2 per cent reduction from 2020), electricity (3.7 per cent reduction from 2020) and agriculture (1.4 per cent reduction from 2020). In contrast, emissions from transportation were up 4.9 per cent or 7 Mt CO2e while heavy industry emissions increased 4.1 per cent or 3 Mt CO2e. Oil and gas jumped 3.3 per cent from the previous year, to 189 Mt CO2e. This is 12.5 per cent higher than 2005 levels, representing a significant ongoing challenge for industry and policy makers.

While promising, the emissions trends for 2021 need to accelerate for Canada to achieve its 2030 target. Previous Climate Institute analysis concluded that quick and effective implementation of the federal government’s Emissions Reduction Plan, alongside greater provincial and territorial action, will be instrumental to driving progress at the scale and pace required this decade.

The government’s official 2021 inventory is consistent with the overall trends estimated by the Institute earlier this year, showing even better progress than anticipated even after accounting for methodological changes implemented by the government. The federal government recalibrates the methodologies on which the NIR is based every year to align with improvements in international emissions accounting standards, new information, and evolving science. All emissions years in the inventory (1990-2021) are adjusted when methodologies are updated.

The NIR is published each spring following a 16-month lag, which makes it difficult to quickly track progress and course correct if data shows Canada is not on the path to reaching its targets. To provide more timely information for decision-makers, the Canadian Climate Institute will release an independent early estimate of national emissions every fall–eight months ahead of the official inventory report. Our estimate of 2022 national emissions will be released in September 2023.

QUOTES

“These latest emissions numbers are significant and welcome news: they show that Canada is starting to put the brakes on emissions, while the economy grows. Cutting emissions by over 8.4 percent since 2005  is a big deal, and our independent estimates confirm this promising trend. As long as Canada picks up the pace with stronger policy, there’s still time to reach Canada’s 2030 emissions reduction goal, while building a cleaner, more competitive economy and keeping life affordable.”

Rick Smith, President, Canadian Climate Institute

“While Canada’s economy saw a strong rebound in 2021, greenhouse gas emissions grew slower than expected, thanks to policies to improve energy efficiency and decarbonize the economy, as well as market drivers. Although some sectors are making clear progress, oil and gas emissions are trending in the wrong direction. Achieving Canada’s 2030 climate target will require faster action and stronger policy from governments across the country—but the progress we see today is a step forward.”

Dave Sawyer, Principal Economist, Canadian Climate Institute

CONTACT

Catharine Tunnacliffe
Director of Communications
ctunnacliffe@climateinstitute.ca
(226) 212-9883

RESOURCES

2021 Early estimate of National Emissions (February 2023)
Insight: Early estimate of National Emissions shows promising trends for 2021
Independent assessment: 2030 Emissions Reduction Plan (April 2022)

Budget 2023 is a strong gameplan to keep Canada competitive

OTTAWA, 28 March 2023 — Rick Smith, President of the Canadian Climate Institute, made the following statement in response to the release of the Federal Budget 2023: 

“This is the most consequential budget in recent history for accelerating clean growth in Canada. Climate action and economic policy are one and the same—the world’s major economies know that investing in clean energy is the catalyst for future competitiveness, and Budget 2023 takes decisive steps to ensure Canada won’t fall behind in the global race to net zero. 

“This is a shrewd response to the U.S. Inflation Reduction Act. The 2023 federal budget builds on Canada’s existing policy strengths. It provides targeted support to attract the private capital required to drive new sources of clean economic growth, explicitly building on the solid foundation of existing policies such as carbon pricing and clean fuel regulations. In particular, new funding through Investment Tax Credits (estimated to cost $17 billion over the next five years) as well as new focus for the Canada Growth Fund and the Canada Infrastructure Bank, will help mobilize additional investment in clean growth projects across the country, such as clean electricity, hydrogen, clean technology manufacturing, electric vehicles, and batteries. 

“We strongly support the federal government’s commitment to provide carbon contracts for difference to drive more private investment at lower cost. It makes sense to provide both tailored contracts for differences through the Canada Growth Fund as well broader contracts to buttress the certainty of carbon pricing. As we have recommended, contracts for difference leverage Canada’s biggest advantage—carbon pricing—to crowd-in private investment and secure the longer-term economic viability of clean growth projects. 

“Clean electricity is Canada’s greatest competitive advantage in attracting investment—and we need more of it.  This budget takes significant strides toward building bigger, cleaner and smarter electricity systems across the country, with new investment tax credits for the electricity sector worth $6.3 billion over the next five years and $25.7 billion over the next ten. By making these tax credits conditional on provincial commitments to affordable net zero electricity, the budget will also create incentives for essential provincial and territorial action on clean electricity. These shifts will underpin Canada’s net zero transition and make energy more affordable and reliable for Canadians in the long run.  

“Overall, Budget 2023 invests in the right priorities to tackle climate change and build a stronger, cleaner, and more competitive economy.” 

Budget 2023 highlights

The 2023 Federal Budget’s most significant elements for supporting clean growth and progress on climate change: 

  • The importance of clean electricity, a linchpin both of Canada’s net zero pathways and of its future competitiveness, comes through very strongly. The Budget rightly prioritizes clean electricity, with both new (investment tax credits, including credits available to crown corporations and public utilities) and existing resources (Canada Growth Fund, Canada Infrastructure Bank). 
  • The Budget clarifies the role of the Canada Infrastructure Bank to make it “the government’s primary financing tool for supporting clean electricity generation, transmission, and storage projects, including for major projects such as the Atlantic Loop.” Drawing on existing resources, it commits at least $10 billion of support for clean power and an additional $10 billion for clean growth infrastructure.
  • The Budget explicitly opens the door to multiple types of contracts for difference. By directing the Canada Growth Fund to provide tailored contracts for differences for large projects—whether tied to prices of carbon or commodities such as hydrogen—it can get some projects moving quickly in the short-term. And by consulting on broader carbon contracts for difference it can reinforce certainty around future carbon prices, making the carbon pricing work better.  
  • By tasking the Public Sector Pension Investment Board (PSP Investments) to manage the Canada Growth Fund’s assets, the budget ensures that the Growth Fund can move quickly in mobilizing private capital. Critically, the budget notes the importance of transparency and accountability in ensuring these investments are consistent with the Growth Fund’s mandate.  
  • The budget announces that the Canada Infrastructure Bank will provide loans to Indigenous communities to support them in purchasing equity stakes of projects in which the Infrastructure Bank is investing. This is consistent with recommendations the Institute has made to enable Indigenous equity in clean growth projects as a critical element of economic reconciliation.
  • Investment Tax Credits will mobilize significant private capital in key areas that could provide new sources of economic growth and competitiveness. For example, 30 per cent refundable credit will support investment in new machinery or equipment used to manufacture or process clean technologies and extract, process, or recycle key critical minerals. Similarly, tax credits of 15-40 per cent will support production of clean hydrogen and conversion to ammonia for transport. 
  • The Budget provides some support for building resilience to disasters and climate impacts. It dedicates:
  1. $15 million to Public Safety Canada to create a public portal providing Canadians information about their vulnerability to flood; 
  2. $48 million to Public Safety to identify high risk flood areas and implement a modernized Disaster Financial Assistance Arrangements Program
  3. $31.7 million to stand up a flood insurance program for Canadians without access to insurance. 

CONTACT 

Catharine Tunnacliffe
Communications Director
Canadian Climate Institute
(226) 212-9883
ctunnacliffe@climateinstitute.ca

RESOURCES

Clean growth and climate policy experts available to comment on the 2023 Federal Budget

OTTAWA, March 24, 2023 — Experts from the Canadian Climate Institute are available to speak with media before and after the release of the 2023 Federal Budget.  

WHAT

The Institute will participate in the stakeholder budget lock-up to evaluate commitments related to clean growth and climate priorities, including: 

  • Incentives and policy tools to drive clean growth and competitiveness
  • Tax credits and other supports for the expansion of clean electricity
  • Affordability and the energy transition
  • Canada’s progress toward net zero emissions
  • The costs of climate change for Canada

Please see our media backgrounder for additional analysis and resources relevant to the 2023 Budget.

WHEN

Tuesday, March 28, 4:00 pm ET

Note: Climate Institute experts are also available for pre-budget interviews or to share research and analysis on background. 

WHO

Rick Smith, President, Canadian Climate Institute
Areas of expertise: Canada’s progress toward net zero emissions, affordability and the energy transition, clean growth and competitiveness, and general climate policy priorities. 

Dale Beugin, Executive Vice President, Canadian Climate Institute

Areas of expertise: clean growth, carbon pricing, contracts for difference, clean electricity, Canada’s progress towards net zero, and affordability and the energy transition. 

Marisa Beck, Clean Growth Director, Canadian Climate Institute
Areas of expertise: clean growth, Canada’s response to the U.S. Inflation Reduction Act, and competitiveness in the global energy transition.

Jason Dion, Senior Research Director, Canadian Climate Institute
Areas of expertise: the switch from fossil fuels to clean power, inter-governmental cooperation to expand and upgrade electricity systems, and net zero pathways for Canada.  

Julien Bourque, Quebec Coordinator
Areas of expertise: Canada’s progress toward net zero emissions, affordability and the energy transition, clean growth and competitiveness, and general climate policy priorities.

Ryan Ness, Adaptation Research Director
Areas of expertise: the costs of climate change in Canada, ,the National Adaptation Strategy and Action Plan, federal funding to prepare for climate change, and climate-related disaster response.

RESOURCES

CONTACT

Catharine Tunnacliffe
Communications Director
Canadian Climate Institute
(226) 212-9883
ctunnacliffe@climateinstitute.ca

A “made-in-Canada” approach can unlock the billions of dollars required for the clean energy transition

21 March 2023, OTTAWA — In the lead up to next week’s federal budget, a new report from the Canadian Climate Institute makes seven recommendations on how Canada can mobilize private investment to compete in the global energy transition. Up against generous support for clean energy in the U.S. Inflation Reduction Act, the federal government faces growing pressure to accelerate the flow of private investment to fund Canada’s energy transition. 

The Institute’s research, released today, shows how Canada can compete and succeed without precisely matching U.S. subsidies and incentives in the Inflation Reduction Act, by leveraging existing policy strengths and using limited public funds to mobilize private investment.

The March 28 federal budget is widely anticipated to respond to the new direction set last August by Canada’s biggest trading partner, through measures including the Canada Growth Fund. The 2022 federal budget identified an annual financing gap for climate investment of about $115 billion. This year’s budget represents an opportunity to create supports to direct capital toward the necessary investment needed to close the gap.

Rather than trying to copy the Inflation Reduction Act, the Institute’s research recommends a targeted “made-in-Canada” response, including:

  • Orienting public support around fixing market and policy failures, to avoid over-subsidizing projects that would have been economically viable without, or with less, government support. 
  • Using financial support instruments that optimally share risks and returns between the Canadian public and private investors.
  • Building “exit strategies” for public support.
  • Ensuring the Canada Growth Fund’s governance models combine a clear mandate with political independence and strong accountability.
  • Requiring that the Fund’s investment portfolio has a minimum share of projects with Indigenous majority ownership.

The Institute’s recommendations are supported by new research papers, including: 

QUOTATIONS

“The U.S. Inflation Reduction Act created a ‘sink-or-swim’ moment for Canada, and smart and targeted policy will help us keep swimming in the new global market reality, and keep up with our biggest trading partner. Canada has many strengths, but targeted policy is now needed to develop our future competitive advantage.”

—Marisa Beck, Director of Clean Growth Research, Canadian Climate Institute

“The Inflation Reduction Act set the U.S. economy on a new trajectory, and Canada now has to find its own way forward as the global energy transition accelerates. While it’s tempting to copy the American template, a tailored approach is better: one that builds on our existing strengths, like the carbon price, and draws on a range of policy tools to bring certainty to investors.” 

—Rick Smith, President, Canadian Climate Institute 

“Investors will move quickly to where there is market certainty and to where expected returns are highest. The Inflation Reduction Act provides certainty for the U.S. market to be competitive in new global markets. We know firms need policy certainty to attract and keep capital investment and business needs an environment that offers certainty and clear policy direction. Canada needs to respond quickly with an approach that builds on our market strengths, ties together the strands of existing measures in transparent and cohesive ways, and adds additional policy supports.”  

—Don Drummond, Economist, Queen’s University; fellow-in-residence, C.D. Howe Institute; expert panelist, Canadian Climate Institute

“The United States and other countries are already moving quickly and aggressively to capture climate investment and provide support for their industries. Canada needs an industrial strategy that supports investment, including providing certainty on carbon pricing, to attract capital while supporting the decarbonization of vital industries. “

—Catherine Cobden, President and CEO of the Canadian Steel Producers Association

CONTACT

Catharine Tunnacliffe

Director of Communications, Canadian Climate Institute

ctunnacliffe@climateinstitute.ca

(226) 212-9883

Canada’s new climate investment taxonomy framework critical to securing competitiveness, achieving targets, experts say

  • Today, the Sustainable Finance Action Council (SFAC) released its Taxonomy Roadmap Report featuring a Canadian Green and Transition Financial Taxonomy Framework, backed by Canada’s 25 largest financial institutions.
  • The Institute for Sustainable Finance and the Canadian Climate Institute contributed to the Report as independent Core Knowledge Partners. SFAC and Knowledge Partner experts are available for comment.

March 3, 2023, TORONTO—Today, the Sustainable Finance Action Council (SFAC) released its Taxonomy Roadmap Report featuring a made-in-Canada framework to establish standardized and science-based definitions of climate-compatible investments.

Backed by the 25 largest financial institutions in the country, which participated in the process as members of the Taxonomy Technical Expert Group (TTEG), the Canadian Green and Transition Financial Taxonomy Framework laid out in the Roadmap Report is key to aligning capital flows with Canada’s climate targets and economic opportunities.

The framework, developed in partnership with the Canadian Climate Institute, serves as a guide for the development of a new climate investment taxonomy (a system for categorizing financial investments or assets) which includes definitions for both “green” and “transition” investments in order to create necessary clarity for capital markets, which are actively seeking sustainable investment opportunities.

Clearly defining those opportunities in Canada is critical to attracting the global capital needed to fund our net zero transition, which is projected to require over $115 billion/year in new investment. That includes significantly reducing emissions from our most energy-intensive industries, which will increase their global competitiveness.

Canada’s framework leverages and aligns with global best practices for “green” taxonomies, while pioneering criteria for a “transition” taxonomy — the “missing middle” in climate finance. 

The “green” label would apply to low-to-no carbon projects or activities that accelerate Canada’s clean energy transition—e.g., renewables, battery and storage technology, and Electric Vehicle (EV) infrastructure. 

The “transition” label would apply to projects that substantially reduce emissions from hard-to-decarbonize sectors. Transition-labelled projects would also have limited lifespans and avoid making it either harder or more expensive to transition to net zero in the future. For example, a steel producer installing an electric arc furnace to reduce emissions from its operations would be a project eligible for transition investment status.

The framework is grounded in the science-based target of limiting global warming to 1.5° C — and all criteria and thresholds, for green as well as transition labels, would be aligned with that pathway.

The next steps in this process are to develop a draft Climate Investment Taxonomy based on this initial framework, and to establish an independent governance structure to formally create and maintain the Canadian taxonomy. The proposed governance structure would include regulators, financial institutions, provincial governments, and Indigenous rights holders. 

Core Knowledge Partners

The Canadian Climate Institute, an independent, non-partisan, climate-research organization, led the analysis informing the taxonomy framework architecture developed in the Taxonomy Roadmap Report.

The Institute for Sustainable Finance, based at Smith School of Business, Queen’s University, provided an in-depth review of domestic and international reports on transition finance and taxonomies, a comparative survey of taxonomy and standard-setting governance models and an overview of domestic and international sustainable finance trends and developments to inform the Taxonomy Roadmap Report.

ISF Reference Materials which include a briefing document, background research, a video interview and other informative supporting materials can be found here.

Quotes

“Our financial systems can and must play a critical role in financing Canada’s transition to a climate-resilient, net-zero future. Tackling issues like climate change will require significant effort and investment. Clarity and a common language around green and transition investments is fundamental to scaling up the flow of capital to Canadian climate projects—from growing our clean energy industries to helping decarbonize our heavy-emitting sectors. A made-in-Canada taxonomy will help seize investment opportunities that will benefit our whole economy across the country.”

Barb Zvan, Lead, SFAC Taxonomy Technical Expert Group

“The Climate Investment Taxonomy Framework is a necessary step towards securing Canada’s competitiveness in a global market that increasingly values sustainable finance opportunities. We need the clarity this framework provides to attract global capital to made-in-Canada net zero solutions.”  

Jim Leech, Chair, Advisory Council, Institute for Sustainable Finance, Chancellor Emeritus, Queen’s University, Former CEO Ontario Teachers’ Pension Plan

“The publication of the Transition Taxonomy roadmap for Canada is an important step forward. Canada has a carbon exposed economy at a time when global efforts to decarbonize are accelerating, resulting in important consequences for us as a nation. The successful Transition of our economy to net zero over time is hence one of our biggest national challenges, and one which will require tremendous investment. Today, with other countries setting rules and frameworks that will affect Canadian outcomes, it is ever more important that this Canadian Transition framework be established as an accepted benchmark to guide capital flows in a productive and consistent manner.”

Andrew Chisholm, Member, Expert Panel on Sustainable Finance

“The financial system needs a standardized and science-based way to determine whether specific projects in Canada align with global climate goals. By defining not only “green” investments but also “transition” activities, this ground-breaking framework could help accelerate capital flows to Canada’s emissions-intensive industries that can successfully be transitioned or transformed to align with a net zero future. This is something few other taxonomies in the world have done—and is instrumental in building and maintaining the confidence of global capital markets.”

Jonathan Arnold, Clean Growth Research Lead, Canadian Climate Institute

“This Framework is an important milestone for Canada’s financial and responsible investing sector and an essential step towards the development of a standardized taxonomy for Canadian businesses and investors. But this Roadmap is also exciting because it has global implications to address the transition economy. As a resource-based economy in Canada, we understand that the country needs not just a green taxonomy but also a transition taxonomy that enables investments in greenhouse gas reductions in currently high-emission industries. This is an area where Canadians have the opportunity to be global leaders. SFAC’s framework has the potential to set a new global standard for sustainable finance taxonomies by helping inform transition criteria not just in Canada but also in other markets.” 

Caelan Welch, Research Associate, Institute for Sustainable Finance

“We look forward to the Sustainable Finance Action Council’s work on behalf of the Ministers of Finance and Environment and Climate Change Canada; particularly the taxonomy framework which we intend to leverage in our continuing work to ensure our capital rules fully capture the opportunities as well as the risks of climate change.” 

Peter Routledge, OSFI Superintendent (remarks from the RBC capital markets bank CEO conference, Toronto, Ontario, January 9, 2023)

“Climate change and the transition to low-carbon growth will have profound impacts on virtually every sector of Canada’s economy. Ensuring that our financial system works efficiently is an important part of the Bank of Canada’s responsibilities. A well-functioning—and efficient—financial system has the important job of channeling capital to the most productive investments. A credible climate investment taxonomy defining both green and transition investments, as proposed by SFAC’s newly released framework, is critical to that goal. This is not only about managing the systemic risks that climate change presents to our economy but also helping position Canada to seize the climate-smart opportunities that consumers, workers and investors are looking for. I applaud this important milestone for sustainable finance in Canada, and globally.”

Tiff Macklem, Governor, Bank of Canada (reiterating remarks made at the 2020 Public Policy Forum)

“The Taxonomy Framework, with its commitment to science-based integrity, transparency, and accountability, is a critically important step in Canada’s transition towards a net-zero emissions economy. Green and transition financing are essential to shifting our high carbon-emitting economy towards climate resilience and circular economic activity, and clear standards will aid in attracting the investment needed. The goal is creation of rigorous objective criteria, anchored in climate science and aligned with taxonomies globally. To be eligible, financing will require transition plans for achieving net-zero emissions, effective climate disclosure, and assessment of products against a ‘do no significant harm’ standard.”

Dr. Janis Sarra, Professor of Law, Peter A. Allard School of Law and Principal Co-Investigator, Canada Climate Law Initiative

“The launch of Canada’s Climate Investment Taxonomy Framework is a milestone. It delivers a vital contribution to international efforts to mobilize investment flows to climate action. With a focus on both green and transition investments, Canada’s framework will help to scale the finance we need to change emissions intensive industries. It’s an example for other nations.” 

Sean Kidney, CEO, Climate Bonds Initiative

“We welcome the publication by Canada of their roadmap for the development of a green and transition taxonomy. As Australia embarks on a similar journey, developing an Australian taxonomy to support our economic transition, we look forward to continuing collaboration with Canada, sharing lessons and insights along the way.” 

Kristy Graham, Executive Office, Australian Sustainable Finance Institute (ASFI) 

“Inclusive and realistic decarbonisation approaches are critical for immediate and effective action. Transitions are key to this. Facilitating an orderly and credible transition will allow for better decarbonisation approaches as this will encourage and enable all the relevant actors to start the journey and stay on the path. The approach of the Canadian Taxonomy has taken into consideration Canada’s distinctive circumstances and creates an excellent frame for transitions, while being congruent with the global decarbonisation ambition. It also opens the door for international operability. We look forward to exchanging more views and ideas with Canada and working together to engender concerted global action.”

Eugene Wong, CEO, Sustainable Finance Institute Asia

“The development of the Transition Taxonomy framework is foundational for increasing sustainable finance in Canada and for accelerating progress towards net-zero emissions. The clarity and consistency of an evidence-based process, informed by our Canadian reality, offer a path from which standards and policies can be based and with which investment decisions can be made. The Sustainable Finance Action Council has provided the direction and we must all move forward swiftly.”

Roger Beauchemin, President and CEO, Addenda Capital

“Canada’s most emissions-intensive industries need significant investments to decarbonize and to remain competitive as Canada and the world work to reach net zero emissions. At the same time, it’s critical to rapidly scale up activities that will help build a net zero future, such as renewables, batteries and storage, and clean hydrogen. The Climate Investment Taxonomy Framework will help to standardize and track these investments through time, and provides the credibility necessary to attract more global capital to Canada.”

Chris Severson-Baker, Executive Director, Pembina Institute

Media contacts

Canadian Climate Institute

Catharine Tunnacliffe

Communications Director

Ctunnacliffe@climateinstitute.ca
416-527-1777                                      

Institute for Sustainable Finance                                              

David Watson  

Associate Director, Communications

David.watson@queensu.ca

613-796-3605

Early Estimate of National Emissions shows Canada steadily separating economic growth from emissions

23 February 2023, OTTAWA—Canada is steadily making progress separating economic growth from greenhouse gas emissions, according to the 2021 data in the independent Early Estimate of National Emissions (EENE), released today at 440 Megatonnes, a project of the Canadian Climate Institute.

That trend—known as “decoupling” economic growth from emissions—is particularly promising given the rebound in economic growth occurring in the wake of the COVID-19 pandemic, and is a critical indicator of climate progress.

While the rise in economic activity from 2020 to 2021 increased emissions by 32 megatonnes (Mt), improvements in energy decarbonization and energy efficiency contributed to a net overall increase of only 19 Mt. That means that policy and market drivers cut emissions by 13 Mt—leaving the emissions associated with a unit of GDP 2 per cent lower in 2021 than in 2020, and 27.5 per cent below 2005 levels.

The EENE estimates Canada’s 2021 emissions by sector, based on economic activity data and historical trends in energy efficiency, emission intensity, and energy decarbonization. It found Canada released 691 megatonnes of carbon dioxide equivalent in 2021—a 2.8 per cent increase in absolute emissions from 2020, but a 6.7 per cent decrease below 2005 levels. Achieving Canada’s 2030 climate target requires reducing annual emissions to no more than 440 megatonnes in 2030.

While promising, the trends observed for 2021 need to accelerate significantly for Canada to achieve the 2030 target. Previous Institute analysis concluded that quick and effective implementation of the federal government’s 2030 Emissions Reduction Plan, along with provincial and territorial action, will be instrumental to driving the scale of progress required this decade.

Official emissions data is reported each spring in Canada’s National Inventory Report—but with a lag of more than a year between the period being reported on and the release date. If the data shows Canada’s efforts to reduce emissions are off-track, the lag in reporting makes it difficult to take timely action to correct course. By releasing this early estimate of 2021 emissions, the Institute aims to inform more timely and evidence-based decision making. The Institute’s 2022 EENE is anticipated to be publicly available early this fall, significantly closing the reporting gap.

QUOTES

“It’s promising to see Canada starting to make tangible progress in reducing carbon pollution, especially coming out of the pandemic. Time is short, and our goals are ambitious. Hitting those goals is crucial to Canada’s future security and prosperity. The Early Estimate of National Emissions shows promising trends, but long-term success now rests on how quickly the government’s chosen policies are actually implemented.”

– Rick Smith, President, Canadian Climate Institute

“When it comes to cutting carbon pollution, going slowly is not an option. By providing more timely data on Canada’s climate progress, we hope to support and spur on the action necessary to achieve Canada’s emissions targets and build a cleaner, more competitive and more prosperous economy.”

– Dave Sawyer, Principal Economist, Canadian Climate Institute

CONTACT

Catharine Tunnacliffe

Director of Communications

ctunnacliffe@climateinstitute.ca

(226) 212-9883

Media statement: proposed regulated sales targets for zero emission vehicles

“The regulated sales targets for zero emission vehicles announced today will reduce emissions by helping more drivers get behind the wheel of an electric car.

“Right now, more than half of Canadians want their next car to be an electric vehicle but they face long wait times, with scarce supply going to provinces like British Columbia and Quebec, where sales mandates are already in place. The federal regulations will help shorten wait times for electric vehicles and plug-in hybrids by increasing supply in all provinces and territories. 

“The transportation sector is the second-largest source of carbon emissions in Canada, and more than half of those emissions come from cars and light-duty trucks. In 2021, the Canadian Climate Institute analyzed over 60 potential net zero scenarios in Canada—in every scenario, switching to zero-emission vehicles is a central part of the transition.

“While increased public transit and active transportation are also safe bets to reduce emissions in the sector, accelerating the shift to ZEVs, which the regulations will do, is crucial to driving down the transportation sector’s emissions and helping Canada meet its climate goals.”

– Anna Kanduth, Senior Research Associate, Canadian Climate Institute

Our work on this topic

Why is it so hard to get an electric vehicle in Canada?

ZEV mandates are good climate policy — because they work

Canada’s Net Zero Future: Finding our way in the global transition

IESO’s Pathways to Decarbonization report

“The IESO’s Pathways to Decarbonization report confirms that a non-emitting electricity grid is doable in Ontario. By focusing on energy efficiency and demand-side management, transmission and storage, nuclear energy, as well as solar and wind power, Ontario can meet growing demand for clean electricity and get off gas-fired generation.”

“Investors and businesses are keen on a moratorium on new gas-fired electricity in Ontario, because clean electricity supply is increasingly being prioritized by manufacturers. It also offers all businesses a way of meeting their net zero goals.”

“The study will be helpful for energy planning and policy-making in Ontario. Still, it leaves questions about how heavily Ontario will rely on the gas-fired capacity it already has and is developing—and when it will phase it out entirely. It is possible to get off gas well before the study’s 2050 target.”

“Climate Institute research shows that a switch from fossil fuels to clean electricity will allow Ontarians to spend less of their incomes on energy. By following this IESO study with a climate-aligned energy planning process and well-designed procurement tools, the Government of Ontario can make a measurable difference in positioning Ontario’s economy for success and making life more affordable for all Ontarians.” 

– Jason Dion, Mitigation Research Director, Canadian Climate Institute

Expert assessment recommends improvements to National Adaptation Strategy

OTTAWA, 15 December 2022 — Today, the Canadian Climate Institute released an independent assessment of the federal government’s first National Adaptation Strategy, recommending 11 ways to strengthen the Strategy to drive action on the biggest climate risks facing the country. 

While the Strategy and corresponding federal Action Plan represent a major step toward a more coordinated and effective nationwide response to the devastating effects of climate change, the Institute’s recommendations aim to ensure the Strategy is implemented effectively. 

Improving national coordination and investment in climate change resilience is essential at a time when more frequent and severe disasters fuelled by climate change are putting lives and livelihoods at risk, costing the economy billions, and driving up household expenses. According to the Institute’s recent research, failing to adapt to the ongoing impacts of climate change would slow Canada’s economic growth by $25 billion annually by 2025.

Toward a Safer and More Resilient Canada evaluates the National Adaptation Strategy based on four key elements outlined previously in the report, Closing Canada’s Adaptation Gap. The Institute’s assessment finds the federal Strategy takes important steps to build resilience by setting nationwide adaptation priorities for action, with long-term goals, medium-term objectives, and measurable near-and medium-term targets. The Institute also recommends substantive changes to make the Strategy more effective as it is finalized, including: 

  1. Identifying the top risks facing Canadians due to climate change, and clearly linking those to goals and objectives that will mitigate these risks.
  2. Identifying priority action areas in the Strategy to guide federal and other action plans.
  3. Using whole-of government tools to enhance coordination and apply adaptation considerations across the range of government decisions.
  4. Strengthening the monitoring and evaluation framework and aligning it more closely with the objectives and targets in the Strategy.  

To date, Canada’s approach to climate adaptation has been largely uncoordinated, leading to disjointed actions by different orders of government, the private sector, and civil society. Adopting a strengthened, coordinated National Adaptation Strategy would help align governments’ adaptation priorities and drive meaningful progress toward preventing and responding to the catastrophic effects of climate change in Canada, including floods and wildfires, hurricanes and heat domes, droughts and disappearing permafrost. 

QUOTES

“Climate impacts are getting worse by the day and we need a strong National Adaptation Strategy to protect Canadians. The current plan is a good start—specific improvements will position it for success.” 

—Ryan Ness, Adaptation Research Director, Canadian Climate Institute

“Until now, Canada’s approach to adaptation has left Canadians needlessly vulnerable to climate change. The new National Adaptation Strategy is a potential turning point—if strengthened and backed with the necessary investment, it can protect people and Canada’s economy from the worst of what’s to come.”

— Sarah Miller, Senior Research Associate, Canadian Climate Institute

 

“The National Adaptation Strategy points the way to protecting the health, safety, and prosperity of communities from coast to coast to coast. Ensuring the Strategy is as strong and effective as possible is the best possible gift for Canadians for 2023.”

—Rick Smith, President, Canadian Climate Institute

The Institute’s work on this topic

CONTACT

Catharine Tunnacliffe

Communications Director

Canadian Climate Institute

(226) 212-9883

ctunnacliffe@climateinstitute.ca

First National Adaptation Strategy a major step towards a safer and more resilient Canada

OTTAWA, November 24, 2022 – Canada’s first National Adaptation Strategy and federal Adaptation Action Plan, released today, represent a major step toward a more coordinated and effective nationwide response to the devastating effects of climate change. 

For a National Adaptation Strategy to save lives and costs, it needs to both set the right direction and be implemented effectively. In the report Closing Canada’s Adaptation Gap: Key elements of a National Adaptation Strategy, experts at the Canadian Climate Institute identify four key elements that would make the Strategy robust and effective. It should:  

  • Set national adaptation goals and priorities based on risk; 
  • Identify immediate and actionable short-term policy priorities; 
  • Define clear governance processes to improve effectiveness and coordination; and 
  • Create a robust framework for measuring progress and enhancing accountability.

The Strategy and Action Plan released today address or partially address each of these elements. The Strategy identifies long-term goals and objectives for climate change adaptation in Canada across five key areas, and the Action Plan lists important new actions and investments the federal government will make to boost progress in those areas, as well as existing investments that will continue. The Strategy also commits the federal government to coordinating implementation with other orders of government, and proposes specific outcomes against which progress will be measured. 

There are also several opportunities for clarification and improvement. Additional detail is needed regarding how the overall goals and priorities of the Strategy address Canada’s biggest climate risks. The processes and responsibilities for coordinating implementation, monitoring progress, and regularly updating the strategy and action plans are currently unclear. And there are still more levers the federal government can use to move climate adaptation forward beyond those outlined in the Action Plan.  

The Canadian Climate Institute will publish a detailed analysis of the National Adaptation Strategy in the weeks ahead. We will assess how well the strategy prepares Canada for a changing climate and make recommendations for improving the strategy and its implementation as it is finalized. 

Quotes

“From Hurricane Fiona in the East to atmospheric rivers, heat domes, and fires in the West, climate change is already here. A credible and coordinated National Adaptation Strategy will help governments across Canada prioritize measures that protect Canadians from its worst impacts. This Strategy is a major step towards a safer and more resilient Canada—now it’s time to iron out the wrinkles and get to work. Lives and livelihoods are at stake.” 

—Ryan Ness, Adaptation Research Director, Canadian Climate Institute

“Climate change is already making life more expensive and more dangerous. Reducing Canadians’ vulnerability to worsening climate impacts is essential to protect our health, safety, and prosperity. Every dollar invested in adaptation can save $13-$15 down the road—we can’t afford to delay making our communities safer and more resilient.” 

—Sarah Miller, Adaptation Research Associate, Canadian Climate Institute

“Climate change damage is costing Canada billions of dollars a year. This new strategy gives us a fighting chance to staunch the bleeding. While there is still more to do to ensure this strategy drives meaningful progress, its implementation will help Canada prepare for the threats ahead.”

—Rick Smith, President, Canadian Climate Institute

Key facts

Action on adaptation is long overdue: damages resulting from climate change are already a significant drag on economic growth and a major financial burden on households in Canada, according to the Institute’s recent report Damage Control: Reducing the costs of Climate Impacts in Canada. Our research finds: 

  • Climate change is already pushing up the cost of living in Canada. By 2025, the average Canadian household could be worse off by $700 a year due to climate change-related factors alone. 
  • Alberta, the province most exposed to weather-related disasters, could experience median GDP losses at mid-century of $2,890 per capita in a low-emissions scenario or $3,920 per capita in a high-emissions scenario. 
  • Without investing adequately in adaptation, all households will lose income due to climate impacts, and low-income households will suffer the most—losing between 12 per cent of their income in a low-emissions scenario and 19 per cent in a high-emissions scenario by the end of the century. 
  • By 2025, Canada will see $25 billion in losses from the warming experienced since 2015, relative to a stable-climate scenario.
  • By 2055, those damages could rise to $100 billion and wipe out half a million jobs. 
  • All of these damages represent only the “tip of the iceberg” when it comes to the climate damages Canada’s economy and society are likely to face. There remain many below-the-waterline risks that can’t yet be accurately modelled.
  • Proactive adaptation measures can cut climate costs in half, and when combined with global emissions reductions, can deliver cost savings of three-quarters. 
  • Adaptation provides a significant return on investment, producing economic benefits of $13-$15 for every $1 spent through avoided direct and indirect costs. 

Contact

For further resources or to arrange an interview with one of our experts, please contact: 

​​Janina Stajic

jstajic@climateinstitute.ca

(226) 212-9883

Background 

Communities across Canada have been hit hard in recent years by the devastating impacts of climate warming: 

  • Hurricane Fiona was the most costly extreme weather event ever recorded in Atlantic Canada, according to the Insurance Bureau of Canada, resulting in insurance payouts of $660 million (excluding additional damages not covered by insurance). 
  • Last year, record torrential rains submerged Vancouver, disrupting the $550 million worth of cargo that moves through the massive port daily, for months on end. 
  • Canadian homeowners have spent 42 per cent more on their home insurance premiums in the past decade as a direct result of climate change-related damage to properties. Homeowners in Alberta, which is particularly vulnerable to wildfires, experienced a 140 per cent increase. 
  • Climate change is also partly responsible for the rising price of groceries—last year, extreme weather raised global food prices by 28 per cent. 
  • Three of the six largest claims ever for federal government disaster assistance came from British Columbia in 2021—$3.5 billion from the November floods, $960 million from spring flooding, and $420 million from wildfires.