Permitting reform for clean energy projects in New York and California

Introduction

The 2022 Inflation Reduction Act in the United States is expected to channel at least US$370 billion in public funds to develop renewable energy, electric vehicles, clean fuels, advanced biofuels, and other clean technologies. It represents a generational investment in the clean energy transition—and one that is already paying dividends

But despite its potential to transform the US economy on the path to net zero, the Inflation Reduction Act does not automatically translate to “shovels in the ground.” 

Meeting the United States’ climate goal of net zero emissions by 2050 requires new clean electricity generation equivalent to constructing two 400-megawatt solar power stations every week for the next 30 years, according to one analysis. Yet it has historically taken four to five years to build this type of large-scale solar project in America.

The challenge is even greater for transmission infrastructure. Clean electricity will be the backbone of a net zero economy, but on average it takes over a decade to build new transmission lines. If the United States is unable to more than double the pace of transmission expansion, from 1 per cent a year to an average of 2.3 per cent a year from the present day until 2030, over 80 per cent of the potential emissions reductions created by the Inflation Reduction Act could go unrealized. 

There are two main reasons why it takes so long to build clean energy projects in the United States. The first relates to the complex and time-intensive permitting processes that project proponents 1 must complete, often involving multiple levels of government. Second, local opposition to projects and the politicization of clean energy development can cause significant delays. 

As this case study will explore, these two issues are related: permitting processes that lack sufficient community engagement can erode local support, trust, and buy-in for projects, adding delays to what are often already lengthy review processes. Consequently, lawmakers at the state and federal level have begun implementing reforms aimed at expediting permitting processes while strengthening community engagement to ensure that clean energy projects are built more quickly. 

While the challenges with reforming federal permitting tend to get the most attention, this case study focuses specifically on state-level reforms. The majority of clean energy projects in the United States must acquire state level permits and undergo state assessments before proceeding with construction, whereas federal permitting processes often exempt projects that are expected to have insignificant impacts, including many clean energy projects. As a result, reforms at the state level can have a large impact on getting clean energy projects built expeditiously, and also have clear parallels with how provinces review and approve projects in Canada. State-level reforms can also provide rich examples of policy experimentation, where the most effective reforms can be adopted by other governments that are experiencing similar challenges. 

Within this context, this case study examines permitting reforms implemented by New York and California, two of America’s most populous and economically powerful states, and also two climate policy leaders. Specifically, we look at whether these reforms are fully achieving the goal of getting projects built faster. It then concludes by exploring what lessons Canadian governments can glean from these experiences, particularly given the important jurisdictional and governance differences between the two countries. 

How the permitting process for clean energy projects works in the United States

Figure 1 contextualizes state-level reforms within the bigger permitting process in the United States. While the process for any given project ultimately depends on the jurisdiction where it is located and the nature of the project itself, permits and environmental reviews can be triggered at local, state, regional or interstate, federal, and/or Indigenous (or tribal) levels of government. This complexity reflects the fact that the United States—like Canada—has a federal structure of government. As a result, there are multiple permitting processes from various orders of government that clean energy project proponents must comply with before they can proceed with construction.

Figure 1: Summary of project permitting processes in the United States

This figure illustrates how regulatory processes operate at various government levels in the United States. It is important to note that project characteristics and/or size determine the dependency of environmental assessments, leading to certain exemptions from the permitting processes mentioned above. Furthermore, the power of local authorities to grant permits for clean energy projects may be limited depending on whether local governments have the freedom to make their own rules (home rule) and the extent to which state laws empower them to do so (state enabling).

At the local level, every project—including projects in both New York and California—must acquire a land-use permit in compliance with local by-laws and zoning ordinances. At the state level, most governments (with few exceptions) require project proponents to apply for numerous permits, including both New York and California. For example, depending on the size of the project and the state in question, project proponents might have to apply for state-level permits and comply with state regulations and assessment frameworks, such as demonstrating compliance with endangered species or migratory bird protection laws. Additionally, a select number of states, including New York and California, have environmental review laws that require an assessment of a project’s environmental impacts before permits are granted. 

The permitting process at other levels can overlap with the local and state-level processes. While outside of the scope of this case study, these warrant a few comments: 

  • Regional and interstate: Projects that cross state boundaries (e.g., renewable generation and transmission projects) are subject to additional approval from Independent System Operators which govern at either the state or interstate level. For example, renewable energy projects looking to connect to the electricity grid must apply for an interconnection request. The Federal Energy Regulatory Commission also plays a role in permitting transmission projects in select cases.
  • Federal: Larger projects have to apply for federal permits and undergo a federal environmental assessment (e.g., under the National Environmental Policy Act). Similar to the state level, there are various federal laws and regulations governed by a vast array of federal agencies that grant permits for various projects. In cases where multiple federal permits are required, a lead federal agency coordinates all permitting. 
  • Indigenous: Native American tribes were granted authority in 2012 to establish their own regulations, in accordance with Bureau of Indian Affairs guidelines2. However, granting long-term leases for clean energy projects on federally designated tribal lands still requires the approval of the Secretary of the Interior

State-level regulatory reforms 

New York and California have taken bold steps to expedite clean energy projects. This section provides an overview of the major changes underway.

New York

New York’s state legislature passed the Accelerated Renewable Energy Growth and Community Benefit Act in 2020, the first comprehensive permitting reform at the state level.

The Act is multifaceted but centres around building out renewable energy generation capacity and significantly accelerating project approval timelines. It created the Office of Renewable Energy Siting to serve as a “one-stop shop” to address permitting challenges, conduct impact assessments, and to support project proponents to apply for state permits. It also established statutory time limits for issuing building permits, ranging from a maximum of six months for projects located on pre-approved brownfield sites to one year for all other projects. The Act also states that a permit will be automatically approved if the Office of Renewable Energy Siting does not make a determination within the required timeframe.

These reforms are primarily targeted at large-scale projects. Only projects with a capacity of 25 megawatts or greater will be administered through the Office of Renewable Energy Siting. However, projects with a capacity ranging from 20 to 25 megawatts are eligible to opt into the Office of Renewable Energy Siting process

In aggregate, these regulatory changes could dramatically shorten permitting process timelines. Prior to the passage of the Act, it took approximately five to ten years to get renewable energy projects to the construction stage—a clear impediment to achieving New York state’s legally-binding target of 70 per cent renewable electricity generation by 2030. Under the new process, renewable energy projects could conceivably get approved in as few as two years.

The Act also creates a Build-Ready program that allows the private sector to proactively identify and nominate brownfield sites for renewable energy development—sites that have, at some point in the past, received project approvals for economic development (for example, a retired industrial plant). If deemed viable, the New York State Energy and Research and Development Authority works closely with municipalities to advance the permitting and interconnection process. Once the site is fully permitted and approved, it is auctioned off to private renewable energy developers.

New York’s Accelerated Renewable Energy Growth and Community Benefit Act also includes provisions for community benefits and employment. All new renewable energy projects administered through the Office of Renewable Energy Siting and the New York State Energy and Research and Development Authority are required to provide a benefit package for the host community of the project in the form of utility bill credits and other community benefits. These benefit packages are intended to help get community buy-in early in the process to reduce the likelihood of opposition and future delays. Additionally, the Act provides funding for communities to intervene in the approval process to ensure that they’re receiving tangible benefits from proposed projects. 

Lastly, the Act authorizes an expedited permitting process for transmission projects in existing rights-of-way and creates a program to invest in distribution and local transmission capital plans to meet the state’s climate goals. 

California

Clean energy project construction in the state of California is notoriously difficult. California Governor Gavin Newsom recently stated in an interview that “people are losing trust and confidence in our ability to build big things.” And the data backs that up. Among all the western states, approvals for new clean energy projects take the longest in California

Climate change, and the need to dramatically cut state-wide emissions, have put these regulatory barriers in clearer focus. The increasing frequency of extreme weather events in the state, such as recent heat waves and wildfires, have repeatedly threatened the capacity, reliability, and financial viability of the electricity grid. Moreover, the state needs to dramatically increase its supply of clean energy to achieve its climate targets.

Consequently, in 2022 California started reforming its permitting process, starting with Assembly Bill 205

In many respects, the bill mirrors the reforms implemented in New York. It provides the California Energy Commission with the sole authority over permitting for wind and solar projects over 50 megawatts and storage projects over 200 megawatt-hours. Assembly Bill 205 also establishes statutory limits of 270 days for Environmental Impact Reviews.

The California reforms also include requirements for community and employment benefits, similar to those in New York. Assembly Bill 205 mandates the inclusion of community benefit plans in project approval to address or mitigate local opposition, and establishes labour and prevailing wage standards as a prerequisite for projects to enter into this newly established process under the California Energy Commission. Project proponents are required to partner with one or more community-based organizations to provide job training, community assets like parks, and investments in public infrastructure. The California Energy Commission can also place various other conditions for project approval as a means to address local concerns.   

Strengths of the regulatory reforms

Both the New York and California regulatory reforms have the potential to expedite clean energy projects and generate local economic benefits while upholding environmental protections. The reforms have several core strengths, including: 

1) Providing more certain timelines for project proponents can make a greater number of vital clean energy projects financially viable.

Lengthy permitting processes for clean energy projects do not just slow projects down; they also adversely affect the bankability and economic viability of a project. Project proponents need to invest in engagement efforts with local communities and Indigenous Peoples and hire lawyers to navigate the complex administrative processes. At the same time, project proponents need to continue paying their employees during the regulatory process, which is especially challenging given that projects are not generating revenue at this stage. Ultimately, repeated delays might force project proponents to seek additional financing—which becomes increasingly challenging over time—or abandon the project altogether 3.

The reformed system in New York has already proven to be faster and more predictable than the previous process. Publicly available data indicates that of the eight renewable projects entirely handled through the new Office of Renewable Energy Siting process, it has taken less than eight months on average to receive a permit. Only one project took a full year to issue a permit,  the maximum allowed by law. 

Initial data indicates that these reforms in New York have also helped cut the entire timeline for getting projects built, from start to finish. Before the Act, the entire process could take five to ten years; after its passing, seven of eight projects were approved within two years, and the eighth took two years and one month.

The California reform, by contrast, is too new to determine its effects on permitting timelines. But given that it implemented similar changes to the New York reform, it is positioned to drive similar results.

2) Mandating community benefit agreements can help reduce local opposition and expedite the permitting process. 

A recent U.S. study showed that concerns about decreasing land values were the most common concern expressed by locals opposed to clean energy projects. The analysis also indicated that project opponents believe that the site of a clean energy project could be put toward a more productive use for their local community. Lastly, the analysis found that feelings of not being heard or adequately integrated into the permitting process increased local opposition. Misinformation about the purported harms of renewables also poses challenges for renewable projects seeking local land-use permits. 

The reforms in both New York and California require community benefit agreements between the project proponents and the local community. They are designed to generate tangible benefits for host communities to offset the types of concerns that have historically delayed or cancelled project development. Benefit agreements can help address concerns over property values and land use by encouraging investments in community centres, schools, and other valuable community resources. For example, EDF Renewables’ Tracy Solar Energy Center project, permitted under New York State’s Office of Renewable Energy Siting, plans to dedicate US$20,000 annually to local and community-driven initiatives in the project area over a period of ten years once the site becomes operational in 2025.

New York even goes a step further by requiring project proponents to provide utility bill credits to affected communities and funding to facilitate community involvement in clean energy projects. The proposed Mill Point Solar I project, for example, commits to providing US$1.25 million over the first ten years to be distributed evenly across utility customers within the Town of Glen. These types of agreements help community members to participate in the permitting process and the energy transition more broadly. 

An additional strength of community benefit agreements is that they indirectly prioritize projects that are more financially stable. Developing such agreements takes a high degree of coordination, planning, and strong financials, all of which helps screen out weaker projects. 

Overall, embedding community benefit agreements can help set and formalize expectations for both communities and proponents, speeding up the process and getting the buy-in of the local community. Both states’ reforms operate from the assumption that well-designed benefit agreements are a necessary investment in sustaining local support for the project, and the earlier these agreements are established the better.

3) Eliminating all of the permitting costs for clean energy projects on brownfield sites helps to ensure that more get built. 

New York’s Build-Ready program flips the script on the permitting process for clean energy projects. By identifying, evaluating, and permitting brownfield sites for clean energy project development while simultaneously engaging with local communities to create a benefits package, the Program eliminates all of the costs and uncertainty for project proponents associated with the permitting process. Once the permits and interconnection requests have been approved and the site has been auctioned off to a project proponent, construction can begin right away without fear of the project being tied up in regulatory delays and with limited risk of litigation.   

The California reforms, by contrast, do not include any provisions to accelerate projects on brownfield sites.

4) Setting time limits on litigation and judicial reviews should reduce costs for project proponents.

Lawsuits against development projects in the United States, often filed by local citizens concerned about the social or environmental impacts to the community, occur frequently. These disputes create a substantial obstacle to speeding up the construction of clean energy projects, both on a local and national scale, even when efforts are made to simplify the process of selecting project sites. 

Legal actions are particularly pervasive in California, where, under the California Environmental Quality Act (CEQA), “public projects” have been interpreted to include any private development. Court challenges stating that a CEQA review was incomplete or insufficient are cheap and simple to file, and can be done anonymously. Such filings can add significant delays to clean energy projects, or even scare away developers from making a proposal in the first place.

The reforms in California’s Assembly Bill 205 are attempting to address this issue by establishing a statutory limit on the timeline for judicial reviews. It aims to reduce litigation costs for project proponents and minimize the effectiveness of frivolous lawsuits.

It is still unclear, however, whether these reforms will have their intended effect. Statutory time limits could, for example, impede citizens from raising valid concerns with clean energy projects. Other tools, such as stronger anti-SLAPP legislation—which aims to reduce bad faith attempts to limit or compromise public processes—or ending the practice of anonymous filings could be considered to help address frivolous litigation. Moving forward, legal strategies to slow down or stop clean energy projects will likely remain a major source of resistance in the regulatory review process in both jurisdictions.

5) The ability to opt-in to accelerated permitting processes can give project developers added flexibility.

California’s reform creates an opt-in system, which allows project proponents to “forum shop.” For example, if the project site is in a jurisdiction that is heavily in favour of renewable development, they could choose not to opt-in to the California Energy Commission process. However, if proponents encounter local resistance, or if they are looking to build in a community that lacks experience with renewable projects, they can bypass the local level as the Commission has exclusive jurisdiction over all permitting if a project opts-in. 

This added flexibility allows project developers to choose the smoothest path through the permitting process, reducing the time it takes to get projects built. 

However, similar to the time constraints on legal action, this provision in the Californian reform could have unintended consequences by minimizing or skirting legitimate concerns at the local level. The extent to which this becomes a problem depends largely on implementation by the state. Provisions within the new California Energy Commission process require the state to ensure projects are in the public interest, which could help address these potential impacts. 

6) Minimum thresholds for project size helps prioritize larger projects, which often face the biggest barriers.

The reforms in both states are designed to accelerate big projects. In New York, the new permitting and regulatory processes are only applicable for projects exceeding 20 megawatts. In California, renewable projects must produce over 50 megawatts in power and storage projects over 200 megawatt-hours to be eligible. 

Prioritizing larger clean energy projects in the regulatory reforms makes sense for a few reasons. Larger projects typically face a higher degree of scrutiny in the permitting process due to their larger environmental impacts. As a result, the permitting process for bigger projects often involve more decision points and overlapping layers of government, and are therefore more likely to face unnecessary delay and friction. At the same time, the stakes are higher for getting big projects built: they have the potential to generate economies of scale that can both close the states’ clean energy gap while generating significant local benefits.

It is worth noting, however, that smaller-scale projects can also run into similar challenges as larger projects but would be ineligible to access expedited permitting processes to address those challenges. Small-scale projects are likely to have even greater financial difficulties arising from regulatory delays suggesting that additional reforms targeting small-scale project proponents could be beneficial. In these circumstances, a framework to fast-track small- and medium-sized projects that meet minimum standards, in terms of environmental and social impacts, could be helpful. 

Limitations of the reforms 

Even though the permitting reforms in New York and California are still new and have yet to be fully implemented, limitations are already starting to emerge. If left unaddressed, these limitations could undermine the efficacy of the reforms and, in some cases, lead to unintended consequences. 

1) Vague language in the California reform risks jeopardizing its effectiveness.

Although the California reform sets ambitious statutory targets to expedite permitting processes, vague language throughout the law could impede those efforts. For instance, the 270-day time limit for Environmental Impact Reviews can be extended if there are “substantial changes . . . that may involve new significant impacts . . . ; new information of substantial importance . . . is submitted;” or if the California Department of Fish and Wildlife and/or the State Water Resources Control Board determine that they need more time to obtain information. In fact, the plain language of the law states that the California Energy Commission must certify an Impact Review and issue a decision on an application “no later than 270 days after the application is deemed complete, or as soon as practicable thereafter.” That qualifier, “or as soon as practicable thereafter” is particularly broad and could be abused.

2) Expediting the permitting process could compromise the rights of Indigenous Nations and people in both California and New York. 

Under the UN Declaration on the Rights of Indigenous Peoples, which the United States has not endorsed but announced in 2010 it supports, ensuring the free, prior, and informed consent of affected Indigenous people is an essential component of project development. Fulfilling these obligations under UNDRIP requires relationship building with affected Indigenous nations and communities, which takes time and effort. As Trent Fequet, the CEO of the Steel River Group, an Indigenous business management firm, has stated, “when building relationships, it can only be done at the speed of trust,” and that means engagement early, often, and in community.

Yet the push to expedite permitting processes could compromise the objective of free, prior, and informed consent as outlined in UNDRIP. 

California has made a stronger effort to integrate Indigenous rights and title within the permitting process. The state of California is required, for example, to provide the project application to California Native American tribes “that are culturally and traditionally associated with the geographic area of the site and initiate consultation with those tribes.” The state is also required to integrate traditional Indigenous knowledge within the permitting process, and project proponents must include affected tribes within community benefit agreements. 

Even with these commitments, however, the prescribed time limits for the permitting process in California could lead to inclusion of Indigenous Nations that falls short of the UNDRIP principles. Unlike in Canada, the United States does not have an established legalconstitutional obligation to engage or even consult Indigenous governments before taking permitting actions that would significantly impact them. The vague language around the permitting process timelines (highlighted above) may provide some room for accommodation; however, it is still too early to determine how these extensions could be applied in practice. 

It is noteworthy that the text of the New York reform bill, by comparison, includes no such commitments or language around Indigenous rights and title in the permitting process. 

3) Both reforms increase administrative efficiency, but it is unclear whether staffing capacity will be sufficient to match the expected increase in clean energy projects over the coming years.

At the national and state level in the United States, limited agency capacity is one of the primary causes of permitting and other regulatory delays. Sustained, long-term funding and workforce planning to recruit experienced and knowledgeable staff are vital to ensuring that projects are reviewed in a timely manner. Scaling up administrative capacity to match the sharp increase in clean energy projects is critical for their timely completion.

The reforms in New York and California are designed to streamline the project permitting process and, as a result, help address these gaps in administrative capacity. The new permitting office in New York, for example, is specifically designed to put the previously disparate administrative resources under one roof. 

It is unclear, however, whether the reforms in either state are sufficient to ensure the necessary administrative capacity to meet the significant increase in applications. California has proposed providing, but has not yet budgeted for, additional, long-term funding to the California Energy Commission.

4) Clean energy interconnections are not adequately addressed by either reform, which highlights the federal government’s important role.

The process for connecting clean energy projects to the grid is often lengthy in the United States. Interconnection requests are evaluated sequentially (in the order that they apply) by Independent System Operators or Regional System Operators, which has created a backlog that is, in many cases, years long. As of the end of 2021, 1.4 terawatts (1,400 gigawatts) of power generation and storage capacity was awaiting interconnection throughout the United States, triple the amount queued up in 2016. California’s Independent System Operators queue has more than quintupled since 2014; in New York, the queue has increased from approximately 10 gigawatts in 2014 to roughly 75 gigawatts in 2021.  

That has led numerous clean energy project proponents to abandon their projects, with only 23 per cent of all proposed projects reaching completion across the United States, a rate that is declining. In fact, across the country, California and New York’s Independent System Operators have the lowest rates of projects that reach commercial operation, at 13 and 17 per cent respectively.

Unfortunately, California’s reform does not adequately address these interconnection challenges. Assembly Bill 205 does not make any changes to CAISO, its Independent System Operator. Efforts by New York to expedite its permitting processes and invest in distribution and local transmission capital plans hold promise, but ultimately, such efforts may not be sufficient. Transmission across state boundaries exceeds state authority, falling within federal jurisdiction. 

Recent announcements suggest that the federal government is starting to fill this gap. The Federal Energy Regulatory Commission recently had its backstop permitting authority expanded. If it were extended further, it could address even more of the interconnection challenges. Moreover, the Department of Energy released its proposed Coordinated Interagency Transmission Authorizations and Permits Program in August 2023, which would set a two-year limit on permitting reviews and would streamline the application process.

Lessons for Canada 

The permitting reforms in California and New York have great potential to speed up assessment and approval processes for clean energy projects. They are designed to not only shorten the timeframe for getting projects approved and built, but they include explicit provisions to share the benefits with local communities. This combination is designed to secure local buy-in earlier in the process and remove unnecessary friction, while still upholding the environmental and social standards that these processes were originally designed to protect. The strengths and limitations of these reforms are summarized in Table 1—the identified limitations serve to highlight areas for future improvement and additional research. 

Table 1: Strengths and limitations of New York and California’s permitting reforms for clean energy projects

StrengthsLimitations
1. Clear project timelines boost clean energy project financial viability.1. Vague language in the California reform puts its effectiveness at risk.
2. Mandatory community benefit agreements can reduce local opposition, increasing permitting speed.2. Expedited permitting may adversely impact Indigenous Nations and people’s rights.
3. Removing permitting costs on brownfield sites accelerates clean energy project development.3. Both reforms aim for administrative efficiency, but the state of required staffing capacities remain unclear.
4. Time limits on litigation can reduce project proponent costs.4. Neither reform addresses interstate electricity transmission, underlining the Federal government’s crucial role in this aspect.
5. Opting into accelerated permitting offers developers more flexibility.
6. Minimum project size thresholds prioritize larger, barrier-prone projects.

The reforms—both their strengths and limitations—offer some important insights for Canada, which faces similar challenges in rapidly scaling up clean energy projects to meet its climate commitments. And like the United States, frictions in regulatory review and permitting processes have been identified as a major barrier to getting these projects built quickly. The different structures of government between the United States and Canada—including the different division of powers between the federal government and states/provinces— mean that not all lessons are directly transferable. However, we identify a number of important insights that could help drive progress in Canada. 

First, the experience in New York (and, to a lesser extent, California) shows the value in establishing a “one-stop shop” for streamlining permitting processes. Second, the introduction of statutory time limits could provide developers in Canada with greater regulatory certainty and reduce unnecessary costs and delays. Third, New York’s program to proactively nominate and approve development on brownfield sites is another idea that could open up new possibilities for development in Canada, where environmental reviews on such sites can likely be shortened (particularly in cases where the new activity clearly has smaller environmental impacts than the activity originally commissioned on the site). Finally, the mandatory inclusion of benefit packages for host communities could reap similar gains in Canada and help secure local buy-in earlier in the permitting process. 

The shortfalls and limitations in each state also hold important lessons for Canadian governments. The California reforms highlight the dangers that accompany vague language when setting timelines for review processes, which may create loopholes that undermine the original intent of providing greater regulatory certainty for project developers. Secondly, the experience in both states emphasizes the importance of ensuring that any type of regulatory reform or shortening of timelines is consistent with the principles under the United Nations Declaration on the Rights of Indigenous Peoples. 

Here, the context is clearly different between countries. Canada has a constitutional responsibility to ensure meaningful consultation and engagement with Indigenous Nations and communities, whereas the United States has not formally endorsed UNDRIP. Canada’s federal government passed the UNDRIP Act in 2021; however, it is still unclear how this Act will be operationalized in project permitting processes. In fact, these commitments make any type of new time limits on the permitting process even more challenging within the Canadian context, suggesting that governments would need to proceed more carefully than in the United States. 

Another insight for Canada comes from the inadequate administrative capacity in each state, highlighting the importance of ensuring that any procedural reforms in Canada are matched with sufficient staffing to process a higher number of applications and environmental reviews. Finally, the inadequate focus of the United States reforms on transmission projects and interconnectivity across state boundaries should motivate Canadian governments to give the key issue of interprovincial transmission lines special attention and careful consideration in regulatory reforms.   

Canadian governments can and should learn from experiences in other jurisdictions as they attempt to address their own challenges with sluggish permitting processes. However, fully leveraging the lessons from other countries requires a more complete understanding of the sometimes unique barriers holding back project development in Canada. While it is clear that clean energy projects are not getting built at a pace consistent with the country’s climate objectives, it is not yet entirely clear where the biggest pinch points are within the Canadian system. Without an accurate and accepted diagnosis of current weaknesses, no amount of permitting reform can provide relief in the long term. Ongoing research at the Canadian Climate Institute is exploring these specific barriers in more detail, which can put governments in a better position to implement the lessons from other countries. 

The authors gratefully acknowledge the substantive contributions made by Jared Forman to drafts of this case study when he was a member of staff at the Institute in 2023.


References

Canada’s oil and gas sector, the road to net zero and regional fairness

When it comes to charting a path to net zero, the oil and gas sector faces unique challenges. While other sectors in Canada are steadily bending emissions curves down, oil and gas emissions remain stubbornly high as production, profits, and economic activity in the sector continue to grow. Oil and gas companies are reducing their focus on emissions reduction in favour of short term production, profits, and dividends. At the same time, global efforts to stabilize the climate raise real questions about the long-term demand for Canadian oil and gas: while a global transition to net zero requires more (low-carbon) steel and cement, it will need less oil and gas as fuel for the global economy, even when fossil fuels are produced with fewer emissions.

That tension sets up a dilemma: how much capital — both political and financial — should the federal and provincial governments spend to decarbonize a sector that international markets will eventually transform? This question has proven to be divisive, fueling a conversation in Canada with plenty of heat and not enough light.

These competing visions for Canada’s oil and gas sector are a barrier to achieving Canada’s 2030 targets and setting the country on a path to net zero. Phasing out production in the short to medium term through government policy is not a viable option. But nor will the policies Canada has implemented so far put the country on track to achieve its emissions targets — with rising emissions from oil and gas production representing one of the biggest challenges to Canada achieving its targets.

The key to unlocking sound climate policy for the oil and gas sector in Canada — and just as importantly, to framing a conversation in which Canadians aren’t talking past each other — is to explicitly surface something that has long been the third rail of Canadian climate policy conversation: regional fairness. How should different sectors (and the regions that house them) contribute to national pathways to net zero? And how should the costs of those reductions be shared across the country?

Those questions make long-time climate policy wonks wince because historically, debates about regional fairness have paralyzed policymaking in this country, just as they have in international climate negotiations. Yet they are questions that cannot and should not be avoided if Canada is going to successfully navigate the global energy transition.

Finding an enduring path forward requires tackling fairness head-on. An explicit focus on fairness acknowledges up front that policy solutions require going beyond reducing emissions and achieving Canada’s emissions targets, just as it requires going beyond efforts to minimize the overall costs of reducing emissions or preserving the competitiveness of the Canadian economy. That doesn’t mean making policy by consensus, limited by the lowest-common denominator. Instead, it means getting creative to design policy that achieves Canada’s emissions targets in a way that is cost-effective, protects competitiveness, and isfair.

Adding regional fairness to the policy conversation leads us to four specific policies that can set the oil and gas sector in Canada on a path to a competitive future consistent with a net zero Canada and a net zero world, while explicitly accounting for the fact that the transition from here to there requires some runway. Some of the policies are obvious, and some perhaps less so. But together, these four policies can provide a coherent package that is greater than the sum of its parts:

  1. Stringent regulations to dramatically reduce leaking and non-emergency flaring of methane from upstream oil and gas production.
  2. Public financial support for carbon capture and storage in the oil and gas sector — including both the Investment Tax Credits already proposed, as well as potential additional targeted support to further de-risk projects.
  3. An emissions cap for Canada’s oil and gas sector, going above and beyond the economy-wide carbon pricing that already applies.
  4. A government-backed “transition” investment taxonomy to identify and scale private investments that significantly reduce emissions from hard-to-decarbonize sectors.

What does success look like?

Before we get into the policy details, let’s take a step back. What problems are governments trying to solve? Understanding what success looks like is the essential first step toward understanding how fairness fits into the bigger picture.

Goal 1: Emissions reductions

Ultimately, the goal of mitigation policy is to achieve Canada’s emissions targets in order to reduce the costs and risks associated with a changing climate. A summer full of heat and wildfires — globally and across every region of Canada — has served to underline the necessity of this ambition.

The stringency of Canadian climate policy has ramped up over the past decade, which has led to a measurable dent in emissions. However, as the figure below illustrates, unless Canada quickly implements all of the additional policies it has proposed, it will drift further off-track from its 2030 target.

This trajectory matters because failing to achieve the 2030 target makes getting to net zero by 2050 harder. Moreover, the challenge of emissions is a cumulative one: the fewer emissions on the way to net zero, the more progress we make in addressing climate change.

This graph from 440megatonnes.ca shows the total greenhouse gas emissions for Canada from 2005 to 2050. Projections show the evolution of emissions up to 2030 in 3 different policy scenarios: legislated, legislated and developing, and legislated, developing and announced.

While the goal is to reduce emissions economy-wide, it’s hard to disentangle that broader goal from emissions from producing oil and gas in particular. Greenhouse gas emissions generated from oil and gas production (specifically, Scope 1 and 2 emissions associated with the sector) are actually Canada’s biggest and fastest growing set of emissions. The sector was responsible for producing 189 Mt of greenhouse gas emissions in 2021, which represented 28 per cent of Canada’s official total. The oil sector has seen improvements in emissions intensity (the emissions produced per barrel of oil), but these improvements have been swamped by increases in overall production driving the increases in emissions.

Goal 2: Cost-effectiveness

In addition to driving down emissions, climate policy should also seek to minimize the economic costs of achieving climate goals. Policies that impose lower costs on businesses, individuals, and governments help support clean growth and higher income for Canadians. Considering the cost-effectiveness of policy, in other words, explicitly recognizes that some actions to reduce emissions are costlier than others, and that more expensive emissions reductions would be counter-productive to the wellbeing of Canadians.

That doesn’t mean Canada should slavishly pursue textbook economic efficiency, but it shouldn’t ignore costs either. Shutting down oil and gas production in Canada would no doubt reduce Canada’s emissions, but doing so would be expensive. At the other extreme, an oil and gas sector that fails to adapt to changing global markets could also result in high costs from uncompetitive assets that ultimately become stranded.

In this sense, considering cost-effectiveness means considering the historical, current, and future economic benefits that the oil and gas sector generates. Oil and gas still occupies an important segment of Canada’s economy, generating around five per cent of GDP, and the sector has boosted incomes for workers in oil and gas-producing provinces. It also generates significant revenue — from both income tax and resource royalties — for provincial governments.

Pursuing cost-effective climate policies is essential to the future prosperity of Canadians. And in the context of Canadian oil and gas, designing policies that both minimize costs and generate transformational emissions reductions can create a smoother transition as global energy demand shifts.

Goal 3: Competitiveness

Sound climate policy should bolster industries’ ability to attract climate-aligned investment in order to support economic growth, jobs, and the wellbeing of Canadians. When it comes to the oil and gas sector, there are two sides to the competitiveness coin.

On the one side, if domestic climate policy constrains oil and gas production, rather than emissions reductions, supply from other countries would fill the gap as long as global demand persists, leading to what economists call “emissions leakage.” The net result is the worst of both worlds: a potentially big hit to Canada’s trade balance — as of 2022, oil and gas made up about 30 per cent of Canada’s exports — with negligible impacts on global emissions. These global realities underpin the logic behind Canada’s output-based pricing system, which is a specific type of carbon pricing system for heavy-emitting sectors that maintains an incentive to reduce emissions while simultaneously shielding Canadian producers from undue competitiveness pressures.

On the other side of the coin, a global shift toward net zero also threatens the competitiveness of Canadian oil and gas, but in a different way. New scenarios from the International Energy Agency, BP, as well as the Canada Energy Regulator show that in a world that takes climate seriously, global demand for oil plateaus in the next five years and then declines, potentially rapidly. Even in the CER’s scenario where the rest of the world moves more slowly toward net zero, Canadian oil production falls by 22 per cent and its gas production by 37 per cent. Very quickly, policies elsewhere such as low-carbon fuel standards or border adjustments could mean that only Canadian fuels produced with fewer emissions can compete in international markets.

This raises an essential truth for Canadian climate policy. The combustion emissions associated with exported Canadian oil and gas (i.e., Scope 3 emissions in the jargon) don’t affect Canada’s climate targets, because these emissions accrue to other countries where the fuels are burned. However, as global demand for fossil fuels declines, these combustion emissions do have big implications for the benchmark price of oil, for the long-term competitiveness of the Canadian oil and gas sector, and for the Canadian trade balance. The U.S. Inflation Reduction Act is a prime example of how this transition risk could manifest, as that landmark climate and industrial policy bill is expected to accelerate the shift away from fossil fuels in Canada’s primary export market.

Competitiveness is not only about the near term. Sound climate policy should also consider how regions can attract and maintain investment through the transition. Over time, the oil and gas sector might well transform itself to provide goods and services — and jobs and income — that are consistent with a net zero global economy.

Goal 4: Regional fairness

Canada’s existing approach to climate policy is roughly consistent with the three goals we’ve listed so far. Economy-wide carbon pricing helps drive low-cost emissions reductions from all sectors. Using an output-based approach to carbon pricing for sectors such as oil and gas that are highly emissions intensive but also traded in international markets help protect Canada’s international competitiveness and avoid the challenges with emissions leakage discussed above. Methane regulations could drive low-cost abatement from emissions that are hard to price. All else being equal, ratcheting up the stringency of these policies, especially carbon pricing, would be a way to cost-effectively achieve deeper emissions reductions while protecting competitiveness.

But that’s not the end of goals for sound policy. Even though it’s the trickiest to measure and operationalize, a fourth goal matters too: regional fairness.

The question of how to share effort in achieving national climate across provinces and territories is particularly thorny and is the dimension that we see as most important to advancing climate policy in Canada. Jurisdiction over climate is shared between provincial / territorial and federal orders of government, which makes addressing regional fairness a complex — and unavoidable challenge.

There’s more than one way to think about a fair allocation of effort across sectors and regions. Should regional fairness be measured in terms of emissions reductions going forward? Cumulative emissions reductions over time? Improvements in emissions intensity? Emissions relative to a target year baseline? Costs of abatement? The challenge inherent in these different definitions is that there is no objective, correct way to measure fairness, but a clear discussion of the tradeoffs can at least help move the negotiation forward.

In recent years, Canada’s climate policy approach has dodged this question with some success. An economy-wide carbon price drives cost-effective emissions reductions irrespective of which sector or region they come from. Regions that have more cost-effective emissions reductions can do more. In other words, Canadian policy has focused on the equal treatment of sectors and regions.

As Canada pushes toward deeper emissions reductions, however, that equilibrium is no longer holding.

Canada’s legislated net zero accountability process is increasingly, and necessarily, tracking progress sector-by-sector. Other countries are doing the same. Sector emissions are asymmetrically distributed across provinces due to differences in geography and geology as well as historical choices and economic development. Provinces such as Alberta and Saskatchewan see the prospect of more aggressive policy for the oil and gas sector relative to other sectors — such as the proposed cap on oil and gas emissions — as unfair. Importantly, these concerns are as much about the costs of required emissions reductions as the magnitude of required emissions reductions.

Fairness also cuts the other way. As Canada maps pathways to net zero, deeper and deeper emissions reductions are required. Increasing Canada’s carbon price beyond the scheduled increase to $170 per tonne by 2030 across the economy could fill the gap, driving additional emissions reductions across the economy. Yet delivering the required additional emissions reductions through an economy-wide carbon price exacerbates the distributional challenges across regions and sectors.

Oil and gas emissions could well continue to grow, as they have significantly since 2005, given high costs of abatement in the sector. If Canada is to stay on track to its target, other sectors would have to reduce emissions even more deeply, essentially getting a smaller share of Canada’s allowable emissions. Meanwhile, the economic benefits of those emissions-intensive activities — which increased local income significantly — are concentrated in British Columbia, Alberta, Saskatchewan, and Newfoundland and Labrador.

Historical emissions trends also have a bearing on perceived regional fairness. Historical actions to reduce emissions are immaterial to the cost-effectiveness of emissions reductions moving forward; they are sunk costs. Yet not all sectors have undertaken the same historical efforts to reduce emissions, meaning some regions have contributed more to historical emissions reductions than others.

Finally, in considering fairness across regions, we should consider not only how national emissions reductions are distributed, but also how the costs of those reductions are distributed. As we’ll see below, policies can distribute costs of emissions reductions in different ways. Federal subsidies, for example, transfer the cost to taxpayers across Canada.

Policy that’s perceived as unfair engenders opposition and is unlikely to last. Yes, different approaches to assessing fairness can be contentious, but ignoring fairness will ultimately only exacerbate these challenges. Explicitly considering regional fairness could unlock durable, effective climate policy in Canada.

Four policies that matter for the oil and gas sector

Four policies can collectively square the tensions and trade-offs that exist across the four goals of emissions reductions, cost-effectiveness, competitiveness, and regional fairness. Each has trade-offs. Yet on balance, this policy package addresses the different challenges raised by each individual policy.

Policy #1: Stringent regulations on methane for upstream oil and gas production

Let’s start with the lowest-hanging policy fruit for the sector. The federal government is currently planning new regulations requiring oil and gas firms to take actions to dramatically reduce how much methane they leak and flare into the atmosphere. The anticipated regulations will require oil and gas producers to reduce their methane emissions by 75 per cent by 2030. And it is noteworthy that the Alberta government has suggested this level should be more like 80 per cent, and the B.C. government has committed to “near zero” methane emissions by 2035 — these reductions are widely recognized as being low-cost and achievable.

The federal government should move forward with its regulations without delay, for multiple reasons.

Reducing methane is hugely important from a climate perspective, because methane is a powerful greenhouse gas. Getting these emissions under control is particularly important given that current methane emissions from the oil and gas sector are significantly under-reported: the problem is bigger than the National Inventory Report suggests it is.

Methane reductions are also inexpensive because stopping leaks and finding alternatives to non-emergency flaring means saving additional gas that can be sold. Because many activities and technologies to reduce fugitive methane are cheap, regulations that require regular actions to check and mitigate methane leaks are a cost-effective solution and fill an important gap. Analysis from Dunsky Energy and Climate Advisors suggests that deep cuts in methane emissions are inexpensive: Dunsky estimates that the government’s goal of 75 per cent reductions could cost the equivalent of about $11 per tonne of CO2e on average. New Climate Institute analysis shows that simply following through on the planned methane regulations can deliver one third of the emissions reductions required to put the oil and gas sector on a pathway aligned with Canada’s climate targets. Furthermore, relying more on methane reductions actually decreases the costs of those reductions.

Tackling methane also makes sense for the long-term competitiveness of the sector. As global demand for gas declines, given international progress in reducing emissions, Canada’s oil and gas sector may have other opportunities, such as producing blue hydrogen or asphalt. Yet those opportunities are only consistent with net zero if firms eliminate their upstream methane emissions. Even in the short-term, the United States is likewise focused on deep cuts in its methane emissions, leveling the playing field for Canadian firms.

Still, the ultimate effectiveness of Canada’s methane regulations will hinge on elements of regional fairness. Ensuring a consistent price signal across provinces and regions is critical to the perceived fairness of the policy and therefore its durability. Given the fact that provinces like Alberta and British Columbia are pushing for a more stringent standard than the proposed federal approach, achieving this equitable balance seems doable. And because the regulations require oil and gas firms to take low-cost actions to reduce their own emissions, it minimizes other aspects of regional inequities, real and perceived. As we’ll see in a minute, that’s not the case for federal subsidies.

Policy #2: Targeted and temporary policy support for carbon capture and storage

Looking across the options that oil and gas producers have to reduce their emissions, carbon capture and storage (CCS) could have among the biggest impact on getting the sector on a net zero pathway (reducing methane being the other big one). Deploying CCS provides a way to significantly lower the carbon intensity of oil and gas production while demand still persists in global markets. That could be key for the competitiveness of Canadian oil and gas in the “mid-transition” (i.e., while international demand persists, but emissions increasingly matter).

However, deploying CCS technology at a sufficient scale to make deep cuts in emissions requires unprecedented capital investments. And these investments aren’t yet happening at scale, even in the presence of carbon pricing.

Policy support can help mobilize private investment from oil and gas companies to deploy CCS technology on oil and gas facilities. The federal government has proposed an Investment Tax Credit for CCS, though oil and gas firms are asking for more, including carbon contracts for difference that would guarantee the value of credits in existing carbon pricing markets (see the Canadian Climate Institute’s explainer on carbon contracts for difference).

Following through with both of these policy measures can get large-scale CCS projects built before 2030. Recent analysis by the Pembina Institute and the Climate Institute, for example, show that it’s only through the combination of carbon contracts for difference and the proposed tax credits that CCS deployment at existing oil sands facilities becomes economically viable. It also shows that no additional incentives — beyond those already announced — are necessary to get these projects over the hurdle rate, especially if carbon pricing can be made more certain through contracts for difference.

The combination of these policies can help address important gaps in the market, which means that public support for CCS infrastructure can have social benefits that justify the costs.

Policy uncertainty is a big barrier holding the oil and gas sector back from making big bets on CCS. Carbon contracts for difference reduce this uncertainty by guaranteeing that carbon prices (or the trading price of credits) will increase according to the set schedule laid out by governments. These contracts effectively give oil and gas producers insurance against future governments changing policy and undermining their investments to reduce emissions. Contracts for difference are also much less expensive than direct support, because they only pay out if future increases in policy stringency don’t play out as planned.

Absent this combination of tax credits and carbon contracts for difference, private firms are likely to underinvest in CCS. Firms know that they are unlikely to capture the full returns of potential innovations and, as a result, invest less in research and development than is socially optimal. Their experience might well lead to learning that makes CCS more effective and less expensive, but other firms can and will take advantage of those innovations. It could lay the groundwork for development of blue hydrogen, or even nascent industry based around Direct Air Capture and technologies that permanently remove CO2 from the atmosphere — technologies the IPCC now recognizes as necessary to keep warming below 1.5 degrees Celsius. In other words, CCS subsidies could pay off for society, even beyond oil and gas’s international demand horizon.

This policy combination of tax credit incentives and de-risking through contracts for difference, therefore, can help mobilize oil and gas investment and expertise to enable emissions reductions elsewhere in the economy. And these benefits could be felt long after global demand for oil and gas starts to decline: as the world accelerates its transition, better and cheaper CCS technology could provide a competitive advantage for Canadian cement, steel, and fertilizer in a global market that explicitly accounts for emissions.

These broader societal benefits may also provide a rationale for targeted federal and provincial support to develop CCS infrastructure, such as CO2 pipelines and sequestration facilities. Public support for a network of CCS infrastructure could allow these other hard-to-abate sectors, such as cement, steel, and chemicals, to directly tap into and utilize the same infrastructure as oil and gas. Yet because building this type of infrastructure is highly capital intensive, and because it’s difficult for any one company to reap the full benefit of the investment, policy support could help crowd in private investment and get these projects built. Here, public financing (loans, guarantees, insurance) could help move the dial.

But these policy supports also come with their own set of challenges and pitfalls.

First, it’s all too easy to over-subsidize. The Climate Institute’s cash flow analysis on the application of CCS on existing oil sands facilities shows that through the combination of incentives from existing and proposed government policy, oil sands operators could make healthy returns on the investment. At a point, these supports become less about sharing risk with industry and more about privatizing the benefits and socializing the risks. Public dollars have opportunity costs; spending them where they aren’t needed undermines the cost-effectiveness of policy.

Second, direct public support — whether it’s through direct subsidies or less direct means like public financing — comes with significant opportunity costs. Unlike other major sectors of the Canadian economy where demand is expected to remain stable or grow through the transition (e.g., renewables, low-carbon hydrogen, EVs, batteries, and even industrial commodities like steel and cement), demand for oil and gas products is expected to decline. And given that government budgets are finite, a dollar spent on emissions reduction for oil and gas means a dollar less for areas that offer higher growth potential. And the faster the rest of the world moves toward net zero, the greater the risk of building CCS for oil and gas projects that ultimately becomes unprofitable. As a result, CCS projects that are specific to oil and gas production are a potentially wasteful use of public dollars.

Third, CCS subsidies could also increase emissions. It is hard to “ring-fence” investments in CCS for oil and gas production. Providing public funding for CCS on one project could free up private capital for expanding or developing projects that make no attempt to reduce emissions. In other words, if public dollars for CCS ultimately crowd in investment in fossil fuel production more broadly, there’s a risk of locking in more emissions long into the future, both in Canada and internationally. Given the oil and gas sector’s plans for future growth and expansion, this risk is material. To mitigate these risks, the newly proposed Climate Investment Taxonomy from Canada’s Sustainable Finance Action Council (described more below) could provide clear criteria for whether or not specific CCS investments or projects genuinely align with net zero pathways.

Fourth, federal CCS subsidies raise regional fairness questions. CCS subsidies are funded by revenue generated from taxpayers across Canada, but fund specific actions in a sector concentrated in specific regions. In a vacuum, that’s a challenge for fairness, but perhaps less so through a broader lens: the federal government is in fact also providing other subsidies to sectors such as batteries and auto manufacturers located mostly in central Ontario, which raise fairness concerns from other regions.

These challenges emphasize the importance of designing public funding for CCS with caution, in line with the recently proposed framework by the Climate Institute and the Institute for Research on Public Policy. As illustrated by the figure below, this framework recommends focusing government support on projects that will have a greater chance of surviving declining global demand (i.e., those with lower production costs and lower emissions). It also means carefully choosing policy instruments that reduce the overall transition risk exposure for public investments.

This figure shows governments should consider project risk and policy risk when placing bets on oil and gas emission reduction projects.

Policy #3: An emissions cap for oil and gas producers

That brings us back to the federal government’s proposed cap on oil and gas emissions.

From an emissions perspective, the appeal of an emissions cap is straightforward. Canada’s oil and gas sector remains the largest source of the country’s greenhouse gas emissions. It is also one of the only sectors where emissions have grown since 2005 and where emissions are expected to keep growing. Unlike every other sector, low-carbon solutions are not yet being deployed at scale in oil and gas, and recent company announcements show a sector that is backing away from previous commitments for investment in emissions reduction.

Capping emissions would effectively create guardrails on emissions from future oil and gas activity. An emissions cap can enforce a decarbonization pathway consistent with the government’s 2030 and 2050 targets. It can also establish a regulatory incentive strong enough to hold the industry to its own net zero commitment. It’s for these same reasons that British Columbia is exploring its own emissions cap for its oil and gas sector, partly as a way to ensure that new liquified gas projects don’t jeopardize the province’s climate targets.

Moreover, a federal emissions cap would address potential negative environmental side-effects of CCS subsidies. It would reduce the risk that public funding contributes to locking in more emissions from the sector. An emissions cap would constrain total emissions in the sector, ensuring that oil and gas firms cannot simultaneously offset emissions from some projects using CCS (funded by subsidies) while increasing unabated production in others. It would also ensure that oil and gas producers bear some of the technological risk, should CCS not prove to be a viable solution for reducing greenhouse gas emissions at scale. It commits the sector to following through on its embrace of net zero by 2050.

Still, Canada’s climate goals are ultimately not sector-specific. An emissions cap would likely lead to a higher carbon price in the oil and gas sector relative to other sectors; as a result it will drive more expensive emissions reductions overall than simply increasing the carbon price across the full economy. But the alternative raises challenges too: as we discussed above, increasing the economy-wide carbon price (beyond $170 per tonne) is unlikely to result in transformative emissions reductions within the oil and gas sector and therefore raises important fairness concerns from other sectors that are doing the heavy lifting.

The fact that the cap is on emissions — and not production — helps protect the sector’s competitiveness by giving firms flexibility on how they comply, whether that is through direct abatement opportunities like CCS or electrification, or through purchasing credits on the market. Under the cap, firms that are lowest-cost and lowest-emissions will have a competitive advantage. Furthermore, the combination of an emissions cap with public funding for CCS would lead to more equitable sharing of the costs of those emissions reductions between firms and the public.

Viewed through a fairness lens, an emissions cap for the oil and gas sector has additional benefits. It would guarantee that the sector — and the regions that generate economic activity from it — would contribute its share of emissions reductions on a pathway to net zero, holding the sector to the commitments it has made, on a timeline consistent with Canada’s emissions goals.

Yes, trade-offs with this policy are real. An ambitious emissions cap would almost certainly impose a higher carbon price in the oil and gas sector, driving higher-cost emissions reductions. Yet the benefits that come from a more fair policy package can justify those higher costs. And at the same time, public funding also takes the edge off the higher costs for the oil and gas sector to comply.

A final note on the emissions cap: determining the rate of the cap decline — i.e., the stringency of the cap — remains a point of contention. Industry has concerns about how quickly it can mobilize CCS projects, which include the infrastructure to transport and safely store unprecedented volumes of carbon dioxide. Yet giving the sector too much flexibility on the timing of deep emissions reductions risks the perception (or the reality) that oil and gas firms will delay serious investments on the bet that future governments will relax, rather than accelerate, policy ambition. And claims about cost and time should be viewed through the lens of similar debates about compliance with historical environmental regulations where costs have typically been significantly lower than industry estimates.

Policy #4: A government-backed transition taxonomy

Fossil fuel firms and their investors are beginning to consider transition risk from declining global demand. Yet information about the industry’s transition risk isn’t standardized in financial markets, and the risk of greenwashing (i.e., firms investing more in marketing and communications than in emissions reductions) is widespread. Perhaps unsurprisingly, oil and gas firms tend to plan around global market scenarios that do not achieve net zero as they try to attract capital, rather than those projecting a significant decline in both global emissions and global demand.

The federal government formally adopting the Sustainable Finance Action Council’s proposed Climate Investment Taxonomy could help address the information problem. Like other taxonomies that codify and label individual parts of complex systems (e.g., biology), the climate investment taxonomy would create a standardized framework to help financial markets assess whether or not projects and investments are genuinely aligned with Canada’s climate goals. Important parts of Canada’s financial regulatory system, such as the Office of the Superintendent of Financial Institution, the Bank of Canada, provincial security regulators, and others are already starting to track the issue. What’s left is getting official endorsement from the federal government to create a new independent Taxonomy Council and Custodian, similar to what the government of Australia did this year.

By improving the information available to investors and capital markets, a Canadian taxonomy could help drive private capital to emissions-reducing activities in the oil and gas sector that are genuinely aligned with Canada’s climate commitments. That would be good for competitiveness. It would also enhances the fairness and cost-effectiveness of the overall package. The more private dollars that flow to emissions-reducing projects, the less public dollars are required to get projects over the finish line.

In other words, the taxonomy complements CCS subsidies and provides a robust framework for how to evaluate other types of public funding for fossil fuels. And in the long term, mandating other core pieces of investment infrastructure, such as climate disclosure, net zero target setting, and transition plans can help further improve the information that’s available to capital markets and unlock much-needed investment.

Some voices have raised concerns that the transition taxonomy would not actually reduce emissions from the oil and gas sector. However, the taxonomy, in combination with the emissions cap, helps assuage these risks: the cap ensures that the sector will reduce emissions, and the taxonomy helps mobilize capital to drive emissions reductions in Canada’s hardest-to-decarbonize sector.

Addressing regional fairness explicitly can future-proof Canadian climate policy

At the beginning of this essay, we asked the central question: how much capital — both political and financial — should the federal government spend to decarbonize a sector that international markets will eventually transform? Our answer: a significant amount of each.

As the country’s biggest and growing source of emissions — and in the short-term, an economic engine for trade and economic growth — the oil and gas sector urgently needs policy solutions to reduce emissions in the short term and to position itself for long term success. But sound policy must stand the test of time. Policy that has broad buy-in is more likely to do so. And that requires thinking about fairness explicitly.

Taking regional fairness seriously doesn’t mean ignoring emissions targets, costs, or competitiveness implications for industry. Yes, Canada needs the policies that effectively address failures in the market (i.e., carbon pricing, methane regulations, standardized information). Adding a fairness lens does, however, cast new light on both the problems and solutions for tackling emissions and investment in the Canadian oil and gas sector.

Ultimately, the four policies outlined in this piece complement one another and explicitly address the core goals of sound Canadian climate policy. Each element of the policy package we’ve proposed addresses trade-offs in other elements:

  • Increasingly stringent regulations on methane emissions can drive low-cost emissions reductions and can deliver around one third of the emissions reductions required to align the sector with 2030 targets, taking some pressure off the emissions cap.
  • A cap on oil and gas emissions ensures that Canada can achieve its 2030 and 2050 climate targets, even if it results in a carbon price that is higher than in other sectors. It ensures that other policies don’t undermine achieving emissions goals. And it ensures that the sector and the regions in which it operates are contributing to net zero pathways.
  • Public financial support for technologies like CCS can help the sector meet their obligations under the oil and gas cap, addressing fairness concerns from facing a higher carbon price. They can also offer value for public dollars even in the face of declining international demand for oil and gas by supporting CCS infrastructure that other sectors can use (while leveraging private oil and gas investment dollars).
  • A government-backed Climate Investment Taxonomy can help the oil and gas sector raise transition-aligned capital from the private sector to help pay for new investments under both the emissions cap and methane regulations, supporting low-carbon competitiveness but also cost-effective transitions to net zero.

Together, these four policies are greater than the sum of their parts, and can ensure that the oil and gas sector contributes to Canada’s clean energy transition. This package of policies would be fair for fossil fuel-producing provinces, the federal government, the industry, and the rest of Canada. And that just might be a ticket to a credible, durable pathway to net zero in the years ahead.

How to set up the Canada Growth Fund for success

The federal Budget 2023 included important news for the Canada Growth Fund, Canada’s recently established “green bank” to catalyze private investment in Canada’s clean economy. The Public Sector Pension Investment Board (PSP Investments), a federal Crown corporation, will manage the Growth Fund’s assets to deliver its mandate of attracting private capital to invest in Canada’s clean economy. 

That’s good news for getting the Growth Fund going fast. PSP already has expertise and resources, and has an arms-length relationship with the federal government.  

But here’s the challenge: to succeed, the Canada Growth Fund can’t focus on delivering private returns. The purpose of the Growth Fund is to invest in projects the market alone won’t invest in. Its mission will be to find projects that don’t currently deliver private returns , but will deliver bigger, broader benefits to society by unlocking additional private investment. That’s an important function, but one that is different than what PSP Investments is used to, and likely counter to the instincts of its investment strategists

We unpack some key differences between the functions of the Canada Growth Fund and PSP Investments and explore the implications for their respective investment strategies. We also discuss three ways to help make the relationship between the two institutions a success and enable the Canada Growth Fund achieve its purpose.  

The Canada Growth Fund and PSP Investments have distinct purposes and accountabilities

PSP Investments, established in 2000, is one of Canada’s largest pension investment managers with $230.5 billion in assets under management. PSP Investments’ mission is to manage these assets in the best interests of contributors and beneficiaries. The objective is to “invest its assets with a view to achieving a maximum rate of return, without undue risk of loss” and in line with the policies and requirements of the included pension plans. 

In contrast, the Canada Growth Fund was established in late 2022 and capitalized with $15 billion from the federal purse. Its purpose is to “make investments that catalyze substantial private sector investment in Canadian businesses and projects to help transform and grow Canada’s economy at speed and scale on the path to net-zero.” The Fund was created to support both economic and climate policy goals, including emissions reductions and Canada’s future economic well-being. Equipped with public money and established to drive public policy objectives, the Fund is ultimately accountable to the Canadian people. 

These distinct functions imply differences in investment strategies and decision criteria (see Table 1)

The Canada Growth Fund will use concessional finance instruments that help attract private-sector investors to get clean growth projects off the ground whose project economics are unattractive to conventional investors (including PSP Investments). Clean growth projects are often unprofitable to private investors because they rely on novel, high-risk technologies, require large upfront capital investment, and have long return horizons. Still these projects can generate significant benefits for Canadian society, furthering the transition to a low-carbon economy, creating jobs and generating learning spillovers for companies in the same or other sectors. But private investors are unable to capitalize on these society-wide benefits. The Canada Growth Fund’s purpose is to step in and lower risks for private investors just enough to make these clean growth projects palatable for them and thus realize the benefits for Canadian society. In other words, assuming higher risks than conventional funders must be part of the Canada Growth Fund’s investment strategy and necessary for achieving its purpose. At the same time, the Canada Growth Fund is also looking to recover its capital on a portfolio basis (i.e., not necessarily for each individual project) and recycling its capital base over the long term (i.e., not immediately). 

In contrast, PSP Investments does not invest on a concessional basis. It has no mandate to consider societal benefits in its investment decisions, which are exclusively dependent on project economics and risks/returns for investors. While PSP Investments has developed a climate strategy and has set goals with regards to shifting its portfolio toward assets that are consistent with Canada’s emission reduction targets, it is not the Fund’s purpose to support Canada’s climate objectives. Rather, taking climate and transition risks into account is simply part of prudent financial management to better serve the people that PSP Investments is accountable to, namely current and future retirees. 

In sum, the Canada Growth Fund and PSP Investments have overlapping but distinct mandates and accountabilities (see Table 1). These differences imply different investment criteria, or at least a different weighting of criteria (e.g., an asset’s projected financial returns vs. its anticipated role in the transformation of Canada’s economy). As a result, management of the Canada Growth Fund will require a different mindset (e.g., different level of comfort with risk) and different expertise (e.g., in domestic and global climate policy, concessional finance, technological innovation and low-carbon technology markets). 

The risk of conflating private and social returns could undermine effectiveness of the Canada Growth Fund

A key risk in this new arrangement is that Canada Growth Fund will be absorbed in PSP Investments’ ‘business as usual’ approach to fund management. The danger is that the Fund’s policy-focused mission wil lbecome conflated with a focus on private, rather than social returns, —whether intentionally or not. 

The good news is that important details about the relationship between the Canada Growth Fund and its new institutional home, as well as between the Fund and the federal government, still need to be hammered out. And this is an opportunity to reduce the risks we’ve outlined here and to instead set the Fund up for success. 

Here are three ways to mitigate the risks of these arrangements:

  1. The Canada Growth Fund must have a clear, transparent investment strategy. 

To operationalize the distinct purpose and mission of the Canada Growth Fund, it requires an explicit, transparent investment strategy, including a set of clearly defined and measurable performance criteria that set it apart from PSP Investments’ core business. 

The first reading of Bill C-47 suggests that PSP Investments will “incorporate a subsidiary for the purpose of providing investment management services to the Canada Growth Fund Inc.” The bill also introduces other amendments to the Public Sector Pension Investment Board Act that exempt the subsidiary from PSP Investment’s usual investment policies, standards, and procedures. In other words, this bill suggests a clear separation between PSP Investment’s core business and the management of the Canada Growth Fund, in line with this recommendation. 

The Canada Growth Fund’s investment strategy should be co-written by policy and finance experts, because the Canada Growth Fund’s work will reconcile these two areas. The strategy’s authors should have expertise in climate and clean growth policy, as well as finance. 

The Canada Growth Fund must aim to generate social returns in addition to being financially profitable. It must fund projects that are based in Canada and that yield returns to Canadians. This is not a trivial task. Global capital markets are usually not particularly concerned with localized benefits of investments: money simply goes wherever expected financial returns are highest. 

Importantly, the Canada Growth Fund’s strategy should be made accessible to the public. Transparency is key to building public trust in the new institution, and will create the foundation for holding the Fund accountable for its performance measured against its mandate. 

Australia’s Clean Energy Finance Corporation (CEFC), the world’s largest green bank, is an illustrative example of an institution guided by the kind of language that the Canada Growth Fund’s investment strategy could include. The CEFC’s purpose is to contribute to both the delivery of policy outcomes and the transformation of Australia’s renewable energy sector. Similar to that of the Canada Growth Fund, the CEFC’s role is to develop new markets by funding projects that private markets do not invest in. Like the Canada Growth Fund, Australia’s green bank invests on behalf of the Australian government. 

The CEFC’s investment mandate explicitly states its double objectives. The mandate defines a portfolio benchmark return that the CEFC has to achieve over the medium- to long-term. At the same time, the mandate also states that it should “have regard to positive externalities and public policy outcomes when making investment decisions and when determining the extent of any concessionality for an investment.” For instance, the investment mandate strongly encourages the CEFC “to prioritise investments that support reliability and security of electricity supply.” In its annual report, the CEFC has to report on both financial and non-financial outcomes of all its investments. 

  1. Fulfilling the Fund’s purpose requires bringing together a diverse set of expertise. 

The Canada Growth Fund’s investment decision-making committee and staff should draw on expertise on a variety of themes, including domestic and global climate policy, the functioning of Canada’s carbon markets, concessional finance instruments, net zero transition pathways, low-carbon technology innovations and markets. Formally consulting with policy experts, industry, civil society and Indigenous rights holders would enable PSP to integrate external perspectives on these themes. Decision-makers need to understand and know how to implement the Fund’s broader policy function in addition to achieving projects’ financial returns. Decision-makers need to understand and be comfortable investing in projects with higher risks and using newer technologies than some of the PSP Investment’s usual investments. 

Similarly, they need to understand the concept of externalities and local impacts of projects and investments. The Canada Growth Fund’s best investment decisions will take into account a project’s potential for generating positive externalities for Canadian society. For example, decision-makers should be able to answer the following questions to fully appreciate the project’s returns for Canadian society beyond financial considerations: 

  • Where on the learning curve does the technology sit and what is the potential for this project to achieve further cost reductions over time? 
  • How does the project benefit the local community, create employment and training opportunities, and contribute to regional economic development? 
  • How does the project contribute to achieving Canada’s emissions reduction targets? 

Coming back to the Australian CEFC, for example, investment decision-makers need some knowledge of electricity systems to be able to consider the implications of a specific project on reliability and security of electricity supply. 

  1. Defining transparent and differentiated accountabilities for PSP investment’s core business, the federal government, and the public will make the Canada Growth Fund more effective.

The Canada Growth Fund needs well-designed accountability mechanisms to carefully navigate its internal and external relationships.  

It is critical to keep the Canada Growth Fund distinct from PSP Investments because of its specific purpose, while keeping boundaries open enough to let the Fund benefit from its investment expertise. 

The relationship between the Fund and the federal government must avoid both interference in investment decisions on the side of the government and a lack of accountability on the side of the Fund. It’s a tricky balance to strike, and strong, explicit accountability structures can provide much-needed guardrails.  

When it comes to the relationship between the Canada Growth Fund and the public, transparency and proactive communication will be key. In the short term, publishing any Statement of Priorities and Accountabilities the Minister of Finance issues for the Fund would contribute to greater clarity and transparency. Moreover, by building functioning relationships with both PSP Investments and with the federal government, the Fund can support a foundation for trust with the broader public. 

Conclusion

Just like with any investment, making this arrangement work is about maximizing returns, while balancing risks. There is a sweet spot where the Canada Growth Fund capitalizes on the investment expertise and institutional strength of PSP Investments without losing focus on its specific purpose and the differences in expertise and decision-making required to be successful. 

The Canada Growth Fund has an ambitious mission and an important role to play in Canada’s clean growth policy strategy. Getting the institutional structures and accountability arrangements right will be central to making investment decisions that support Canada’s low-carbon future.  

Table 1: Key differences between Canada Growth Fund and PSP Investments

Canada Growth FundPSP Investments
Purpose“CGF will make investments that catalyze substantial private sector investment in Canadian businesses and projects to help transform and grow Canada’s economy at speed and scale on the path to net-zero.”

Support national economic and climate policy goals: 
Reduce emissions, accelerate deployment of low-carbon technologies, scale up clean growth companies, secure Canada’s future economic and environmental well-being (source)
“Manage amounts that are transferred to it in the best interests of the contributors and beneficiaries under the acts related to the Plans.” (source)
Investment objectives/strategy“To achieve its strategic objectives, CGF will use investment instruments that absorb certain risks in order to encourage private investment in low carbon projects, technologies, businesses, and supply chains. This includes investments that scale Canadian clean technology businesses.” (source)

“Its objective will be to deliver against its strategic objectives while recovering its capital on a portfolio basis and recycling its capital base over the long term.” (source)

“CGF will invest concessionally by accepting, where necessary, below-market returns relative to the risk it incurs.” (source)

Taking on risks is part of the investment strategy and will be necessary to achieve the Canada Growth Fund’s mandate.
“Invest its assets with a view to achieving a maximum rate of return, without undue risk of loss, having regard to the funding, policies and requirements of the Plans and the ability of the Plans to meet their financial obligations.” (source)

Committed to sustainable investment and ESG values, and action on climate change, commitment to investing contributing to global low carbon transition, Green Asset Taxonomy, increase investment in green and transition assets, reduce investment in carbon intensive assets
Accountability to whom?“Full accountability to the people of Canada” (source)“Responsibilities to contributors and beneficiaries” (source)

The power of Acimowin (Storytelling) for climate change policy

Tansi, Sandra Lamouche nitsikason, niya nehiyaw iskwew. Bigstone Cree Nation ochi niya. Hello, my name is Sandra Lamouche. I am from the Bigstone Cree Nation. 

This case study was inspired by my thesis research “Ê-Nihtohnak Miyo-Pimatisiwin (Seeking the Good Life) Through Indigenous Dance” and how individuals relate to and are guided by each direction of the nehiyawak (Plains Cree) medicine wheel. The wheel includes the four cardinal directions, four elements, and the four aspects of human beings—spiritual, physical, emotional, and mental (See image 1)—and is holistic, helping us to live a healthy and balanced way of life. It contains concentric circles with the individual in the centre and moves outwards to family and friends, then community, with the nation on the outermost circle. This is symbolic of how our individual actions influence our world and others. 

The spiritual aspect of culture and identity on the wheel, which is taught through story, is especially important as it teaches us about the possibility for change and transformation. It shows how we can change behaviour—both our own and collectively—to align with and embody the lessons and worldviews of traditional stories. I use a nehiyawak medicine wheel as a framework to understand a nehiyawak story to reveal the lessons it has for changing our behaviour in relation to climate action and the specific policy changes we push for from companies, governments, and our leaders. 

Indigenous stories can help us make effective and impactful progress because they are specific to the land we live on and “in order to do what the climate crisis demands of us, we have to find stories of a livable future, stories of popular power, stories that motivate people to do what it takes to make the world we need” (Solnit 2023).

Representation of the nehiyawak medicine wheel which includes the four cardinal directions, four elements, and the four aspects of human beings—spiritual, physical, emotional, and mental.
Image 1: The nehiyawak medicine wheel which includes the four cardinal directions, four elements, and the four aspects of human beings—spiritual, physical, emotional, and mental.

Racism as a barrier to Indigenous inclusion in climate change policy

Indigenous rights are being violated in Canadian climate change policy as the voices of Indigenous people are not yet fully included in climate change research. In some cases Indigenous perspectives, knowledge, and approaches to climate change are ignored (Reed et al. 2021) and this has reinforced colonial relations between Indigenous and non-Indigenous people. My own experience has taught me that there is a lack of knowledge and understanding about Indigenous cultures, which leads to them being devalued and dismissed. 

One reason Indigenous Peoples continue to be excluded from spaces where climate policies are designed and implemented, is that ongoing racism dismisses Indigenous knowledge and worldview in favour of western and Eurocentric knowledge and thought. As Charlotte Reading describes, “science has emerged as one of the most dangerous tools of colonial domination, as disciplines of science have created and maintained racial distinctions used to segregate and oppress Indigenous peoples” (Reading 2020). This dismissal has deep roots in colonial oppression which was based on the western worldview that Indigenous cultures and knowledge were “uncivilized”, “primitive”, or “inferior”. This view was reflected in residential school policies as the system was based on an assumption that European civilization and Christian religions were superior to Indigenous cultures (Truth and Reconciliation Commission of Canada 2017). Call to Action 57 from the Truth and Reconciliation Commission (TRC) of Canada’s recommendations shows anti-racism work is critical to transformational change: 

“We call upon federal, provincial, territorial, and municipal governments to provide education to public servants on the history of Aboriginal peoples, including the history and legacy of residential schools, the United Nations Declaration on the Rights of Indigenous Peoples, Treaties and Aboriginal rights, Indigenous law, and Aboriginal-Crown relations. This will require skills based training in intercultural competency, conflict resolution, human rights, and anti-racism” (Truth and Reconciliation Commission 2017).

Systemic racism severs Indigenous stories from place by prioritizing western worldview over Indigenous ways of knowing and being. It is therefore important to fulfil the Call to Action 57 in order to have Indigenous knowledge recognized for its valuable expertise and the ways in which it can inform direction and solutions to many different challenges our society faces, and especially issues of climate change. The TRC Commissioners also note that they repeatedly heard the message that reconciliation in Canada requires reconciliation with the earth (Truth and Reconciliation Commission of Canada 2017).     

The power of Indigenous story to change our behaviour and inform climate action 

Anti-Indigenous racism often leads to valuable knowledge and expertise from Indigenous people being left out of decisions and/or policies related to climate change that could make them stronger and more impactful (Reading 2020). Braiding Sweetgrass asks us to see Indigenous stories “not as an artifact of the past but as instructions for the future” (Kimmerer 2013). Jo-Ann Archibald talks about the importance of understanding Indigenous “storywork” (a term she coined) as it “signifies that our stories and storytelling should be taken seriously” (2008). For example, one of the problems with western approaches to climate change is that they focus on the symptoms rather than the root causes (Reed et al. 2021). Indigenous stories can help shift that approach as they are tied to Indigenous pedagogy and a more holistic worldview that recognizes the interconnectedness of the natural world. 

Often in nehiyawak thought we use the past as a guide for our future—a common saying is that you need to know where you’ve been in order to know where you are going (Bell 2006). In contrast to the western worldview, Indigenous stories also include valuable knowledge that instructs us to live in a sustainable, balanced way with the earth. 

To demonstrate and learn from the knowledge and expertise woven into Indigenous stories it is important to understand them through an Indigenous worldview, and the nehiyawak medicine wheel helps us do this. Nehiyawak stories speak to all aspects of the nehiyawak medicine wheel, as they carry wisdom (mental aspect in the northern direction of the wheel), explain the world (physical aspect in the southern direction), while also teach about relationships (emotional in the western direction), and our culture and identity (spiritual in the eastern direction). Using the holistic view learned from the nehiyawak medicine wheel helps us to understand and act on the teachings in the stories and, in the case of the story I chose, take action both individually and collectively in terms of environment and climate change adaptation and mitigation. 

This story, the Birds of Colour: Part 2 tells how Blue Jay got its colour. This is an oral story told by my father, Micheal Sidney Lamouche, from Kapawe’no First Nation and transcribed over a series of meetings. He has collected many stories from different friends and family that live in Cree communities across Northern Alberta and has given me permission to use this story for this case study. Stories about Wesakechak, the nehiyawak trickster, often teach us about our actions and consequences, values, and how things came to be. Many Indigenous peoples use oral storytelling to pass on knowledge, history, and culture. In my nehiyaw culture storytelling was saved for the winter. 

Photo credit: Ivan Sovic

The story of the Birds of Colour: Part 2 demonstrates the power of Indigenous storytelling and how it can inform actions to improve Two-Eyed Seeing in climate research and policy discussions with story as the vehicle to drive transformational change. As described by Albert Marshall: “Two-Eyed Seeing refers to learning to see from one eye with the strengths of Indigenous ways of knowing and from the other eye with the strengths of Western ways of knowing and to using both of these eyes together” (Bartlett et al. 2012).

Birds of Colour: Part 2

Wesakechak, hosted a contest to name the birds—the bird with the most beautiful colours would win. The birds found their colours from nature. One of the birds had difficulty choosing a colour. The bird flew around but could not decide since all of the colours were so beautiful and soon all the colours were taken. The bird went to Wesakechak and explained why he did not have a colour:

“It was love.” 

Wesakechak said, “Little brother, remember sometimes you only have one chance to get, or do, something next time to remember—that if you want something go and get it, or it may never come again. Sometimes we have thoughts or feelings that we want to do something good, but we don’t remember that those thoughts and feelings were put there by our spirit guide.”

Once the birds had gathered, there were many colours. Wesakechak decided not to choose a winner as they were all special and had a different role in nature. In trying to help the bird find a colour, he asked a sparkly white bird how he got his colour. He replied it was from trying to fly over the mountain and getting caught in an avalanche. Wesakechak said:

“There are all kinds of colourful flowers on the other side of the mountains.” 

The little bird was so excited it flew away, not waiting for Wesakechak to finish talking. As the bird flew towards the mountains it started to fly higher and when he was over the clouds, looked as far as he could see and only saw more mountains.”

The bird flew back towards the others, not realizing it had the colours of the sky—its chest was white and its back was blue. Wesakechak said it would be known as, 

“the bird that carries the sky on its back. You will also be known as the bird that didn’t wait for all the instructions. So you have to learn patience and listen to all the instructions” (Lamouche 2021).

The spark within: Igniting the spirit to take action on climate change

In the nehiyawak medicine wheel we start in the eastern direction, where the sun rises. This is also associated with the element of fire (sun), childhood, the beginning of the day, and the spiritual aspect, which includes culture and identity. Culture and identity is foundational to how we live our lives and to our behaviours, actions, and values. It is often taught through story which might become a spark of inspiration and motivation or a fire within, igniting a passion. In other words, culture and identity is our why: “Those of us who are Indian understand that it is the telling of stories, our very breath, that brings forth identity and defines purpose” (Lucci-Cooper 2003). This is an important part of learning, “…we learn best when we feel a strong, inner spiritual connection with everything around us” (Anderson 2017). For many Indigenous people culture and identity is directly connected to the land on which we live, “to know yourself you must first know the earth” (Cajete 2000).

The story of the Birds of Colour: Part 2 is also centred on identity, one aspect of spirit. We see the birds with their own agency—choosing different colours so that they can be given names and an identity. This is an important aspect of Indigenous teachings—to foster self-determination—which is a stronger motivator for change than being told what to do (Lamouche 2022). We can apply the lessons from the story that we have our own agency to make choices, to motivate us to take action and make change where it is most needed and right now that is in relation to climate change. To address climate impacts we need to make a conscious choice to change individual and collective behaviours to make a real and lasting difference in the world. We can do that by drawing on our own agency and the part of our identity (the spiritual aspect of the medicine wheel) that is connected to better “knowing the earth”—only then can we take effective action on climate, based on that deep knowledge, connection to the land, and our motivation. 

In many Indigenous cultures, language and connotation also matter in relation to identity. Indigenous stories often reference specific animals as non-human kin, by calling them simply by their name. For example, we will say “Blue Jay was flying” rather than “a blue jay was flying” which is what the western tradition would do. Another layer to this can be found in the way Blue Jay is at first referred to as “the bird” rather than “a bird”, further personifying him by giving him another layer of meaning and identification: In looking at the definition of “a” we can see that it is used before a singular noun, emphasizing the individual. By comparison “the” can be used for a singular noun but that noun should be understood generically (Miriam-Webster 2023). Rather than specifying an isolated individual animal, Indigenous storytellers’ preference emphasizes the whole, the group, or interconnectedness. This is an important spiritual understanding connected to nehiyawak identity and culture (the eastern part of the wheel). Embedded within how stories are told, even in English, we can see that the understanding of our relationships and fundamental interconnectedness with the animals, plants, and all of the natural world, are important in Indigenous worldviews. Including this deeper, fundamental understanding of the interconnectedness within the natural world—which we are a part of—in conversations about climate frameworks and policies could help guide their design and implementation so that their approach is more holistic.  

When we see the bird hesitate and say, “It is love,” Wesakechak responds by explaining that the “inner knowing” or having a “feeling” are our spirit guides. This highlights the deeper listening and body senses as knowledge that is used in Indigenous ways of knowing and Native science (Cajete 2000). In terms of climate change policy this might lead to new understandings of the environment and the need for a more holistic and balanced view of climate change and the environment. 

Embodiment, taking action, and transforming behaviour for climate action 

We move around the nehiyawak medicine wheel in a clockwise direction, often referred to as following the movement of the sun. This brings us to the southern direction which is associated with the physical, youth, and the element of earth. It is related to our fitness, our body, and the environment. The physical is about movement, action, embodiment, and transforming our lives through changed behaviour. 

In the story we see the importance of physical action when Wesakechak explains to the bird that sometimes we only get one chance to take action, highlighting the importance to sometimes act when we can. In relation to climate change we can think of this as a message to take action now—because now we have the chance, whereas in the future we may not. This also supports the idea of many Indigenous stories as “instructions for the future.” If we understand this story through this lens then we can clearly hear the message that taking action now is necessary in order to address climate change.

In this story different aspects of the environment—also part of the southern direction of the nehiyawak medicine wheel—are highlighted: the colours of birds, the sky, the plants and flowers, the images of the mountains, and the avalanche. We see the lesson of everything in nature having an important role and diversity of nature is emphasized. This can be seen as an instruction on how to be observant of the world around us, and that even if we don’t understand all the roles and meanings, to value all things in the natural world, including biodiversity. These teachings should be extended to climate policy to encourage decision makers to understand that we need to protect the biodiversity in the natural world, even if we don’t understand what part all beings and non-beings play in that world. A western approach often compartmentalizes in ways that are unhelpful—for example seeing biodiversity and climate issues as separate (Climate Atlas of Canada).  

The physical environment also becomes a reminder of our body’s (also part of the southern direction of the wheel) relationship to and reliance on the natural world. When we understand this, suddenly the need to protect the physical environment takes on greater urgency. We see that it is about protecting ourselves and, looking at it through the lens of the nehiyawak medicine wheel, our families, communities, and nations. This is a different perspective than in western science which often looks at the physical world and solutions through silos and from an economic perspective (Cajete 2000). This deeper understanding can help shift our behaviour and the approach we take to policies and solutions to protect that world. 

Connecting with the heart in order to care about climate

In the western direction on the nehiyawak medicine wheel is the stage of adulthood. It is characterized by responsibility, relationships, and emotional aspects. It is symbolized by the element of water, which is seen as healing: my Mom would say, our tears are healing, and the teachings also tell us this. Building relationships is an important aspect of nehiyawak wellness, worldviews, and knowledge. This is represented in the concentric circles of the nehiyawak medicine wheel. Unlike in western society, many Indigenous peoples do not see our lives as growing up in a linear, isolated, and individual way. Instead Indigenous cultures see lives as holistic and communal, fundamentally based on strong community relationships. This foundation also extends to developing respectful relationships with the natural world (Cajete 2000; Anderson 2017; Archibald 2008) a relationship that often differs from the one in a western worldview. It means that Indigenous Peoples have a different approach to caring for the environment and thus may have different ideas about effective solutions and actions related to climate change, an important factor in co-development of policy. 

This story of Blue Jay has another teaching for us. For example, in the story, the bird went to Wesakechak and explained why he didn’t have a colour as he sees all colours as beautiful. Wesakechak says he can not choose a winner because all the colours are beautiful. From the perspective of the story this leads to the question of what would happen if all of us “see colour” in terms of race as a beautiful thing and something that reflects the diversity of nature. This would create a more respectful relationship amongst different races and cultures, and more respect and inclusion of various knowledge and perspectives. In terms of anti-racism, colour blindness towards other races is considered a microaggression (Reading 2020). Respecting the differences of others helps us to have healthy relationships. The story teaches that diversity is a valuable part of nature and should be protected in climate change policy discussions and implementation.

The story explains how the physical features of the birds and their different colours come from the natural environment, flowers, plants, snow, and sky. This helps to highlight the birds as connected to nature and seeing a relationship between all things is an important reminder in the story as it teaches us to form a deeper connection to, and in turn, want to care for, all of creation. After hearing the story, now when you see Blue Jay, you think of the blue sky, air, mountains, and sunny days, creating a deeper connection to and understanding of how interconnected the natural world is. This deeper emotional connection creates and encourages a respectful relationship to the natural world, one that is deeper and more expansive than in western science. 

Photo credit: Sandra Lamouche

The wisdom of Elders to ensure stories continue in order to influence climate change 

The mental aspect on the nehiyawak medicine wheel is represented by the northern direction and the Elder stage of life. The mental aspect includes knowledge, wisdom, thoughts, and the element of air. Stories and teachings combined with experience give Elders a depth of layered knowledge that they carry with them and when Elders pass their knowledge on to children (east) they help the circle of the good life continue and carry on through the generations. At the end of Blue Jay’s story we hear the lesson of patience and listening to instructions before acting. In a larger context we can see that storytelling and teachings play an essential role in guiding our actions and behaviour. It can remind us to listen to our Elders and highlight the importance of the stories, wisdom, and experience that Elders carry and how that wisdom can guide our own actions. It highlights the importance of listening to Elders as “the first line of teachers, facilitators, and guides in learning Native science” (Cajete 2000).

For example, when Elders use phrases such as “beaver was swimming” instead of “a beaver was swimming” it could be misinterpreted as being less “educated” or not “proper” English, rather than thinking of the deeper meaning of these phrases as stemming from a deeper worldview.

By being patient and listening to and respecting the expertise and learnings (or instructions) from the Elders, we ensure that valuable wisdom is not missed. 

Seeing and knowing Blue Jay as the bird that carries the sky on its back changes the way we think. It reminds us of the story of the colours of birds and the teaching of patience, valuing all the different birds, listening to intuition, and taking action. These are teachings and reminders that can be valuable across a lifetime. As Elders share this wisdom they are ensuring the continued worldviews, instructions, and values that shape behaviours towards sustainability are passed on. The wisdom and experience of Elders can empower us and encourage us to think deeply about the world and move us to take action in terms of climate change and sustainability. 

Conclusion

Indigenous people have been marginalized and excluded from climate change policy even though “Indigenous lands make up around 20% of the Earth’s territory, containing 80% of the world’s remaining biodiversity—a sign Indigenous Peoples are the most effective stewards of the environment” (International Institute for Sustainable Development). Indigenous stories are connected to the land, and especially imbued with the values and worldviews that have sustained land, animals, plants, and people across Turtle Island (North America). The above examples of the deep and wide range of teachings in this single nehiyawak story show the vast amount of knowledge and expertise carried within Indigenous cultures and teachings, and how it can inform our approach to climate action and policy. These stories have been excluded and oppressed through colonization and European superiority rooted in racist ideology. This has been reinforced by western science and systems, including climate change conversations, and this exclusion means valuable lessons and perspectives are not being considered when climate actions and policies are implemented. 

As nehiyawak stories demonstrate, Indigenous stories have inherent knowledge and lessons in them that can help us approach climate action, particularly as they help us to understand the interconnectedness of the natural world and our relationships to the land. The story of Blue Jay promotes responsibility, self-determination, and listening carefully to the wisdom of Elders. It teaches us about our interconnectedness and of our direct relationship to the land. When we have a closer relationship, based on respect and understanding through the teachings that the land and all that is in it are kin, we approach climate action with a deeper caring and understanding of the best approaches for all. 

I have concluded with a list of policy recommendations for climate specialists in federal and provincial government to improve climate policy to be more holistic and understanding of Indigenous worldview including story, with the aim to advance reconciliation:

  • Climate policy should be led by Indigenous Peoples and Nations (Reed et al. 2021) at the provincial and federal levels—this might include equitable co-creation of climate policies.
  • Climate policy discourse should include storytellers, artists, spiritual Elders and cultural knowledge holders, as well as funding for them to share their work.
  • In order for policy makers to begin to understand Indigenous worldview and work in co-development of policy and research with Indigenous peoples, public servants should be provided with anti-Indigenous racism training (Truth and Reconciliation Commissions of Canada 2017).
  • Accessibility, protection, and generational transfer of the stories themselves through funding, programs for Indigenous artists and storytellers, as well as ensuring accessibility to the plants, animals, landmarks, cultural, and spiritual sites that carry these stories should be a policy priority.
  • Indigenous traditional stories, teachings, and knowledge should be respected, accepted, and included in climate policy discussions without having to validate with western scientific studies.
  • There should be funding for co-research between Indigenous and non-Indigenous climate researchers, artists, and storytellers. 
  • Funding to preserve and teach Indigenous languages should be provided, as they are necessary to understanding and interpreting stories as instructions for the future.
  • Federal and provincial governments and policy makers should work with Indigenous nations to include Indigenous governance models and ways of doing as a framework (i.e., medicine wheel) to ensure a holistic perspective that incorporates Two-Eyed Seeing approaches in co-development of climate policy.
  • An anti-Indigenous racism process should be applied to all sectors of Canadian society, especially policy decision makers at the provincial and federal level whose decisions impact Indigenous peoples and the land and waters in which our identity is inextricably connected to through story. 

References

Anderson, Comay, and Chiarotto. 2017. A Resource for Educators. The Importance of Indigenous Perspectives in Children’s Environmental Inquiry. Ottawa, ON. https://www.naturalcuriosity.ca/englishbook 

Archer, D. 2021. Anti-Racist Psychotherapy: Confronting Systemic Racism and Healing Racial Trauma. Montreal, QC. https://archertherapy.com/product/anti-racist-psychotherapy-confronting-systemic-racism-and-healing-racial-trauma/ 

Archibald, J. 2008.  Indigenous Storywork: Educating the Heart, Mind, Body and Spirit. Vancouver, BC. https://indigenousstorywork.com/ 

Bell, N. 2013. “Just do it: Anishinaabe Culture-Based Education.” University of British Columbia Dissertation 36(1).  https://ojs.library.ubc.ca/index.php/CJNE/article/view/196553 

Benton-Banai, E. 2010. The Mishomis Book: The Voice of the Ojibway. Minneapolis, MN. https://www.upress.umn.edu/book-division/books/the-mishomis-book 

Cajete, G. 2000.  Native Science: Natural Laws of Interdependence. Santa Fe, NM. https://tribalcollegejournal.org/native-science-natural-laws-interdependence/ 

Climate Atlas of Canada. 2022. Prairie Climate Centre. Winnipeg, MB. https://climateatlas.ca/ 

Ferguson, E. 2005. Einstein, Sacred Science, and Quantum Leaps: A Comparative Analysis of western Science, Native Science and Quantum Physics Paradigm. University of Lethbridge. Lethbridge, AB. https://opus.uleth.ca/server/api/core/bitstreams/5082b74d-2475-4cad-9a92-1c64fa47afe3/content 

Fontaine, F., Craft, A. 2016. A Knock on the Door: The Essential History of Residential Schools. Winnipeg, MB. https://uofmpress.ca/books/detail/a-knock-on-the-door  

International Institute for Sustainable Development. 2022. “Indigenous Peoples: Defending an Environment for All: Still Only One Earth: Lessons from 50 years of UN sustainable development policy.https://www.iisd.org/articles/deep-dive/indigenous-peoples-defending-environment-all#:~:text=There%20are%20approximately%20370%20million,effective%20stewards%20of%20the%20environment.

Kendi, I.X. 2019. How to be an Anit-Racist. New York, NY. https://www.penguinrandomhouse.com/books/564299/how-to-be-an-antiracist-by-ibram-x-kendi/ 

Lamouche, M. S. 2021. “Birds of Colour: Part 2.” Transcription of traditional oral stories.

Lamouche, S.F. 2003. Ê-nitonahk Miyo-Pimatisiwin (Seeking the Good Life) Through Indigenous Dance. Peterborough, ON. https://digitalcollections.trentu.ca/objects/etd-1045 

Lucci- Cooper, K. 2003.To Carry the Fire Home.” Genocide of the Mind: New Native American Writing. New York, NY. https://iucat.iu.edu/iuk/5642365 

Miriam-Webster. 2023. Dictionary. Springfield, MA.https://www.merriam-webster.com/ 

Mohammed, J., Anderson, P., Matthews, V. 2022. “Indigenous Peoples across the Globe are Uniquely Equipped to deal with the Climate Crisis – So why are we being left out of these conversations?” United Nations Office for Disaster Risk Reduction. https://www.preventionweb.net/news/indigenous-peoples-across-globe-are-uniquely-equipped-deal-climate-crisis-so-why-are-we-being 

Murphy, J. 2007. The People Have Never Stopped Dancing: Native American Modern Dance Histories. Minneapolis, MN. https://www.upress.umn.edu/book-division/books/the-people-have-never-stopped-dancing 

Pelletier, C. 2018. “An Application of Two-Eyed Seeing: Indigenous Research Methods with Participatory Action Research.” International Journal of Qualitative Methods 17.  https://journals.sagepub.com/doi/pdf/10.1177/1609406918812346 

Reading, C. 2020. Social Determinants of Health: Understanding Racism. Prince George, BC. https://www.nccih.ca/docs/determinants/FS-Racism1-Understanding-Racism-EN.pdf 

Reed, G., Gobby, J., Sinclair, R., Ivey, R., Matthews, D. 2021. Indigenizing Climate Policy in Canada: A Critical Examination of the Pan-Canadian Framework and the ZéN RoadMap, 12(3). https://www.frontiersin.org/articles/10.3389/frsc.2021.644675/full 

Solnit, R. 2023. If you win the popular imagination, you change the game: Why we need new stories on climate. The Guardian. https://www.theguardian.com/news/2023/jan/12/rebecca-solnit-climate-crisis-popular-imagination-why-we-need-new-stories 

Wall Kimmerer, R. 2013. Braiding Sweetgrass: Indigenous Wisdom, Scientific Knowledge, and the Teachings of Plants. Minneapolis, MN. https://milkweed.org/book/braiding-sweetgrass

Hope flows from action: Rebuilding with resilient foundations in B.C.’s Fraser Canyon Region

Foundations

The Fraser Canyon region is the heartland of an Indigenous nation known as the Nlaka’pamux, and the town of Lytton is at the geographical centre of the Nation. In 2021, a spring and early summer drought was a precursor to a Pacific Northwest heat dome which resulted in a recorded high of 49.6° C on June 29 and the next day, Lytton burned to the ground in 21 minutes (BBC News 2021). Five months later, a regional atmospheric river wiped out all but one access road and, in December, extreme cold and deep snow paralyzed the region. While these 2021 events were unprecedented, they were not unexpected: worldwide warnings about climate impacts have been growing since the 1980s, and it  is now evident that humanity is moving out of  “just-right-for-life conditions”, experiencing temporary spikes of extreme weather which could become permanent with significant consequences for human health and well-being (McMichael et al. 2017). 

The Lytton fire also showed that Canada exists on fragile foundations. Yesterday’s settler governments (Karl 2005) made decisions based on a “get-it-done” approach, resulting in buildings, systems, and economies that worked, but were neither sustainable nor resilient. Canada was also built over the lives, lifestyles, and objections of Indigenous populations with little regard for the adverse impacts on the environment and future generations. Previous settler government decisions were justified by a few on the premise of efficiency and pursuit of profit. Today’s governments must resolve these past wrong-doings and take a different decision-making approach for our collective tomorrow, one that is not based on “get-it-done” but on protecting people and communities, with the knowledge that climate change is real and its impacts are growing in frequency, duration, and intensity. 

Governments must also address historical issues created by previous decision-makers who ignored, avoided, or off-loaded issues onto future generations. This risk remains as current governments may perpetuate a status quo mindset, not recognizing that climate impacts are real and increasingly severe or not taking action quickly enough to protect people and communities. If we do not overcome our collective paralysis on addressing climate impacts (Rand 2014) adaptation planning will be delayed until it’s too late, and we are caught in debilitating response mode. Simply put, we want to avoid doing nothing today, taking our chances, and letting tomorrow bear the brunt of impact. No one is immune from climate change’s growing impacts and when we make a conscious decision to make the environment the priority, we all benefit and, more importantly, so do our children and grandchildren.

Tina and Patrick Michell’s first visit back to their home in Lytton, B.C. on July 25, 2021. Photo credit: Patrick Michell

The Fraser Canyon region’s recovery from the devastating events of 2021 is slow and not without controversy (Partlow 2022). There is a tension between building back quickly and building back better. The recovery is also constrained by a real-time process of rectifying past state decisions, decisions that off-loaded the responsibility of creating sustainable communities onto the next generation (Olsen 2023).

Integral to the recovery will be a renewed understanding of the role and functions of the physiological foundations needed for quality of life—clean air, water, food, and shelter—which must be satisfied before other needs can be met (McLeod 2018), and, more importantly, to get right in the recovery what was not done right the first time. 

There are other layers to the recovery process that are sometimes not considered. Having experienced compounding trauma, residents of the region will need to overcome individual fear, anger, and sadness, which, despite the passage of time, continues to overwhelm and undermine recovery. Secondly, they will need to work together on the common goal, which is to conceptualise, design, fund, and build a community that is resilient to the weather of today and tomorrow, allowing the core needs of residents to be met even in a future that will be destabilized by further climate events. 

While this paper focuses on the experience in Lytton, this is not only a Lytton problem. Across Canada, there are 62,000 communities at the same risk level as Lytton was in 2021 (Cohen and Westhaver 2022). The Lytton recovery story is thus important for all Canadians. 

However, having experienced multiple extreme weather events in a very short time frame (Michell 2021), inhabitants are uniquely positioned to become one of Canada’s first resilient regions. And, if Canada’s First People are part of all conversations pertaining to land and resource use (United Nations General Assembly 2007), it will help overcome learned and reinforced behaviour and avoid the mistakes of the past. First Peoples can inform decision-making approaches so that they are focused on taking action to invest in our collective foundations and ensure that all Canadians can weather the coming storms (River Voices 2020). As early as 2010, Kanaka Bar Indian Band, one of the 15 communities that make up the Nlaka’pamux Nation, set aside intergenerational anger and resentments that had accumulated since colonization and set the community toward a new and more resilient future (Michell 2010). In 2015, the Indigenous community codified a vision statement as: “Kanaka Bar is committed to using its lands and resources to maintain a self-sufficient, sustainable and vibrant community” (Kanaka Bar Indian Band 2015), which was followed shortly by the community’s climate change impacts assessment and transition plan. What follows are insights into the decisions and actions Kanaka Bar has taken to build community resilience into the four physiological foundations—clean air, water, food, shelter, so they are prepared for the weather of tomorrow, actions that can be replicated and scaled-up in communities across the country.

Knowing the weather

For the Nlaka’pamux, living in the same place for more than 8,000 years generated a collective conscious knowledge or knowing of local and regional weather, seasonal patterns, and ecosystem cycles. In the 1980s, residents of the Fraser Canyon observed changes on the ground inconsistent with this knowing, and by 1992 a label was applied by climate scientists—anthropogenic climate change. The world’s air, land, and water are retaining heat at an unprecedented rate, producing supercharged or extreme weather events that are overwhelming thousands of years of Indigenous knowing and post-colonial infrastructure and systems that were designed for the weather patterns of yesterday. Ecosystem shifts and collapses are occurring on the ground (Chambers et al. 2021), which makes living today, and preparing for tomorrow, very uncertain. When people don’t know, they worry. Stress and anxiety created by climate change fear and impacts has been accepted globally by health officials and mental health diagnoses for climate anxiety, eco-anxiety and solastalgia1 are now on the rise.

To alleviate stress caused by uncertainty about the future impacts of climate change, the Kanaka Bar Indian Band, located 18 kilometres south of Lytton, completed a 2015 community watershed Land Use Plan (Kanaka Bar Indian Band 2015) and a 2018 Climate Change Assessment and Transition Plan (Kanaka Bar Climate Change Assessment and Transition Plan 2018) and has since invested in three weather stations, seven water gauging stations and an air quality monitor. These tools generate daily site-specific community data for air quality, wind speed and direction, temperature, precipitation, and water quantity. They complement rather than replace Indigenous knowing and assist with community forecasting, early warning systems, emergency preparedness, and response planning.

Site-specific weather monitoring helps improve warning and response plans, providing communities with as much lead time as possible to prepare for extreme weather events, so they can plan for any spikes in extreme heat, wind, rain, and cold and recover more quickly. It allows communities to know with more specificity and warning about when physiological needs are not going to be met—when their health and safety may be at risk from unsafe air, water, heat, and a risk to their shelters. Site-specific data also informs the design and building of new infrastructure or for retrofitting existing infrastructure so it is resilient to the weather in a particular region. The more weather and climate information that communities have, the better warning and response plans they will have and the safer residents will be. 

     Recommendation: 

  • All orders of government (including Indigenous, federal, provincial, territorial, municipal) should implement policies that support the pooling of resources and the sharing of information, and coordination across different orders of government should be designed and implemented to enable communities to understand regional and site-specific risks, and collectively source and install more site-specific air, wind, temperature, and precipitation stations to generate regional weather data. 

Water security

Within the Fraser Canyon region, surface water streams are drying up and regional dry spells are lasting longer while demand remains consistent. Inhabitants with surface water licenses are now facing repeat “low water” and “no water” scenarios. In 2021, ground water wells were running out of water as well and while no zero days occurred—it may be coming soon. 

Lytton was originally built with surface water drawn from Lytton Creek and for years has had to supplement surface supply with water pumps (from wells and from the Thompson River). When the Lytton fire ended the region’s electric supply the town and region was without water as the ability to divert, store, and generate potable water was lost. 

The Fraser Canyon region is looking at a regional plan to share information and water infrastructure so that the water crisis of 2021 is not replicated.

The issue for those in the Fraser Canyon region is not water quantity given the 2021 drought and subsequent atmospheric river events (which unloaded too much precipitation all at once). The issue is planning and building new water storage that is reliable and sustainable even in the face of extreme weather events.

Nlaka’pamux communities have and continue to exist where stable and predictable sun, wind, water, and seasons have been observed to produce healthy ecosystems. Proximity to year-round fresh water sources for ecosystem health, drinking, cooking, animal husbandry, irrigation, and fire protection was where Indigenous people chose to live—thus the saying “water is life.” Nlaka’pamux life changed through contact with European explorers, and when an initial period of Indigenous-explorer mutual relations ended (Manuel and Posluns 1974), it was replaced by colonial law and policy based on denial and oppressions that existed for generations.

Once established, colonial and provincial states oversaw the allocation of fee simple land parcels (private property) to newcomers, which included water licenses which are “first in line-first in right” for purposes like drinking, irrigation, and economic benefit, with little or no thought to the original inhabitants or the ecosystems that had relied on the water for millennia. Inherent title and rights to nation lands and water were disregarded and, since federal reserve allocations came after Confederation, Indian Act reserve lands and water licenses (if available) were small, in bad locations, and not suitable for housing and agriculture. The result was most Nlaka’pamux communities were displaced and relegated to living in very poor conditions, and forced to be in response-mode to colonialism and live with the impacts of these conditions for generations. 

As part of their plan, and to fulfill their vision statement, Kanaka Bar took steps to address these wrongs and to secure for their community one of the most important physiological foundations: Water. With forecasted changes in both weather and precipitation and seeing actual change occur, Kanaka Bar made investments in water gauging stations on seven surface streams within the traditional territory. With site-specific quantity and flow data received to date, Kanaka designed and built new intakes, storage, and delivery systems which can handle “too much” water scenarios and store water for timed release during winter and summer drought conditions. 

Kanaka Bar’s water system is gravity-fed so water can flow during power outages. Kanaka also invested in small-scale solar, wind, and some hydro renewable electricity generation so, if needed, it can shift the energy source for the existing potable treatment plant so it can be kept running during a power failure.

Photo credit: Kanaka Bar Indian Band

Kanaka has also doubled its surface water storage based on current and short-term need forecasts and has created plans for quadrupling storage should demand increase. Finally, Kanaka has separated potable water storage and delivery systems from raw water (purple hydrants and taps) so that an ample supply of non-treated water is available for irrigation and fire protection. All the above has addressed the community’s short and medium long-term water needs and, perhaps more importantly, alleviated current eco-anxiety by giving present day and future generations knowledge that regardless of the weather, they will have a sustainable water supply, which is one of the most important physiological foundations.

To have a meaningful, realistic, and achievable climate change transition and adaptation plan requires water and while you can’t control the weather, you can mitigate its impacts. To learn from Kanaka Bar’s example, communities should consider the following when building a sustainable water security plan: 

  • Assumptions: Don’t take personal, community, or regional water security for granted. Communities should understand where their water source is and plan for scarcity.  
  • Relevant: Understand water licenses. When were they issued? Are they still applicable today? Is there still water to draw on? What are reasonable alternatives to accessing water if your supply stops?
  • Quantity: Install water quantity gauging stations on surface and groundwater and get the empirical data to help forecast water scarcity and possible zero days (i.e. when there is no supply).
  • Collaborate: Meet with regional “water boards” to discuss and plan for water certainty including storage, conservation, timed release, and delivery of potable water in case system failure has occurred. Share knowledge, resources, and plans to minimize shortage and expedite recovery. 
  • Resilient: Design, build, or retrofit physical infrastructure for the weather of today and tomorrow so that an atmospheric river or a wildfire doesn’t bring an end to the water supply. 
  • Hybrid systems: Examine potable water treatment options that are not dependent on the grid to work and separate out raw water from the potable water systems. 

These approaches can also inform policy design and have broad implications for all Canadians and orders of government.

Food security

The Lytton fire exemplifies food fragility and security concerns. Stores were lost in the fire, roads were closed, and an extended electricity outage resulted in families, whose homes had survived the fire, losing their fridge and frozen foods. The families who had either dehydrated or canned their foods, and whose  cellar and basement storage survived the fire, were okay as their food supply was not impacted by the extended electricity outage. Food donation centres were set up, but adequate supply, diversity, and quality varied with the donation. For those who can afford to travel, going to and from the urban stores has become an expensive new norm.  

For more that 8,000 years, the Fraser Canyon’s climate and resulting ecosystems supplied the original inhabitants with access to fresh meats, fruits, vegetables, fish, medicines, tools, and clothing, and a language, culture, laws, and art form developed. Protocols for food harvesting, preparation, storage, and ceremony were well known and surplus was used for trade. 

Colonial policy codified prohibitions on Indigenous people from accessing their traditional territory and practising their old ways, including the sale or barter of food to others (Karl 2005). These prohibitions created generations of suffering and established dependency on the state. To make matters worse, while colonial law prohibited slavery, the many generations who were forcibly removed from their families to attend residential school, were often required to toil in the fields. Concurrent to this, federal policies like the peasant farm policy in the prairies regulated agricultural production on reserve (Carter 1990). Conversations with community show that terms like farming and agriculture now carry a stigma among some Indigenous people because of these historical wrong-doings. Now that the archaic and draconian restrictions have been lifted, Indigenous people are returning to their territories where they are observing traditional foods suffering from air, soil, and water contamination, as well as heat, drought, and over-exploitation. Ecosystem shifts are now occurring in the Fraser Canyon region including the decline of the Fraser River’s wild salmon species (Chambers and Hocking 2021) and traditional field crops are struggling from drought and too much heat. Unfortunately, a shift to community or home-based gardens that could support greater food security has not yet occurred on the scale it needs to and as a result dependency on others for our food continues and will worsen as extreme weather events and impacts increase in frequency, duration, and intensity.  

In 2016, Kanaka Bar did a community food assessment, and a significant finding was that there has been a shift away from community-based food systems in favour of reliance on third-party supplies and suppliers (Berezan 2016). With knowledge that today’s stores carry at most a three-day supply of essentials (when supplies are available) and when roads are closed shelves go empty, Kanaka has invested in a range of food security initiatives including controlled environment agriculture which allows the community to grow fruit and vegetables year-round regardless of the weather. 

Aerial view of the Kanaka Bar community garden. Photo credit: Kanaka Bar Indian Band

Kanaka has also cleared and serviced vacant lands in preparation for community “aquaculture” or the raising of fish proteins in lieu of depleting wild salmon stocks. Kanaka has also secured ownership of off-reserve land from farmers and owners who no longer work their properties to raise proteins that are not water intensive and don’t require a lot of feed such as rabbits, pork, poultry (all types), goats, and, in the future, fallow deer. By taking these steps, Kanaka has made significant progress on ending dependency on the grocery store. Kanaka’s surplus meats, fruits, and vegetables are also available to the region at the new community centre, which is grid-connected but also powered by solar with significant battery storage.

Canadian society is based on importing the things we need rather than producing or manufacturing them ourselves. This puts food—one of the physiological foundations—at risk. It is also learned behaviour which can be quickly reversed, as demonstrated by Kanaka Bar’s approach. Governments can change their focus from growing the economy and GDP to stabilizing them through rural and regional strategic investments in resilient, effective, and efficient growing, processing, storage and delivery food security systems. The goal is that communities can make sure their food is secure, even in the face of extreme weather events.2 

Some initial food security planning steps that all orders of governments should undertake together include:

  • Economic Leakage: complete a food economic leakage study to determine where our food is coming from, consider want versus need, and assess impacts of extreme weather on supply and costs. Understand what we need to live, and then produce it here!
  • Food Sovereignty: support regional food production, processing, and storage through incentives and direct financial support. Create regional food security so that there is always an adequate close source of quality foods so that people never have to go without.
  • Land Bank: secure unused arable land from owners who are unable or unwilling to work their land and then lease out at very low rates to farmers or hire workers (local or from other countries) to grow the food we need. 
  • Food sovereignty, security, and resilience: Rebrand farming and agriculture as a national and province-wide food security issue and promote a resilient food plan. We have the land and resources to generate more than we can eat and thus be in a position to export our surplus but we need to ensure we have the food we need to eat before we put the economy at the forefront. 
  • Food hubs: Make strategic investments in regional storefront and warehousing of fresh and processed food so a ready supply of food and water is available for residents experiencing an extreme weather event or are in recovery from an event. 

Shelter security

The municipality of Lytton lost all its buildings in just over 20 minutes to the fire, and they must rebuild an entire community. The question is will they rebuild it in a way that is resilient to the weather of today and tomorrow.

Nlaka’pamux architecture and engineering for roads, bridges, ditches, boats, energy, and shelter existed for generations before contact as first observed by initial European explorers to the region (Lamb 1960). With colonization and confederation, Nlaka’pamux were required to leave their original places of occupation to live year-round on reserve lands in stick and frame homes built above ground. These homes never met any standards other than the most basic and are not suitable for today’s extreme weather events. Now the Nlaka’pamux, like everyone else, must find a way to design and build shelters that are affordable, resilient (to heat, wind, rain, and cold), energy efficient, and constructable. Kanaka Bar recognized the challenges post-contact policy had on housing, and for years worked to renovate and retrofit deficient existing structures. Today, all new builds in Kanaka Bar are based on passive design and have high-energy efficiency requirements. Kanaka Bar’s own “building code” requirements are that design and construction meet the highest efficiency standards and that owners’ representatives are on site during construction so they can ensure that the work meets community requirements. Kanaka Bar is building durable assets for their children and grandchildren—assets that are resilient to climate change. They are not interested in building assets for flipping later for a capital gain.

In addition, a new subdivision currently under construction called the Crossing Place is grid-connected but will have its own power generation and battery storage, so future residents’ lights, heating, cooling, and air circulation systems will work when the grid goes down. In May of 2022, Kanaka Bar met with new suppliers who shared information on building materials that met the community’s criteria for ensuring new infrastructure would be resilient to extreme weather events (River Voices 2022). 

The passage of time has not been easy on Lytton’s displaced residents, but they understand they have a second chance and, with appropriate government support, can build back better. First, the town was built over the Indigenous village of Tl’kemstin and the Lytton fire gave the residents an opportunity to do something that was not done previously—complete archaeological works to locate artifacts and develop mitigation plans for the rebuild which will minimize future impacts on undisturbed sites. Secondly, following a first-of-its-kind report (GHD 2021), each property has been cleaned and owners given a site clearance certificate confirming that the soils were inspected and lands cleared of all historical contamination and any toxins released in the June 30, 2021 fire. A builders’ charrette was held in April 2023 and a building symposium in May 2023 to discuss the best steps forward for rebuilding. The first build has yet to be determined and the community now has the options and must make the choice: to not build back the same structures and systems that were lost or following the example of Kanaka, build back so that new infrastructure will be resilient to the impacts of climate change. 

Photo credit: Kanaka Bar Indian Band

Some steps for all orders of government to consider to ensure shelter is resilient to climate impacts: 

  • Building bylaws and codes review: Building codes, bylaws, and infrastructure policy must take into consideration the site-specific forecasted weather of tomorrow to be climate resilient. Further, insurance providers should take into consideration accommodating these adjustments so that rebuilds after a disaster are resilient or resistant to fire, heat, wind, rain, and cold.
  • Government housing: governments should consider taking back land from owners, corporations, and speculators who are sitting on land “as an investment” to build safe and resilient social housing for vulnerable populations that are more at risk from climate impacts because of a lack of access to appropriate shelter.
  • Pilot build: the Fraser Canyon region has abandoned, underutilized lands available for government use and Lytton itself will have multiple shovel ready serviced lots that can be used for builds that showcase different building options, envelopes, and systems that are more resilient to climate impacts. 
  • Land back: if there is no business case to justify private builds or federal, provincial, or governments are unable or unwilling to acquire or build the homes that are needed, give Indigenous people fee simple lands to develop inclusive, sustainable, and resilient rental housing.

There is still time and hope

For thousands of years, Indigenous communities thrived based on a symbiotic relationship with the land3, and when an Indigenous community thrives, so does a region.

It was the actions of a few that created the conditions we are facing today and it is the actions of all of us today that will determine our collective future.

This will require leadership and there is hope—Indigenous Peoples survived contact and ongoing colonization and today, because of the United Nations Declaration of the Rights of Indigenous People, Canada’s Truth and Reconciliation Commission’s recommendations and movements like Idle no More putting on public pressure, Canadian governments have moved from avoidance to a position of reconciliation based on new relationships and meaningful collaboration (Union of British Columbia Indian Chiefs and Canadian Centre for Policy Alternatives 2018). 

The logic is inescapable that the current pattern of temporary extreme weather spikes of too much heat, wind, rain, or cold will continue in greater frequency, duration, and intensity. Although our governments understand extreme weather risks, the financial cost of delaying, and the urgent need to adapt to and mitigate the impacts of climate change, sometimes actions are not taken quickly enough (Sawyer, Dave, Ness, Ryan, Lee, Caroline, and Miller, Sarah 2022). Canadians can overcome learned and reinforced behaviour through awareness and action—there is no more time for denial, hypocrisy, apathy, and complacency. The Fraser Canyon story and regional recovery and rebuild exemplifies the risk of waiting too long to prepare for worst-case scenarios. 

On the ground at Lytton, once the now identified contamination risks are alleviated and the archaeological sites are reclaimed and protected, the rebuilding of the B.C. town lost in a day will proceed—with the right government policies, resources, funding, and perseverance—based on a renewed appreciation for the need to protect the four physiological foundations of life: clean air, water, food, shelter. The rebuild, done properly, should provide the Fraser Canyon residents with safety, affordability, and resiliency that enables them to thrive and maintain a high quality of life, regardless of today or tomorrow’s weather. 

Our decision makers need to move away from the now outdated colonial principles and approaches that put the economy above everything and understand that the physiological foundations must be the priority for decision making. This is an opportunity not only for Lytton but for the country and the community of Kanaka Bar shows that it is possible. Climate change transition and adaptation is not a cost, it’s an investment in our collective foundations to ensure that all Canadians can weather the coming storms. 

Hope flows from action: Our children and grandchildren are worth it.

References

Albrecht G., Sartore G.M., Connor L., Higginbotham N., Freeman S., Kelly B., Stain H., Tonna A., Pollard G. 2007. “Solastalgia: the distress caused by environmental change”. Australia’s Psychiatry. 2007;15 Suppl 1:S95-8. DOI: 10.1080/10398560701701288. PMID: 18027145. 

BBC News. 2021. “The Canadian Town that Burnt Down in a Day” [Video], YouTube. https://www.youtube.com/watch?v=8mgpcVwGsNA (Accessed December 18, 2022).

Berezan, Ron. 2016. Fostering Food Security and Food Sovereignty for Kanaka Bar. https://www.kanakabarband.ca/files/fostering-food-security-published-may-2016.pdf

British Columbia Government News. 2023. “Historic Investment in Food Security Supports British Columbians”. https://news.gov.bc.ca/ministries/agriculture-and-food 

Carter, Sarah. 1990. Lost Harvests. McGill-Queen’s University Press.

Chambers, K., D. Stanyer, and M. Hocking. 2021. “State of the Fraser River at Kanaka Bar”. Ecofish Research Ltd. https://www.kanakabarband.ca/files/ecofish-2021-07-12-2.pdf  

Cohen, Jack D. and Alan Westhaver. 2022. “An examination of the Lytton, British Columbia wildland -urban fire destruction.” https://firesmartbc.ca/wp-content/uploads/2022/05/An-examination-of-the-Lytton-BC-wildland-urban-fire-destruction.pdf

GHD. 2021. “Summary of Results and Safe Work Considerations: Bulk Material Sampling and Air Monitoring, Lytton Wildfire Response Lytton, British Columbia- Emergency Management British Columbia.”. https://lytton.ca/wp-content/uploads/2021/09/Summary-of-Results-and-Safe-Work-Consideration.pdf  

Kanaka Bar Indian Band. 2015. Kanaka Bar Indian Band: Land Use Plan. https://www.kanakabarband.ca/files/land-use-plan-march-31-2015-pdf-2.pdf 

Kanaka Bar Indian Band. 2018. Kanaka Bar Indian Band: Climate Change Vulnerability Assessment. https://www.kanakabarband.ca/downloads/climate-change-vulnerability-assessment-pdf-2.pdf   

Karl, Preuss. 2005. “Review of Making Native Space: Colonialism, Resistance, and Reserves in British Columbia, by C. Harris”. American Indian Quarterly, 29 (3-4), 709–713. http://www.jstor.org/stable/4138999 

Lamb, William Kaye. 1960. “The Letters and Journals of Simon Fraser 1806–1808.”  Toronto: Pioneer Books, The MacMillan Company of Canada Limited. 

Manuel, George, and Posluns, Michael. 1974. “The Fourth World: An Indian Reality”. Minneapolis: University of Minnesota Press, 17.

McLeod, Saul A. 2018. “Maslow’s Hierarchy of Needs”. Simply Psychology. https://www.simplypsychology.org/maslow.html

McMichael, Anthony J., Alistair Woodward and Cameron Muir. 2017. “Climate Change and the Health of Nations”. Oxford University Press. 

Michell, Patrick. 2010. “Memory, Loss and Sorrow…”. https://www.kanakabarband.ca/files/memory-loss-and-sorrow-written-first-in-2010.pdf

Michell, Patrick. 2021. “Climate Change and Extreme Weather Events: Opportunities and Challenges for Sustainability – Kanaka Bar Indian Band and Resiliency” [Presentation]. https://www.kanakabarband.ca/files/climate-change-and-extreme-weather-events.pdf 

Olsen, Tyler. 2023. “How the Lytton Rebuilt Went Wrong”. Fraser Valley Current. https://fvcurrent.com/p/lytton-rebuild

Partlow, Josh. 2022. “A Village Destroyed by Fire Vowed to Rebuild the Right Way. Then the Fight Begins”. The Washington Post. https://www.washingtonpost.com/climate-environment/2022/12/15/lytton-fire-canada-climate-change/ 

Rand, Tom. 2014. Waking the Frog: Solutions for Our Climate Paralysis. Toronto: ECW Press.

River Voices. 2022. “Resilient Housing Solutions – Kanaka Bar Band” [Video], YouTube. https://www.youtube.com/watch?v=4H7fJNeGwCc&t=1s (Accessed March 11, 2023)

River Voices. 2020. “For the Next Thousand Years! Kanaka Bar’s Vision for a Sustainable Future” [Video], YouTube. https://www.youtube.com/watch?v=6md2Ld5lChw (Accessed March 11, 2023).

Sawyer, Dave, Ness, Ryan, Lee, Caroline, and Miller, Sarah. 2022. “Damage Control: Reducing the costs of climate impacts in Canada”. Canadian Climate Institute.https://climateinstitute.ca/wp-content/uploads/2022/09/Damage-Control_-EN_0927.pdf 

Tattrie, Jon. 2020. “British Columbia and Confederation”. The Canadian Encyclopedia. Historica Canada. https://www.thecanadianencyclopedia.ca/en/article/british-columbia-and-confederation 

Union of British Columbia Indian Chiefs and Canadian Centre for Policy Alternatives. 2018. True, Lasting Reconciliation: Implementing the United Nations Declaration on the Rights of Indigenous Peoples in British Columbia Law, Policy and Practices.  https://d3n8a8pro7vhmx.cloudfront.net/ubcic/pages/3894/attachments/original/1543299014/UBCIC_CCPA-BC_TrueLastingReconciliation_full.pdf?1543299014 

United Nations General Assembly. 2007. United Nations Declaration of the Rights of Indigenous Peoples. https://www.un.org/development/desa/indigenouspeoples/wp-content/uploads/sites/19/2018/11/UNDRIP_E_web.pdf 


1 Solastalgia is, “the distress that is produced by environmental change impacting on people while they are directly connected to their home environment.” 

2 March 2023 announcements by the B.C. and Canadian government show they understand the priority of making investments in food sovereignty and security to keep food on the table regardless of the weather.

3 For the Nlaka’pamux, there is a saying, what you do to the land, you do to yourselves so take care of the land and it will take care of you.

Community is the solution

Introduction

How did the 2021 extreme heat emergency affect Indigenous peoples in British Columbia? Mainstream colonial academic and policy discourse in Canada often presents a disadvantaged and vulnerable perspective of Indigenous Peoples’ experience. For example, several factors described in the literature present a compounding risk for Indigenous Peoples when it comes to extreme heat:

  • Housing standards and overcrowding within homes is a central safety factor when it comes to extreme heat: according to the 2021 federal census, one in six Indigenous people lived in a home in need of major repairs (almost three times higher than for non-Indigenous), and more than 17 per cent of Indigenous people lived in crowded housing (Statistics Canada 2021).
  • Indigenous Peoples in Canada are disproportionately affected by the negative impacts of climate change, emergencies, and disasters (e.g., people living on First Nations reserves in Canada are 18 times more likely to be evacuated due to disasters) (Government of Canada 2019).
  • Indigenous Peoples are also at significantly higher risk of developing chronic disease than non-Indigenous people (Hahmann and Kumar 2022). Certain medical conditions such as cardiovascular disease, hypertension, lung disease, and diabetes affect the body’s thermoregulation and increase susceptibility to extreme heat (BCCS 2022). 

Despite these risk factors, the BC Coroners Service investigations into the B.C. heat wave that occurred in June 2021, found that a “disproportionately low number of Indigenous People died during the extreme heat event.” The report suggests that this may have been because of under reporting due to data collection processes and makes a recommendation for consultation with Indigenous Peoples “to ensure their voices are heard and their needs around heat planning understood” (BCCS 2022). This case study aims to address this gap through meaningful collaboration with Indigenous Peoples.

Methodology

Led by Preparing Our Home, an Indigenous-led network for disaster risk and resilience, this project documents the 2021 heat wave experiences and the subsequent cumulative impact extreme heat is having in five B.C. First Nations. Four sharing circles were conducted, supplemented with five in-depth interviews with community resilience leaders. Participants decided whether to be identified by their name or nation only. The questions were co-developed to ensure that participants’ priorities were reflected. This relational approach empowered nation-to-nation learning and a focus on solutions. 

We focused on the experiences with heat in five on-reserve First Nation communities, their lessons learned (in relation to climate change), and, drawing on those lessons, made policy recommendations to create resilience to future extreme heat events:

  1. Urban: The Tsleil-Waututh Nation, People of the Inlet, are Coast Salish Peoples whose territory includes the Burrard Inlet and the waters draining into it and North Vancouver, where the community has a current population of 600+ people. 
  1. Rurally located Nations in the Interior:
    • Originally known as T’eqt”aqtn (the crossing place), Kanaka Bar Indian Band is one of 15 Indigenous communities that make up the Nlaka’pamux Nation. For more than 7,000 years, Kanaka’s traditional territory has sustained its people and today the community is home to between 70-140 residents (Kanaka Bar Indian Band 2022).  
    • The Líl̓wat Nation’s Territory includes 791,131 hectares of land that occupies a transition zone from temperate coastal environment to the drier interior of B.C. The majority of  Líľwat7úl citizens live near Mount Currie which is home to the majority of the 2,200+ members (Líl̓wat Nation 2022). 
    • The Adams Lake Indian Band belongs to the Secwépemc Nation and is a member of the Shuswap Nation Tribal Council. Adams Lake was once a gathering place for neighbours to meet, socialize, and gather roots and berries and has a present-day population of over 830 members (Adams Lake Indian Band 2022).
  1. Remote: The Haíɫzaqv (Heiltsuk Nation) are the main descendants of Haíɫzaqvḷa-speaking people and identify as being from one or more of five tribal groups: W̓úyalitx̌v, Q̓vúqvay̓áitx̌v, W̓u̓íƛ̓itx̌v, Y̓ísdáitx̌v, X̌íx̌ís. With a current population of 2,414 and growing, the Haíɫzaqv people hold strong connections between the community, the environment, and the economy (Heiltsuk Nation 2022). 

Context

The land and waters colonially named as B.C. are home to 290,210 Indigenous people and 200 distinct First Nations, representing 16 per cent of Canada’s Indigenous population (First Nation, Inuit, and Métis) and around six per cent of the B.C. population (Statistics Canada 2021). To understand the experiences of extreme climate events such as the 2021 extreme heat emergency in First Nations communities in B.C., it is important to understand the colonial context in which these extreme events take place. 

Dispossessing home, land, waters, and way of life

Traditionally, the formation of houses and communities were determined by the land, waters, and relationships with land-sustaining systems. Houses were designed for the local climate, local materials, and the function of the house (e.g., fishermen and women, hunters, trappers, traders, wool workers, wood carvers) (Olsen 2016).   

Traditional homes for the Líľwat7úl, Secwépemc, and Nlaka’pamux: Organized in extended family groupings, the Líľwat7úl wintered in villages consisting of clustered c7ístkens, semi-subterranean “pit houses”. In temperate months, life was lived outside, fishing, hunting, and gathering as people travelled a traditional territory of almost 800,000 hectares, from coastal inlets to deep in the rainforest (Gabriel et al. 2017).

Similarly, the Secwépemc c7ístkten (winter home) could accommodate 15 to 30 people or four to five families (Favrholdt 2022). Located close to food sources and a place with loose soil, several c7ístkten would form a community. On the move in the summer for hunting, gathering, and fishing, the Secwépemc generally used c7ístkten from December to March, depending on the severity of the winter. Reused and rebuilt as necessary, these dwellings were used by the Secwépemc and other Interior peoples into the late 19th century. 

Among Nlaka’pamux, pit houses were used year-round and provided relief from the heat in the summer. The homes were carefully placed away from water to ensure dry conditions.

A winter home in the Nicola Valley, believed to have been occupied as late as 1882. The photo was taken in 1908 by archaeologist Harlan I. Smith after the dwelling had been abandoned. Photo credit: Courtesy Secwépemc Museum, Neg. 43101
A winter home in the Nicola Valley, believed to have been occupied as late as 1882. The photo was taken in 1908 by archaeologist Harlan I. Smith after the dwelling had been abandoned. Photo credit: Courtesy Secwépemc Museum, Neg. 43101

Through the Indian Act of 1876, the federal government displaced Indigenous Peoples to sub-standard, small parcels of land and took over jurisdiction for on-reserve housing. The Interior reserves were small, some bands had no reserve land, and one community was given a field of boulders (Harris 2002). No attempt had been made to protect Indigenous fisheries or water for irrigation. In many areas, settlers had taken all available water, leaving most reserves unable to sustain themselves (Harris 2002). This led to dispossession of land, waters, and the way of life that reflected community values. 

By the 1940s, government involvement in housing assistance became more widespread with Indian agents arranging the purchase, delivery, and payment of building materials. In this era, reserve residents and band leadership were denied control over financial decisions and housing decisions (e.g., where to live, what type of house to live in, how much to spend on housing). As a result, housing knowledge that the mainstream society took for granted was not available on reserves (Olsen 2016). 

Housing infrastructure is a critical factor for heat vulnerability and health outcomes (Samuelson et al. 2020). While lower quality housing is often seen as a marker of poverty within mainstream society, the housing practices established under the Indian Act created poverty (Olsen 2016). This race-based denial of safe housing as a basic human right continues today and manifests in, for example, overcrowding due to lack of housing suited for intergenerational living. Having provided this important context, we now turn to the 2021 extreme heat experiences. 

How hot did it get? 

The 2021 extreme heat was unlike anything the communities had seen before. Some areas in B.C. experienced record-breaking temperatures up to 20° C above normal (Table 1). 

Table 1: 2021 recorded temperatures from the weather stations located near case study communities.
LocationAverage (June, July)RecordDate (of all-time max temperature)
Lytton24.1° C, 28.1° C49.6° CJune 29, 2021
Adams Lake (Kamloops)25.1° C, 28.9° C47.3° CJune 29, 2021
Haíɫzaqv (Bella Bella)13.5° C, 16.4° C35.8° CJune 28, 2021
Tsleil-Waututh Nation (North Vancouver)14.4° C, 17.0° C40.6° CJune 28, 2021
Mount Currie (Pemberton)13.6° C, 16.4° C43.2° CJune 28, 2021

Data sourced from Environment and Climate Change Canada

This included Canada’s highest ever recorded temperature—49.6° C on June 29, 2021—in Lytton, located on the Nlaka’pamux Nation territory and the arid, steep, rocky Fraser Canyon. On June 30, Lytton burnt to the ground in 21 minutes. The Kanaka Bar Indian Band’s weather station provided site specific data (Figure 1). It is important to note that some community members in Lytton area shared photos recording 50°+ C in their vehicles and inside their homes on household thermometers before the fire started.

Figure 1: Temperatures from June 25-July 31, from different weather stations in Kanaka Bar (courtesy of Kanaka Bar Indian Band)

What this experience taught us: community is the solution 

“What are our solutions for extreme heat? When we look at this from an Indigenous perspective, it’s community. First and foremost, we have to look after each other.” ~ Patrick Michell, former Chief of Kanaka Bar Indian Band and Lytton resident

Below, we describe community experiences with extreme heat along some of the main themes that were identified in the sharing circles. These include extreme heat impacts on land and waters, and food, as well as experiences in accessing cooling spaces, and climate action. 

The urban experience: Tsleil-Waututh Nation

As a coastal urban nation, the consequences of the extreme heat event saw considerable strain on community capacity, the displacement of Elders, dramatic impacts to the land and water, and consequences to food security and sovereignty. The urban narrative, provided by the first-hand experience of the Tsleil-Waututh Nation Health Director, Andrea Aleck, draws on technical, cultural, and community-based wisdom. 

Tsleil-Waututh experience of the impacts on the land and water

The 2021 extreme heat emergency had significant impacts on the land and water systems that support and sustain Indigenous ways of life. These impacts resulted in inhospitable conditions for animal and plant life and have cascading consequences for food security and access to traditional medicines. 

“Temperature increases have a significant impact on our waters. We are seeing a surge in red tide events, an increase in coastal erosion due to drying of the foreshore and a loss of sea plants that support ocean life and cooler estuaries. The Tsleil-Waututh Nation is working to plant eelgrass as a way to mitigate some of these negative impacts. Not only is this promoting the survival of a native species, it is providing a cultural learning and engagement tool for our community. It is part of our health to be out on our lands and waters and the activity of planting eelgrass nurtures the community perspective of health and offsets the negative changes to our environment.” ~ Andrea Aleck, Tsleil-Waututh Health Director

Tsleil-Waututh experience of the impacts on food security and sovereignty

The consequences of extreme heat on Indigenous food systems and sovereignty were addressed in great detail by Andrea. However, she also highlighted innovative, strength-based, and adaptive solutions being undertaken by the Tsleil-Waututh Nation. 

“Food security and sovereignty is a critical area of work for the Health Department and due to the impacts of extreme weather—including the heat emergency in 2021—we are having to think and plan critically around this. We have developed a five-year strategic plan around food sovereignty and community gardening, this includes investments into a hydroponic building where we can grow a veggie from seed to table in a very short period of time.” ~ Andrea Aleck, Tsleil-Waututh Health Director

Tsleil-Waututh response to heat and access to cooling

As a coastal community located at the base of the North Shore mountains, the forest canopy and bodies of water have traditionally offered an escape from extreme heat. The 2021 response required an enhanced level of protective solutions specific to the care of Elders and vulnerable members of the community. 

For the Tsleil-Waututh Nation, community health played a critical role in the response to extreme heat. As an immediate protective measure, an analysis of the Elders was done within the community—this assessment considered pre-existing health conditions, their living environment, and identified how Elders could mitigate the risk of heat in their own homes. To ensure that there was continuity to the care, Home and Community Care practitioners were providing enhanced wellness checks, however their findings uncovered the following:     

“Even though we had provided fans and some Elders had access to air-conditioning units, we found that they were going unused as Elders could not bear the costs associated with operating the units. This required us to take additional measures and move Elders out of the community and into hotels in our neighbouring non-Indigenous communities. But there is hesitancy on the Elders’ part to leave their homes and leave the community. As a health team and a community, we know that when possible, it is important to stay in the community, that home is a safe place and family is always close by. But in this instance, we knew that we needed to have Elders living in temporary cooler spaces, so to assure safety the Elders were able to bring their companion or care-giver and we found that with additional supports, about 80 per cent of our Elders did decide to go.” ~ Andrea Aleck, Tsleil-Waututh Health Director.

The rural experience: Kanaka Bar Indian Band, Adams Lake Indian Band, and Lil’wat Nation 

Over the past five years, communities in B.C.’s Interior have faced compounding hazards of increasing frequency and intensity—from the Elephant Hill wildfire that devastated Ashcroft Indian Band in 2017 to the 2021 fire that burnt down Lytton. Yet, 2021 was a complete departure from previous experiences with extreme heat. 

“It’s almost like the air had a crackle in it. It was so strange, but you could smell the trees. You could feel the energy of the trees like when you put a branch of pine on a hot stove. That’s how the whole air smelt, and you couldn’t get away from it nowhere, no matter where you were.” ~ Sheri Lysons, former Licensed Practical Nurse who was the Fire Chief at the time, Adams Lake Indian Band 

The duration of the 2021 heat emergency was a particular concern, as Patrick Michell, former Chief of Kanaka Bar Indian Band and Lytton resident shared: “One of the things that changed is extreme heat is occurring in greater frequency, duration, and intensity—emphasis on duration. Lytton in the past had recorded 44.4° C for one day and then in 2021, temperatures closer to 50° C occurred for days; what happens if we stay in excess of 50° C for longer periods? This heat has impacts on land and waters, not only the people.” 

The rural experience of impacts on land, waters, and food 

“How do we as Indigenous people deal with and prepare for the fact that our homeland is dying? I was prepared physically for the physiological effects on me. I was even prepared mentally, but what I wasn’t necessarily prepared for was the impacts on the ecosystems. That’s different. We’re going to transition from coastal to desert.” ~ Patrick Michell, Kanaka Bar Indian Band, Lytton resident

Sharing circle participants discussed how these extreme events are warnings of a fundamental eco-system disbalance. These warnings are carried by the animals, insects, trees, and the land. For example, the heat brought about swarms of insects by speeding up the reproductive cycles of houseflies, and led to a rapid rise of mosquitoes; wasps also became more aggressive. There is an acute need to listen to these warnings.

“I think what people need to start doing is looking more toward what the land is telling us rather than what science is telling us, because the land has gone and done this for thousands and thousands of years, and it knows the cycles and we need to pay attention to that. Look at what the animals, what the buds are telling you, what the waters are telling you, because they have the answers. We just need to listen.” ~ Sheri Lysons, Adam Lake Indian Band

Extreme heat was accompanied by drought. Combined, these events disrupted the cycles of seeds and plants which in turn displaced animals and began to displace trees. To adapt, the Kanaka Bar Indian Band is setting aside water in reservoirs, so that during the heat and drought there’s still water for the ecosystems, for drinking, for fire protection, and for irrigation.

The heat, insects, and the drought severely disrupted food harvesting and preservation initiatives. Berries and fruit shrivelled on bushes and trees. Bears went hungry. Food preservation becomes challenging given the amount of additional moisture and heat produced when canning: “In the summer, notwithstanding the heat wave, with 17 people living in an energy efficient home cooking a turkey or a fish, or canning for four hours, heats the inside buildings which is trapped. So how do you cook during an extreme heat event?” asked Patrick.  An outbuilding that allowed cooking outside was utilized by some families, which is crucially important for food self-sufficiency.

The rural response to heat and access to cooling 

We found that Interior communities were more accustomed to extreme heat when it comes to the built environment and air conditioning, given the experiences with heat in the past. We review these strategies for homes and at a community level. 

Access to cool environments in communities 

“We had thrived at 42°- 43° C before; we had a life. What we didn’t know yet was how to survive 50+° C. And the answer was, hunker down, and don’t go outside. It too shall pass.” ~ Patrick Michell, Kanaka Bar Indian Band, Lytton resident

Historically, across the communities, when the summer heat arrived, people went to the water. Lakes, creeks, rivers have been the “nature-based solutions” that provided much needed respite and brought families and communities together. As Patrick shared: “For my community, we all went to the creek. By 11 am, when it got hot, we would sit in creeks.”     

However, with climate change these traditions are increasingly challenged: “The problem is by June, Lytton Creek is now no longer flowing, so you don’t have the surface water of Lytton Creek. You can go down to the Fraser and Thompson, but the Fraser and Thompson as a river system is now hitting 20 – 23° C. That’s bathwater. So, where’s the relief?” Patrick questioned. 

“We live right on the lake, so we always had the water and the river to keep us cool. But the water felt like bath temperature [during the heat wave], even in the middle of the lake. It would normally be cooler because of the flow of water, but it was brutal out here.” ~ Sheri Lysons, Adams Lake Indian Band

Some relief came in the form of cool community spaces. In Adams Lake Indian Band and in Lil’wat Nation, cooling centres at the band office, health centre or other designated buildings were open during office hours, or until  8 p.m. – 9 p.m. at the latest. Cooling centres were trusted community spaces and were used by Elders to visit with each other. Unavailability of cooling outside of office hours was a limitation especially given hot nighttime temperatures. At Kanaka Bar Indian Band, a community building entry code was provided so that people could access the cool environment 24 hours/day. During the heat emergency, the building was staffed at night to help people.  

Access to cooling in homes 

The 2021 heat was particularly unbearable for Interior communities because there was no relief during the night, especially in the Lytton area. As Patrick shared: “Normally when we hit 42° C, nighttime temperatures dropped to the twenties. We had high thirties at night during the heat emergency. There was simply no cooling off.” High temperatures throughout the night present a major risk factor for heat-related mortality risk (He et al. 2022). 

As heat began blanketing the Interior, kinship systems were activated and those with air conditioning housed family members who did not have it: “My daughter, my grandkids, and my son were staying at my house because I had the air conditioner,” shared Sheri.

Recently in communities, an effort has been made to build energy efficient homes that have a better insulated building envelope. The challenge was that without an air flow system these homes trapped heat, especially at night. “The bedrooms are upstairs where it was most hot. The house was muggy inside. We were sweating inside as if we were playing sports,” shared Casey Gabriel, Fire Captain, Lil’wat Nation. People living in homes with basements fared much better as the basements provided relief at night, some suggesting that “it was 50 per cent cooler.”

The remote experience: Haíɫzaqv (Heiltsuk Nation)

“Salmon is our main source of food, and it is on the brink of extinction. It’s like that on the whole coast. Skinny bears. We’re all feeling the effect of global warming.” ~ Haíɫzaqv participant 

Impacts on land, waters, and food 

The Haíɫzaqv community of Bella Bella, on Campbell Island, off the central coast of British Columbia is a coastal community that has sustained themselves for the past 9,000 years with gifts from land and waters. Climate change and extreme heat are fundamentally changing the Nation’s ability to feed themselves: 

“A few years ago, we had heat waves two or three summers consecutively.  A lot of salmon were dying. They weren’t making it into the rivers. There was no water for them to spawn. And ever since, with the climate change, our salmon populations are almost extinct.” ~ Randy Carpenter, Heiltsuk Emergency Coordinator

Thousands of salmon dying in the Neekas River. Photo credit: Sarah Mund, taken on Heiltsuk Territory.
Thousands of salmon dying in the Neekas River. Photo credit: Sarah Mund, taken on Heiltsuk Territory.

The heat had an impact on drinking water and water for public works: 

“Our dam was very low. I think they dredged out between 100 and 150 truckloads. Now we do have a lot of water.  We can probably go 4-6 months without rain, and we will still have water.” ~ Randy Carpenter, member of the Heiltsuk First Nation

The heat affected cultural continuity: from an inability to hold cultural ceremonies to disrupted food preservation activities, making it impossible to can or smoke food indoors or outdoors, due to heat and fire bans: 

“Heat wave meant that we couldn’t have fires, which meant there couldn’t be traditional barbecuing of fish, which meant there couldn’t be processing, saving, or storing of fish.”  ~ Haíɫzaqv participant

Response to heat and access to cooling in community 

For Haíɫzaqv the heat had major impacts on infrastructure and services. As a remote community dependent on the local airport for critical supplies, heat became a factor in operations. As temperatures heated up, the air became less dense, making it harder to take off and land safely especially on a short single runway: 

“[Less lift due to heat] means you can take less fuel, less people, less everything. The heat also affects landing weight which is a great impact on our community, if something needed to be brought in an emergency or out… There were also people in neighbouring communities that were very dependent to get certain medication to stay alive… It was hard to get their meds in the heat wave.”  ~ Kathy Sereda, Haíɫzaqv participant

As a remote community, the Nation developed a truly relational approach to emergency planning by bringing together a 21-member emergency preparedness committee: 

“It’s got everybody in our community: fire department, hospital, health transfer building, school, RCMP, Coast Guard Auxiliary, a Councillor, a health and safety officer from Tribal Council, a person from housing reconciliation, finance, communication. We are strong in that we regularly meet 6-8 times a month.” ~ Randy Carpenter, member of the Heiltsuk First Nation

During the 2021 extreme heat emergency, none of the community buildings had air conditioning as 2021 temperatures were unprecedented in the territory. At the time of the sharing circle in winter of 2023, the Nation was working to resolve this issue. As Randy noted: “We will be prepared before the summer. We will have a building in place, and we will have air conditioners. We will be ready for if we have extreme heat coming up [this] summer.”

Access to cooling in homes: Haíɫzaqv Climate Action

“To be Haíɫzaqv is to act and speak correctly, as human beings in balance with the natural and supernatural world; to live in accordance with our ǧvi̓ḷás (traditional laws). Living up to our responsibilities means taking immediate and meaningful action on climate change.” (Haíɫzaqv Climate Action 2023)     

H̓íkila qṇts n̓ála’áx̌v (Protecting our World) and the Haíɫzaqv Climate Action plan has been celebrated across B.C. and Canada. Born in response to a fuel spill which destroyed 60 per cent of the community’s clam beds and fish, the plan is aimed to remove diesel dependency for the community. A heat pump project is ensuring that homes are warm in the winter and cool in the summer: “There’s a new initiative in town where we’re changing fuel. I believe there’s probably between 150 and 200 homes in the last couple of years that have went from fuel and wood, to just electricity” (Haíɫzaqv participant). As well as preparing the community for extreme heat, fuel switching has also had a positive impact on affordability and emissions: reducing average annual costs of $3,600 per home for heating and electricity by more than $1,500. One home switching to heat pumps eliminates five tonnes of greenhouse gas emissions annually and reduced fuel consumption by 2,000 litres of diesel per home per year (Haíɫzaqv Climate Action 2023).

Recent community growth coupled with fuel switching is putting pressure on the power lines. Historically, the community has seen prolonged recurring power outages that are very stressful for community members as they rely on power both in the winter for warmth and in the summer to cool homes. 

“There’s a lot of heat pumps in and they draw a lot of power when they start up. We’re going to be expanding and installing more heat pumps this spring. Something that we need to keep in mind is our power lines. Are they adequate enough to be using that much power and what are the effects that are going to happen?” ~ Ralph Humchitt, Haíɫzaqv participant

Discussion and recommendations: A lot more work needs to be done

“Give people the truth if you want them to adapt.” Patrick Michell

Across communities, the environment is changing drastically with dire impacts on land, waters, as well as human and non-human life. The B.C. extreme heat emergency of 2021 created a terrifying new threshold beyond anything previously experienced with changes that will “be affecting us for generations,” as Sheri shared.

We observed similarities and differences within our focus on urban, rural, and remote communities. In urban settings, there was an opportunity to leverage hotels for housing Elders during the heat. In rural communities in the Interior, air-conditioning in homes was more prevalent given previous experiences with heat. In a remote setting, at the time of the 2021 heat wave none of the Haíɫzaqv community buildings had air-conditioning given the historically moderate climate. 

Our case study limitations include an on-reserve focus only. More research is needed to understand Indigenous experiences with heat for off-reserve populations, especially insecurely housed, the homeless, and people experiencing mental health and substance use.

To be Indigenous is to be resilient: Culture is protective  

Culture is foundational to Indigenous life and is an inherent source of strength. It is a grounding element in intrinsic Indigenous values that are placed on family, community, language, and land. Throughout each of the case studies, the protective role that culture plays in relation to extreme heat events emerges through the narrative regarding the care of Elders, the relationship to the land, ties to traditional foods, and the collective action of community. 

Our case study offers a counter narrative to experiences with heat in B.C. While extreme heat outcomes are often assessed as a result of individual socio-economic and health conditions (thus placing the focus on the individuals in vulnerable conditions) our case study demonstrates that these outcomes also depend on the values of the society. For example: When Elders are valued, they are protected. Despite some Elders living in substandard housing, facing health challenges, and lacking access to air conditioners in their homes, a kinship and community care-based systems proved effective in activating informal and formal resources to ensure safe outcomes. 

Recommendations:

  1. Approach Indigenous resilience planning by centring on Indigenous rights, the relevance of Indigenous Knowledge and language, the presence of Indigenous institutions of governance and the intergenerational strength of culture. Investments in culture are investments in resilience. Tangible investments need to be made available that allow for the nurturing of culture (e.g., at a neighbourhood or broader societal level) where Elders are visible, valued, and cared for as this can ensure safer outcomes. 
  2. Implement trauma-informed approaches to heat response planning. While all of the communities prioritized Elders in their response, this was not easy (e.g., due to lack of cool spaces at night and mobility issues for using “Mother Nature’s cooling centres” such as lakes and rivers). Another big challenge voiced by communities was the Elders’ desire to be independent. Participants shared that Indigenous stoicism (“others need help more than I do”), as well as shame and stigma brought by colonial services were also barriers for seeking help. Heat response planning needs to be trauma-informed at the community level and a broader system level.

The compounding nature of disasters and trauma: Fear now lives within communities

Across the communities, there were very strong distinctions between impacts of the 2021 heat wave and the subsequent compounding disaster events that followed. For the Nlaka’pamux Nation, the impacts of a wildfire that devastated Lytton and Lytton First Nation as well as homes of some Kanaka Bar Indian Band residents, are still felt to this day due to displacement and inability to return. This wildfire devastation, somewhat like the one that Ashcroft Indian Band experienced in 2017 wildfire, has left communities in profound fear. This fear is triggered by the ever-increasing frequency and intensity of extreme heat events, increased winds, and drought conditions. 

There is a tendency in emergency management and public policy to focus on the event that has just passed. There is also a tendency to focus on hazard specific planning that results in silos. While the documented strengths and solutions emerged at the community level, this is not sufficient for addressing long-term compounding effects of heat, subsequent drought, wildfires, extreme smoke, animal displacement, as well as tree and animal mortality. The root causes of these compounding disasters and existential fear that they bring lie far beyond the Indigenous territories where the impacts are felt the most. 

Recommendation: 

  1. Acknowledge and plan for distinct strengths, vulnerabilities, and needs of urban, rural, and remote First Nations communities. Remove hazard-specific planning silos. Plan for extreme heat and compounding effects at a watershed, provincial, and federal level. Invest to better understand the complexities tied to the compounding effects that intersect with extreme heat.

Invest in site specific data, “build homes that will last for future generations”, and reduce an over-reliance on the grid     

Our case study shows that heat response plans need site-specific data at a community level given the vast differences in geography and recorded temperatures across B.C. from semi-deserts in the interior to coastal rainforests. In Lytton, the weather station’s temperature records differ from what people recorded in their vehicles and house thermometers. The weather stations placed in cooler locations may not account for the fact that localized temperatures may be hotter in some areas due to radiant heat trapped in buildings or natural features such as canyons. It is unclear whether the weather stations were updated to be able to measure the extremes. In addition to temperature, key factors like humidity, air movement, and radiant heat must be considered. Provincially available climate data sets (e.g., BC Station Data – Provincial Climate Data Set) need to be made accessible to communities in a way that can be used for planning without requiring highly specialized technical knowledge. Provincial and federal governments funding streams could be created to support investments site specific climate monitoring at the community level. This would ensure a solid basis for adaptation. 

While this case study focused on the extreme heat of 2021, the participants spoke of numerous events experienced since and the importance of addressing both extreme heat and extreme cold, especially in the context of power outages. At regional and provincial scales, power outages, serviceability during extreme events, and potential for large-scale prolonged system failures need to be considered. At a community level, energy poverty and unaffordability of cooling, especially for people living with disabilities or on social assistance must be addressed. Colonial policies resulted in “one size [does not] fit all” homes that are overcrowded (not designed around intergenerational living), are poorly built and poorly insulated (using substandard materials), and not built for local climates. 

Recommendations: 

  1. To ensure climate resilient homes and to counteract an over-reliance on energy for cooling, build for local climate using site-specific data and place-based approaches. Passive design elements (that do not rely on energy to stay cool) could help ensure that houses stay safe during power outages in extreme heat. 
  2. Develop better measures of success when it comes to extreme heat planning. Is it about 100 air conditioners in 100 homes in which case the onus and cost of running them for keeping safe is placed on the most heat vulnerable? Is it about moral responsibility to look after your neighbour? Is it about the legal responsibility of landlords to ensure safe housing? Is it about combatting a culture of individualism, loneliness, isolation, and social neglect? 

Conclusion

The experiences with the 2021 extreme heat emergency described in this case study provide a glimpse into the vulnerabilities and strengths held within communities. Our case study shows that from an Indigenous perspective the impacts of the 2021 heat emergency on land, waters, and people are felt to this day. With extreme heat emergencies now considered hazards that all communities need to plan and prepare for, Indigenous wisdom must be considered a central part of the collective solution for enhanced resilience. The case studies brought forward in this work provide applied solutions and enable the development of policy recommendations for enhanced resilience across Indigenous and non-Indigenous communities. 

Artist Statement from Sheri Lysons:

When I was asked to paint my interpretation of climate change I had a much different image in my head. I started about 8 different paintings and none of them worked the way I envisioned. I fought to pull it together and it just wouldn’t come. At one point I felt like it was beyond my capabilities. Then it came to me, the medicine wheel, when mankind is out of balance everything suffers. Right now we are looking at a planet in crisis. We are experiencing extreme heat, fires, floods and destruction on a monumental level. To heal our planet we need to heal the water. These paintings are meant to show hope and healing.” – Sheri Lysons

References

BC Coroners Service. 2022. Extreme heat and human mortality: A review of heat-related deaths in B.C. in summer 2021. https://www2.gov.bc.ca/assets/gov/birth-adoption-death-marriage-and-divorce/deaths/coroners-service/death-review-panel/extreme_heat_death_review_panel_report.pdf 

Favrholdt, K. 2022. “The Secwépemc c7ístkten or winter home” Kamloops This Weekhttps://www.kamloopsthisweek.com/community/history-the-secwepemc-c7istkten-or-winter-home-5627603#:~:text=Among%20the%20Interior%20Salish%20peoples,by%20the%20Secw%C3%A9pemc%20as%20c7%C3%ADstkten. (July 26, 2022). 

Gabriel, C., Henry, S. and Yumagulova, L. 2019. “Preparing our Home: Lessons from Xeťólacw Community School, Lil’wat Nation” http://preparingourhome.ca/lessons-from-the-xetolacw-community-school/ 

Government of Canada. 2019. Budget: GBA+: Chapter 3. – Redressing Past Wrongs and Advancing Self-Determination. https://www.budget.canada.ca/2019/docs/plan/chap-03-en.html 

Hahmann and Kumar. 2022. “Unmet health care needs during the pandemic and resulting impacts among First Nations people living off reserve, Métis and Inuit” https://www.researchgate.net/publication/363349826_Unmet_health_care_needs_during_the_pandemic_and_resulting_impacts_among_First_Nations_people_living_off_reserve_Metis_and_Inuit_StatCan_COVID-19_Data_to_Insights_for_a_Better_Canada 

Haíɫzaqv Climate Action. 2022. Heat Pump Project. https://heiltsukclimateaction.ca/heat-pump-project 

Harris, C. 2002. Making native space: Colonialism, resistance, and reserves in British Columbia. UBC Press.

He, C., Kim, H., Hashizume, M., Lee, W., Honda, Y., Kim, S. E., & Kan, H. 2022. “The effects of night-time warming on mortality burden under future climate change scenarios: a modelling study.” The Lancet Planetary Health6(8), e648-e657. https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(22)00139-5/fulltext 

Lil’wat Nation, 2023 

Olsen, S. 2016. ”Making poverty: A history of on-reserve housing programs, 1930-1996 (Doctoral dissertation). https://fnhpa.ca/_Library/KC_BP_1_History/Making_Poverty.pdf 

Samuelson, H., Baniassadi, A., Lin, A., González, P. I., Brawley, T., & Narula, T. 2020. “Housing as a critical determinant of heat vulnerability and health.” Science of the Total Environment720. https://www.sciencedirect.com/science/article/abs/pii/S0048969720308068 

Statistics Canada. 2021. Housing conditions among First Nations people, Métis and Inuit in Canada from the 2021 Census. https://www12.statcan.gc.ca/census-recensement/2021/as-sa/98-200-X/2021007/98-200-X2021007-eng.cfm 

Mobilizing private capital for climate adaptation infrastructure

How circularity can contribute to emissions reductions in Canada

Hybrid heat in Quebec: Energir and Hydro-Quebec’s collaboration on building heat decarbonization

Disclosure statement: COPTICOM, who employs the authors, acts as a consultant for Énergir.

Quebec’s energy context

Two companies control almost all electricity and gas infrastructure in Quebec. The Crown corporation Hydro-Québec holds a monopoly on transmitting, distributing and purchasing electricity, and produces or buys over 90% of Quebec’s hydropower. Énergir, meanwhile, distributes 97% of the natural gas used in Quebec. It is 80.9% owned by the Caisse de dépôt et placement du Québec (CDPQ)—managers of Quebec’s pension plan, among other things—and the Fonds de solidarité FTQ, a labour investment fund that manages a part of the retirement savings of around 735,000 workers.

In Quebec, greenhouse gas (GHG) emissions from natural gas are practically all due to the distribution and consumption of gasdelivered by Énergir. The company intends to make its operations carbon‑neutral by 2050 through the development of renewable natural gas (RNG), energy efficiency improvements on the customer end and taking a complementary approach with plans for electrification.[1]

The Quebec government has set a GHG emission reduction goal of a 37.5% decrease by 2030 compared to 1990 levels, and is aiming for carbon neutrality by 2050. It plans to achieve these objectives through major electrification of road transport, building heating and a major proportion of industrial applications.

Residential energy consumption in Quebec

In 2019,[2] natural gas represented only 13% of Quebec’s energy consumption,[3] compared to 36% for Canada as a whole.[4] It is used by industry (55%), institutional and commercial buildings (28%) and residential buildings (11%), with the remainder going to other niche uses (5%). It is nearly unused in producing electricity, 99.6% of which comes from hydroelectricity and wind energy.

Residential energy consumption in Quebec is primarily electricity (74%), in addition to 12% for biofuels, 8% for natural gas and 5% for petroleum products such as oil. The majority of institutional and commercial buildings’ consumption is electricity (53%), followed by natural gas (27%), oil (16%), propane and biofuels (4%). Natural gas consumption in the building and industry sectors resulted in 12 Mt CO2 eq in 2019, or 14.2% of Quebec’s greenhouse gas (GHG) emissions.

Dual energy agreement between Hydro-Quebec and Énergir

On July 13, 2021, Hydro-Québec and Énergir signed a dual energy agreement for 2022–2045. This partnership aims to convert the natural gas heating systems of Énergir customers into systems supplied by both electricity and natural gas. During cold snaps, when heating demand peaks, natural gas will be used in place of electricity, reducing the stress on the Hydro‑Québec network. Outside these peak periods, buildings will be heated by electricity alone. Dual energy is a means of maximizing the role of electricity in building heating—and thereby reducing GHG emissions associated with heating—while minimizing impact during winter peaks.

Snow falling on a cold winter weather day across residential buildings in Montreal.

In Phase 1 of the agreement, around 100,000 residential customers were encouraged to convert to dual energy.[5] In Phase 2, the dual energy offer will be broadened to commercial and institutional sub‑sectors.[6]  The Régie de l’énergie should decide on the launch of Phase 2 in spring 2023. Note that the agreement also aims to encourage owners of new residential, commercial and institutional buildings to opt for dual energy heating systems.[7]

The agreement is supported by the government of Quebec, which has signalled to the Régie de l’énergie its desire to encourage the conversion of heating systems to dual energy (electricity and natural gas).[8] The agreement is also clearly aligned with 2023 Plan for a Green Economy and its objective to reduce heating-related emissions to 50% of 1990 levels by the end of the decade.[9]

Any new or existing Énergir customer who wants to convert their heating system to dual energy can benefit from grants[10] covering up to 80% of conversion costs[11] from the government of Quebec and Hydro-Québec.

Dual energy conversion will reduce natural gas consumption by residential, commercial and institutional customers by over 70%,[12] while the electrification of buildings (residential, commercial and institutional) converted to dual energy will require Hydro‑Québec to supply 63 MW of additional power in 2030.[13]

According to Hydro-Québec, implementing dual energy will yield savings of $1.682 billion compared to what full electrification of building heat would cost,[14] in addition to requiring that 2,070 MW of additional capacity be installed by 2030[15] at an estimated cost of $2.7 billion (see table below).

Summary table comparing the total electrification of the building sector ("fully electrical" scenario, FE) and the implementation of the dual energy agreement ("dual energy" scenario)
Source: Régie de l’énergie du Québec, “Décision – Demande relative aux mesures de soutien à la décarbonation du chauffage des bâtiments – Phase 1 (R-4169-2021),” Régie de l’énergie du Québec, May 19, 2022.

Énergir, for its part, will be given financial compensation (called a GHG contribution)[16] up to a cumulative total of $403 million by 2030[17] for the loss of revenues resulting from some of its customers switching to dual energy, in order to balance the impact on rates for customers of both distributors. This compensation should cover approximately 80% of Énergir’s lost revenue,[18] but depends on the actual quantity of natural gas that will be replaced by Hydro-Québec electricity.

cumulative rate impact for "fully electrical" and "dual energy" scenarios.
Source: Régie de l’énergie du Québec, “Décision – Demande relative aux mesures de soutien à la décarbonation du chauffage des bâtiments – Phase 1 (R-4169-2021),” Régie de l’énergie du Québec, May 19, 2022.

Is dual energy the best way to decarbonize buildings?

At first glance, the dual energy agreement between Hydro-Québec and Énergir is an attractive mechanism for decarbonizing the building sector. It enables better management of peak power demands on the power grid while simultaneously supporting a natural gas distributor in reducing its energy deliveries. It is also more economical for Hydro‑Québec than full electrification of building heating. In short, it enables all the parties involved to successfully reach a series of important economic, technical and climate objectives.

It is also a bold solution, made possible by several mutually reinforcing circumstances. First, it involves two companies with monopoly control that have set sizable decarbonization objectives for themselves. Hydro‑Québec’s shareholder, the government of Quebec, is likewise committed to a decarbonization timeline with milestones in 2030 and 2050, while Énergir’s shareholders, the Caisse de dépôt et placement du Québec and the Fonds FTQ, are purposely working to decarbonize their investment portfolios. Finally, the solution spares the customers of both companies from rate increases, compared to full electrification of building heating.

Furthermore, the dual energy agreement approach ensures that the GHG contribution paid to Énergir by Hydro‑Québec will remain in the public sphere (via the CDPQ) or at least as part of the common good (for the hundreds of thousands of Quebec residents whose retirement savings are partially managed by the Fonds de solidarité FTQ).

Nonetheless, this agreement is not without its limitations. First of all, it applies only to the building sector (responsible for 35.9% of the volume of natural gas distributed). The industrial sector, with 64.1% of the volume distributed, is left out altogether.

The agreement itself also does not include any complementary policies or instruments that might help further decarbonize the building sector and limit peak demand impacts on the power grid.[19] The government has considered or partly deployed such measures, but Hydro-Québec and Énergir have not developed a consistent and integrated approach.[20] With such an approach, it would be possible to assess whether the 30% residual heating demand that Énergir will continue to assume under the agreement could be partially or fully addressed by complementary methods.

The dual energy agreement could also lead to a certain degree of “carbon lock‑in” in Quebec’s building sector. Replacing heating systems at the end of their lifespan and connecting new customers to the Énergir network (and, by extension, the dual energy offer) by 2030 locks in a certain level of natural gas consumption until 2045, due to Énergir’s 15‑year customer contracts. What is even more concerning is that this goes against the recommendations of the International Energy Agency, including the recommendation to ban new fossil fuel boilers starting in 2025 if we want to reach net zero by 2050.[21]

Finally, Énergir hopes to use RNG to replace the remaining 30% natural gas that is necessary under the agreement, in order to reach net zero for the building sector by 2050. At this point, however, there are no indications that RNG will be available in sufficient quantity to fully replace that 30%. In 2022, for example, RNG made up only 0.6% of the natural gas distributed by Énergir.[22]

Is this an innovative model that’s reproducible elsewhere in Canada?

The dual energy agreement between Hydro-Québec and Énergir bolsters the idea that a rapid reduction in the production and consumption of fossil fuels must inevitably call for large-scale systemic efforts, which here are brought about, directly and indirectly, by the action and support of the Quebec government.

The agreement was made within a specific business, regulatory and political context. Both partners’ property is in large part public domain, both were already set on the road to decarbonization, and the government of Quebec has made strong commitments to fight climate change and radically reduce the use of fossil fuels. It is possible that other public utility companies elsewhere in Canada will be inspired to adapt this approach to their own networks.

Overall, with this agreement Hydro-Québec and Énergir, with the support of the government of Quebec, are taking a proactive approach to the energy transition, rather than a passive or reactive one. This may be the one of the most significant lessons to learn from this case study.


References

[1] Énergir, “Climate Resiliency Report 2021,” 2022, pp. 27–29.

[2] As data for 2021 and 2022 are not yet available, we have used 2019 data, given that 2020 was a statistical anomaly due to the COVID-19 pandemic.

[3] Johanne Whitmore and Pierre-Olivier Pineau, “The State of Energy in Quebec,” Chair in Energy Sector Management – HEC Montréal, February 2022, p. 5. The data in this section are drawn primarily from this report.

[4] Canada Energy Regulator, “Provincial and Territorial Energy Profiles – Canada,” July 28, 2022.

[5] Régie de l’énergie du Québec, “Décision – Demande relative aux mesures de soutien à la décarbonation du chauffage des bâtiments – Phase 1 (R-4169-2021),” May 19, 2022, p. 54.

[6] The residential sub‑sector accounts for 41.5% of emissions in Quebec’s building sector in 2019 (3.5 Mt CO2 eq), compared to 58.5% for the commercial and institutional sub-sectors (4.93 Mt CO2 eq).

[7] Régie de l’énergie du Québec, “Décision,” op. cit., p. 59.

[8] Gouvernement du Québec, Order in Council 1395-2022; Order in Council 874-2021.

[9] Gouvernement du Québec, “2023 Plan for a Green Economy – Framework Policy on Electrificiation and the Fight Against Climate Change,” Québec, Gouvernement du Québec, November 2020, p. 6.

[10] Régie de l’énergie du Québec, « Décision », op. cit., p. 78.

[11] Ibid.

[12] Ibid, p. 117.

[13] Hydro-Québec, “Offre d’Hydro-Québec Distribution et d’Énergir en réponse aux objectifs de décarbonation du chauffage des bâtiments énoncés dans le Plan pour une économie verte 2030 (R-4169-2021),” p. 21.

[14] Régie de l’énergie du Québec, « Décision », op. cit., p. 51.

[15] By comparison, the total hydroelectric capacity installed in Quebec in 2019 was 40,850 MW and provided 94% of electricity for the province. Canada Energy Regulator, “Provincial and Territorial Energy Profiles – Québec ».

[16] Régie de l’énergie du Québec, “Décision”, op. cit., p. 11.

[17] The maximum compensation of $403 million will be paid out if all the agreement’s target customers choose to convert to dual energy. Hydro‑Québec and Énergir. “Réponse des distributeurs à l’engagement numéro 2 (R-4169-2021),” February 24, 2022, p. 4.

[18] Régie de l’énergie du Québec, « Décision », op. cit., p. 124.

[19] In the “fully electrical” (FE) scenario, at peak times, the entire heating load is borne by electrical resistance, and there is no value added by efficient equipment. In this context, the outcome is that both scenarios rest on theoretical extremes (total electrification on one side, and complementarity between natural gas and electricity on the other) that make no effort to take into account other solutions, such as those mentioned in note 21. Hydro-Québec and Énergir, “Réponse des distributeurs à la demande de renseignements n° 1 de l’AHQ-ARQ,” December 8, 2021, p. 12.

[20]  Here we are thinking of dynamic pricing or smart energy technology, energy efficiency improvements through more widespread use of heat pumps, heat accumulators or thermal insulation of buildings, the promotion of low‑carbon measures based on behavioural changes, or potential electricity interties. In the hearing before the Régie de l’énergie on February 21, 2022, Hydro‑Québec suggested that complementary measures would be rolled out over the coming years in order to reach net zero by 2050. However, there is no evidence that this involves an integrated process, and only the replacement of natural gas by RNG was mentioned, without any consideration of whether there would be enough RNG available to replace the 30% of natural gas needed in a system converted to dual energy. Régie de l’énergie du Québec, “HQD-Énergir – Demande relative aux mesures de soutien à la décarbonation du chauffage des bâtiments – Audience du 21 février 2022 (R-4169-2021),” Régie de l’énergie du Québec, February 21, 2022, p. 73.

[21] International Energy Agency, « Net Zero by 2050 – A Roadmap for the Global Energy Sector », International Energy Agency, mai 2021, p. 19.

[22] Johanne Whitmore and Pierre-Olivier Pineau, “The State of Energy in Quebec 2022,” op. cit., p. 32.

Heat pumps are hot in the Maritimes

The rise of the Maritimes heat pump adoption has been both recent and rapid. Market, policy and social conditions made the Maritimes particularly well suited to the technology.

Introduction

The humble heat pump is so hot right now. 

As the global energy transition has gathered momentum worldwide, the importance of electrifying heating and cooling systems has shot up the agendas of governments pursuing more ambitious greenhouse gas emissions targets and net zero goals. As a result, the heat pump has moved with impressive speed from the efficiency-wonk margins to the very centre of energy system planning around the world. 

“Heat pumps, powered by low-emissions electricity, are the central technology in the global transition to secure and sustainable heating,” the International Energy Agency announced in its November 2022 technology report The Future of Heat Pumps. Both the UN’s Intergovernmental Panel on Climate Change and the prominent global consulting firm McKinsey have echoed this endorsement. And with Russia’s invasion of Ukraine highlighting Europe’s dependence on Russian natural gas, sales of heat pumps have shot up across the continent, with sales increasing by as much as twofold in some European countries in the first half of 2022 compared to the same period in 2021.      

So why have heat pumps attracted such hype? To begin with, because indoor heating is a significant wedge of the world’s contribution to the climate crisis—the IEA estimates that 10 per cent of global carbon dioxide emissions come from heating buildings—and heat pumps are often emissions-free and much more energy efficient than both fossil-fuel-generated and electric baseboard space heating. As the Canadian Climate Institute noted in a 2022 report, “Heat pumps are critical to Canada’s energy transition for several reasons. Heat pumps run on electricity, rather than fossil fuels, making them an important tool in Canada’s big switch to clean electricity. They also use up to 70 per cent less energy than conventional home heating technologies, promising savings for homeowners and renters.”

Worldwide, one-sixth of the natural gas burned each year is for heating, a share that rises to one-third in Europe, where the European Union is the global pacesetter for heat pump market growth. But there have also been substantial spikes in heat pump demand in North America, Japan, Korea and China as well. Heat pumps now account for 10 per cent of the world’s building heating, with the largest shares in Norway (where 60 per cent of buildings are equipped with heat pumps), Sweden and Finland (where the share is more than 40 per cent). Canada does not yet rank among the world’s leaders in heat pump adoption, despite its frigid winters and abundance of clean electricity (more than 80 per cent of the country’s electricity is emissions-free). Only 6 per cent of residential heating across Canada is currently drawn from heat pumps. 

But there is one notable exception—an anomaly that is the focus of this report. In three Maritime provinces, heat pumps are already the primary heating source in more than 20 per cent of households. New Brunswick leads the way at 32 per cent, followed by Prince Edward Island at 27 per cent and Nova Scotia at 21 per cent. And those shares are growing much faster than any other primary heating source in the region—in Nova Scotia, for example, heat pump use has expanded from 6 per cent to 21 per cent of households since 2013. 

As the rest of Canada looks to accelerate the electrification of its heating systems, this Maritimes anomaly merits closer inspection. How did the Maritime provinces become Canada’s heat pump vanguard? What conditions, policies and market forces have driven that increased uptake, and what lessons can they provide about how to drive heat pump adoption across the country? There is limited data and analysis to build on, but this report has drawn on what little there is, along with interviews with provincial government and utility officials who have developed these pacesetting programs, to provide a baseline snapshot of the Maritimes’ heat pump success story and some lessons for policymakers. 

There follows a brief overview of the technology itself and a sketch of global policy and market trends, followed by a more in-depth look at the policy tools, market forces and social conditions that have driven Maritime Canada’s emergence in heat pump adoption.

Heat pumps 101

There are a number of different types and a wide range of brands in the heat pump market, but all operate on roughly the same principles. Heat pumps are essentially heat exchange systems that absorb heat from one space and transfer it to another. Air-conditioners operate on this basic technology, but heat pumps simply allow for this process to operate in either direction—in addition to interior cooling, heat pumps can absorb heat from even cold outdoor air and transfer it to indoor spaces.

Air conditioner installed on a wooden facade.

In the Canadian marketplace today, the most common heat pump systems are central air-source heat pumps, ductless mini-split heat pumps (“mini-splits”), and ground-source heat pumps. Air-source heat pumps operate by principles similar to other central heating and cooling systems—the heat pump draws in heat from outside to a central unit, which then pushes heat to the rest of the interior through heating ducts. The process also works in reverse, pumping heat from inside a building to the outside world to cool the space. Mini-splits are also a kind of air-source heat pump, but they are better suited to buildings that do not already have duct systems installed. Instead, they carry heat through a coolant system to and from “indoor head” units mounted in each room. Ground-source heat pumps are technologically very similar to air-source versions, but they draw heat from below the earth’s surface instead of the air. 

Although heat pump systems of all types can be scaled to meet the heating needs of virtually any building size or type, it remains common in Canada for heat pumps to be paired with a backup—often a pre-existing boiler or electric baseboard system (this is the most common approach in the Maritime provinces to date). A new generation of cold-climate heat pumps, introduced into the marketplace over the last five to ten years, can operate efficiently at temperatures as low as -25C without back-up systems and are much better suited to Canadian winters. 

The playing field 

Global trends

The heat pump boom is global in scope: sales rose by 15 per cent worldwide in 2021 and continue to accelerate. Europe is leading the charge, with European Union countries alone installing two million units in 2021—an annual increase of 34 per cent—and then installing more than three million more in 2022, a further year-on-year increase of 40 per cent. The European boom predates Russia’s invasion of Ukraine but the task has now acquired much greater urgency.

Heat pumps were also specifically targeted for substantial incentives in the U.S. Inflation Reduction Act, which offers rebates to low- and middle-income households, as well as substantial tax credits.

Canadian trends

In Canada, heat pump adoption has been more sporadic and regional, but both federal and provincial emissions reduction and electrification plans assume a much more substantial role for heat pumps in the years ahead. 

As the Canadian Climate Institute reported in 2022, “The number of heat pumps installed in Canadian homes has risen steadily from 400,000 to 850,000 over the last 15 years. However, in the same period, the share of home heating provided by heat pumps has only risen from roughly four to six per cent. To hit projections under the Emissions Reduction Plan, their share of total heating load will need to double in the next eight years, to more than 10 per cent of home heating provided by heat pumps.” Doing so will require targeted policies that send clear signals to markets and consumers across Canada.

Some of these signals are already beginning to be put in place. Both the City of Vancouver and the province of Quebec have introduced partial bans on fossil-fuel heating systems—Vancouver for all new and replacement installations starting in 2025, Quebec for all new construction by the end of 2023. The most recent data on installations, meanwhile, found that, as of 2018, nearly 80 per cent of Canada’s heat pumps were operating in the two most populous provinces, Quebec and Ontario, although proportionally heat pumps accounted for less than 10 per cent of heating systems overall. (By 2021, heat pumps were the primary heating systems in  11 per cent of Quebec households and two per cent of those in Ontario.) During the same period, though, a new trend has emerged: the Maritimes anomaly. The pacesetting installation rates in New Brunswick, Nova Scotia and Prince Edward Island provide the clearest picture of how to rapidly accelerate the adoption of heat pump use in Canada. Let’s examine that picture more closely.

The Maritimes Anomaly

Origins and background

The rise of the Maritimes anomaly in heat pump adoption has been both recent and rapid. In New Brunswick, heat pumps were the primary heating source in 17 per cent of households in 2017; by 2021, that number had increased to 32 per cent of all New Brunswick residences. In Nova Scotia, the share increased from 14 per cent in 2017 to 21 per cent in 2021. And in Prince Edward Island, most dramatically of all, heat pump installations rose from just 9 per cent of households in 2017 to 27 per cent in 2021.)

Graph representing the share of Maritimes households relying on heat pumps as their primary heating system (%), which have tripled in certain provinces.

Although the region’s emergence as a heat pump pacesetter was far from inevitable, there were market, policy and social conditions in the Maritimes that made it particularly well suited to the technology. Energy poverty (the prevalence of households and communities facing major financial challenges to meeting their home energy needs) was very high—at least twice as common across the region as the Canadian average, according to the federal government. The Maritime provinces also have a climate well suited to heat pumps, even older models that were not specifically designed for cold climates; the moderating influence of the Atlantic Ocean means the region rarely faces conditions of extreme cold. And the most common household heating technologies—oil-burning furnaces and electric baseboards—each have qualities that make replacing them with heat pumps either enticing or relatively uncomplicated. In the case of heating oil, predominant in Nova Scotia and P.E.I., prices are volatile. In the case of electric baseboards, predominant in New Brunswick, large electrical panels already exist in a typical homes and can be adapted for heat pump systems without significant new wiring or costly upgrades.

Equally important for the recent heat pump boom was an institutional commitment to energy efficiency in general that predated the focus on heat pumps in particular. New Brunswick has operated efficiency programs—now gathered under the banner of its climate change secretariat—without interruption since 2008. P.E.I.’s efficiency office (later named efficiencyPEI) was also established in 2008. And in Nova Scotia, the provincial government established its arm’s-length efficiency agency, Efficiency Nova Scotia (now called EfficiencyOne) in 2010. 

These efficiency offices and programs were enormously helpful in the recent push for heat pump installations. They provided consistency and continuity in the face of periodic changes in government. And because they already delivered a variety of audits, programs and incentives for a range of household energy efficiency measures, they established strong, lasting relationships with residents, local heating system contractors, regulators and utilities. The New Brunswick government, for example, already had an identified list of certified installers before it ramped up its heat pump programs, and efficiencyPEI leads the country in household energy audits per capita. Put simply, governments in all three provinces were already experienced in delivering energy efficiency programs in advance of the heat pump boom, and utilities, regulators, contractors and households alike had already been engaged with consistency and stability in making home energy efficiency improvements to some degree. As one provincial official put it, a “strong culture” had emerged around efficiency in the region in advance of targeted heat pump policies.

The heat pump boom: incentives matter

In all three Maritime provinces, strong financial incentives in the form of grants and rebates provided the main catalysts for the dramatic recent increases in heat pump installations. Although energy efficiency in general had been incentivized across the region as far back as Natural Resources Canada’s first home efficiency retrofit programs, launched in 2007, direct incentives specifically for heat pumps were introduced much more recently.

The region’s first significant targeted incentives quickly demonstrated the strong demand for heat pumps in the region. NB Power, New Brunswick’s primary utility, introduced a $500 rebate on mini-split heat pumps in 2015. Approximately 13,000 households signed up in the first year, at which point the incentive was deemed a success beyond its initial intent and scaled down. In 2017, NB Power launched its Total Home Energy Savings program, which offered grants of up to $4,000 for a range of efficiency upgrades, including heat pumps. Nova Scotia’s EfficiencyOne introduced similar efficiency grants the same year. Heat pump adoption has been rapid and steady in both provinces since. P.E.I. introduced its first direct incentives for heat pumps in 2021, offering free systems to households living below an income threshold of $35,000 per year. The program has since increased the threshold to $55,000 and then $75,000. Heat pump adoption in all three provinces expanded rapidly in response.

In all three provinces, provincial incentives have since been “stacked” with federal programs to further boost adoption rates, particularly after the introduction of the Canada Greener Homes program in 2020, which provided grants of up to $5,000 to install heat pumps, and the 2022 Oil to Heat Pump Affordability (OHPA) program, which provided $5,000 rebates on heat pumps for households relying on oil-burning furnaces (which are the most common systems in both Nova Scotia and P.E.I.). The new OHPA grants piggyback on Nova Scotia’s $5,000 EfficiencyOne rebates, while New Brunswick, where very few households rely on oil-burning furnaces, now offers free mini-split systems to households with annual incomes below $70,000 through its Enhanced Energy Savings Program (a partnership of the provincial government and NB Power).

Lessons from the Maritimes anomaly

The most straightforward lesson from the Maritimes anomaly is there is no substitute for strong incentives, especially if they are targeted at lower income households, for whom the upfront-cost barrier of heat pump systems is particularly daunting. Money alone, though, is not the path to success. In all three provinces, heat pump incentives were packaged with or introduced alongside other efficiency measures. Conducting thorough energy audits not only identified households that would benefit the most from switching to a heat pump, it also established relationships between government agencies and residents. Offering rebates on insulation and other energy saving initiatives alongside the heat pump rebates has helped ensure that the systems work effectively once installed—offering cost savings to residents and leaving customers satisfied with the new heating systems. 

Aerial view of Bedford, a suburb of Halifax, Nova Scotia.

The importance of clear communications has also been cited by officials in all three provinces as a crucial component. In some jurisdictions, the savings heat pumps provide can be readily apparent—in New Brunswick, for example, where most households are served by NB Power for all their energy needs, the savings on energy bills was mostly self-evident. Customers switching from a semi-annual heating oil delivery bill to an increased monthly electricity bill, however, benefit from having the savings explained more clearly. 

More broadly, the switch from a tried-and-true heating source to a new and unfamiliar one is a major decision for a Canadian household. The behavioural psychology on making this kind of change is unequivocal—most people tend to overvalue the systems they have compared to a new approach (a phenomenon known as the “endowment effect”) and tend to resist becoming early adopters (due to status quo bias and numerous other common aversions to taking risks). Any obstacle or unanticipated issue along the way can discourage wider adoption of the technology.

The Maritimes anomaly offers examples of both effective communications and communications oversights, all of which are instructive. 

On the effective side, all three provinces appear to have done well at identifying reliable suppliers and installers and explaining the obvious benefits of free or heavily rebated heat pumps. Though these measures did not entirely eliminate the problem of unscrupulous contractors installing systems that were insufficient to the task (as noted below), they significantly reduced the prevalence of dissatisfied customers. 

In the case of New Brunswick, the heat pump rollout has been so effective that installers themselves are taking up part of the task—for example, offering their own financing packages and seasonal discounts on top of the rebates and grants. And in Nova Scotia, the introduction of heat pumps amid often-skyrocketing oil prices has led to prospective landlords prominently touting heat pumps as a beneficial feature of rental properties. The warming climate has assisted as well—in a region where very few households felt the need for air-conditioners historically, the heat pump’s added feature of interior cooling is beginning to prove attractive. (In warmer parts of the country, this aspect of the sales pitch will likely prove even more enticing.) 

There were, however, some significant errors and oversights, which varied from province to province. One common issue was the emergence of unreliable, “fly-by-night” installers eager to take advantage of the generous incentives. Officials in every province emphasized the importance of identifying reliable installers and providing better oversight—adding performance and installation standards to the building codes was one repeated recommendation. All as well pointed out that they could have put more effort into consolidating and streamlining the application and installation process—in P.E.I., for example, the most recent changes to the minimum income threshold for free heat pump systems generated instant demand that quickly overwhelmed their office’s ability to respond, an oversight they have had to scramble to correct. The current list of approved applications waiting for installations numbers in the thousands. And officials in New Brunswick noted that more effort could have been made to explain the costs and requirements of routine maintenance. 

Conclusion

Given the range of federal and provincial measures now in place across Canada to reduce greenhouse gas emissions, improve energy efficiency in buildings, and electrify space heating, the Maritimes anomaly will likely soon seem more like a headstart than an outlier. New Brunswick, Nova Scotia and P.E.I. have accelerated their adoption of the technology first, but it is expected to become a commonplace heating system coast to coast to coast, as either a stand-alone option or one that is supported by more traditional heating systems. The new generation of cold-climate heat pumps, which can operate efficiently without backup in all but the most ferocious of Canadian cold snaps, should further assist in making the case for the viability of the technology across the country. In the meantime, their progress provides a strong model. 

Overall, heat pumps have become an easy sell in the Maritime provinces thanks to a mix of the limits of existing technologies, the self-evident benefits they offer, the effectiveness of well-designed, easily accessed incentive programs, the amplifying effects of positive word-of-mouth, and the well-established appeal of deep discounts through government incentives. The rest of Canada would do well to learn from their successes and mistakes—and follow their lead.

Acknowledgements

The author would like to thank the following interview subjects and other experts for their time and expertise in assisting with this report: Peter T. Craig at EfficiencyOne (Nova Scotia); Jeff Hoyt and Susan Atkinson at the Government of New Brunswick; Beth Pollack at N.B. Power; Angela Banks, Brittany Ziegler and Erin Kielly at the Government of Prince Edward Island; Leslie Malone at Dunsky Energy; and Sachi Gibson, Jonathan Arnold, Jason Dion and Kate Harland at the Canadian Climate Institute.

This report also draws on background information, analysis and data found in the following publications: 

“The Future of Heat Pumps” (International Energy Agency, November 2022)

“Heating and Cooling Strategies in the Clean Energy Transition” (International Energy Agency/National Energy Board, May 2019)

Anna Kanduth, “Heat pumps can power major emissions reductions from buildings” (Canadian Climate Institute, 17 November 2022) 

“Market Snapshot: Steady growth for heat pump technology” (Canadian Energy Regulator, 21 February 2018)

 “Market Snapshot: Growing heat pump adoption – how does the technology work?” (Canadian Energy Regulator, 17 April 2019)