Canada’s 2030 Emissions Reduction Plan - Chapter 1

There is an urgent need to address climate change and move towards a low-carbon economy. At current rates, global warming of 1.5°C will likely be reached between 2030 and 2052, and it is only with urgent, deep reductions in greenhouse gas (GHG) emissions that global warming can be limited to below 2°C. There is also an urgent economic and social need to make sure nearCanada prospers and that people succeed as we reduce carbon pollution. Meeting Canada’s 2030 and 2050 climate objectives will create good, middle-class jobs, and grow a competitive, sustainable and inclusive economy.

The scientific imperative

Canada is warming at twice the global average, with the North warming three times as fast. The effects of widespread climate change are evident in many parts of Canada and are projected to intensify in the future, including some weather extremes. The rate and magnitude of climate change under high versus low emission scenarios project two very different futures for Canada^{Footnote 1}. Scenarios with large and rapid warming illustrate the profound effects on Canadian climate of the continued growth in GHG emissions. But scenarios with limited warming will only occur if Canada and the rest of the world take action to reduce carbon emissions to net zero early in the second half of the century and reduce emissions of other greenhouse gases substantially. 

With deadly heatwaves and devastating wildfires and flooding, the cost and impact of inaction on Canadians’ lives and livelihoods is far too high. According to the Canadian Climate Institute, the number and cost of catastrophic weather events in the past decade alone were twice as high as those recorded in the previous decades combined (that is, 1983 to 2009). A report from Health Canada, Health of Canadians in a Changing Climate: Advancing our Knowledge for Action, notes the likelihood of extreme days of heat (over 30°C) have increased from one to three days annually, increasing the likelihood of death in Canadian cities by 2% to 13%.

Insured catastrophic losses in Canada
*A catastrophic loss = 1 event costing $25 million or more in insured damages

Source: IBC Facts Book, PCS, CatIQ, Swiss Re, Munich Re & Deloitte
Values in 2020 $ CAN, * 2021 preliminary

The climate momentum

Across the world, momentum for increased global climate action continues to build among governments, businesses, and individuals. Net-zero commitments are rapidly proliferating, with commitments in place by countries accounting for 88% of global emissions, 90% of global GDP and 85% of global population.^{Footnote 2} The United Nations recently reported that cities and regions with a carbon footprint greater than the emissions of the United States, and companies with a combined revenue of over $11.4 trillion (equivalent to more than half of the US GDP), are now pursuing net-zero emissions by the end of the century.^{Footnote 3} The increased momentum for collaborative climate action was highlighted at the 26th Conference of Parties in Fall 2021, where countries committed to numerous ambitious climate commitments related to key actions like phasing out the use of coal, halting and reversing forest and land degradation, and accelerating the transition to net-zero cars and vans by 2040.

Within Canada, increased climate momentum has also been building. Over the past few years, several provinces and territories, such as British Columbia, Prince Edward Island, and Quebec have made net-zero commitments, as well as major cities like Toronto, Halifax, and Vancouver. For decades, Indigenous Peoples have shown climate leadership, with many Indigenous leaders and communities reinforcing the need to take action to reduce pollution, adapt to the impacts of climate change, and improve the ways in which the natural environment is respected and protected. Major Canadian businesses have made commitments and are taking action to reduce their emissions. Finally, public opinion research from Abacus Data also shows that more Canadians today believe that the earth is warming when compared to 2015, and more people today see the benefits of fighting climate change when compared to 2018.^{Footnote 4}

The economic imperative

With each passing year, it becomes clearer that moving to a clean, net-zero economy will drive Canada's economic growth and create good jobs across the country. G lobal investments in climate solutions are growing at a rapid pace. BloombergNEF tallied global investment in the low-carbon energy transition at US$755 billion last year, up 27% from $595 billion in 2020. In addition, US$165 billion was raised from global public equity markets by companies offering climate solution technologies.^{Footnote 5} Economic data also show that returns on investments in climate solutions are increasingly profitable and predictable. For example, the International Energy Agency and Imperial College Centre for Climate Finance and Investment found that across all portfolios, renewable power generated higher total returns relative to fossil fuels.^{Footnote 6} Additionally, the Bank of Canada and the Office of the Superintendent of Financial Institutions found that delayed climate action in the short-term could lead to higher costs in the future.^{Footnote 7}

As countries and businesses race toward net-zero, it is critical that Canada lead, rather than risk being left behind. To create good jobs, grow a strong economy, and build a bright, healthy future for everyone, enhanced domestic climate action is needed today.

By 2025, clean tech's contribution to Canada's GDP is expected to grow to $80 billion from $26 billion in 2016. And this year, global clean technology activity is expected to exceed $2.5 trillion. Canadians have the know-how and the skills to make Canada a destination of choice for investments in a low-carbon solutions and grow Canada's competitiveness.

Canada's leadership

On June 29, 2021, the Canadian Net-Zero Emissions Accountability Act (the Act) became law. The Act marks the first time a Canadian government has legislated emissions reductions accountability to address climate change. The Act sets legal requirements for current and future governments to plan, report, and course correct on the path to net-zero emissions by or before 2050. It enshrines in legislation Canada's 2030 Nationally Determined Contribution under the Paris Agreement, which is to reduce emissions by 40 to 45% below 2005 levels, as announced by Prime Minister Trudeau in April 2021. It also enshrines in legislation Canada's commitment to set national targets for the reduction of greenhouse gas emissions every five years with the objective of attaining net-zero emissions by 2050.

This 2030 ERP is the first of many ERPs and related reports that the Government of Canada will develop pursuant to the Act. Three progress reports—in 2023, 2025, and 2027—will provide an update on progress to implement the measures and strategies outlined in the following chapters. Additionally, the Government will prepare ERPs at least 5 years in advance of each successive national GHG emissions reduction target year (for example, the next ERP will be established in 2030 to achieve the 2035 target).

On this and future reports, e ngagement with provinces and territories, Indigenous Peoples, the Net-Zero Advisory Body, industry, civil society and Canadians is and will continue to be integral.

The 2030 ERP is an evergreen plan, and the Government of Canada will continue to adapt it as new opportunities arise and promising pathways to Canada’s 2030 target and net-zero emerge.

1.1. Canada’s Emissions Profile

Canada’s current emissions profile and historical trends help provide a picture of where Canada needs to be by 2030 and 2050. According to Canada’s most recent National Inventory Report (NIR), total national greenhouse gas (GHG) emissions in 2019 were 730 million tonnes of carbon dioxide equivalent (Mt CO_2e). Oil and gas and transportation continue to be Canada’s largest sectoral emissions sources, with buildings, heavy industry, and agriculture following closely behind. Canada’s 2019 emissions were approximately 9 Mt lower than in 2005. Since 2005, emissions in the oil and gas and transport sectors have increased by 20% and 16%, respectively. Decreases in emissions from electricity (48%), heavy industry (12%) and waste and others (10%) have offset these increases.

Breakdown of Canada's GHG Emissions by Economic Sector

Canada is growing its economic output while decreasing the amount of emissions associated with economic activities. Specifically, economy-wide emissions intensity (GHG per GDP) has declined 37% since 1990, and by 23% since 2005, due in large part to key policies and measures, such as carbon pollution pricing, that led to fuel switching, increases in efficiency, the modernization of industrial processes, and structural changes in the economy.

Canadian greenhouse gas emissions and indexed trend emission intensity (excluding Land-Use Change and Forestry)

*Indexed trend emission intensity refers to the year to year fluctuations that are superimposed over actual trends observed over a longer time period, showing that Canada’s economy has grown more rapidly than its GHG emissions.

1.2. Progress to date: How Canada is bending the emissions curve

Canada has made progress fighting climate change, bending the emissions curve, and putting policies in place that will be fundamental to achieving net-zero emissions by 2050. In 2015, Canada and 194 other countries concluded negotiations on the Paris Agreement. Over the past 6 years, Canada has invested over $100 billion and introduced over 100 measures in support of climate-related commitments.

In 2016, First Ministers adopted the Pan-Canadian Framework on Clean Growth and Climate Change (PCF), Canada’s first ever national climate plan with input from Indigenous Peoples. The PCF sets in place Canada’s foundation for reaching its 2030 and 2050 targets, and many of the actions set out under the plan are still ongoing.

Building on the PCF, the Government released its Strengthened Climate Plan (SCP)—A Healthy Environment and a Healthy Economy—in December 2020. Supported by an investment of $ 15 billion, the SCP introduced a suite of emissions reduction measures across all sectors of the economy. Investments and efforts are already yielding results. For example:

• Canada’s historic investments in public and active transit resulted in progress on key transit projects, such as supporting the purchase of 358 new hybrid busses in Mississauga, Ontario and major public transit projects like the Ontario Line in Toronto, Surrey Langley Skytrain in Vancouver, and Blue Line in Montreal
• To date, over 136,000 Canadians and Canadian businesses have taken advantage of the federal incentive to purchase a zero-emission vehicle
• Investments in EV chargers and refuelling stations have supported the installation of more than 22,500 EV chargers, 15 hydrogen stations, and 21 natural gas stations, with a goal to install 34,000 more chargers and stations by 2024
• Canada’s electricity grid is over 82% emissions-free—one of the cleanest in the world—and is on track to meet its goal of having 90% non-emitting electricity generation by 2030
• Canada committed $165.7 million to the Agricultural Clean Technology Program which since its launch in June 2021 has supported the adoption of 79 green energy and energy efficiency, precision agriculture, and other clean technologies on Canadian farms

While some measures remain early in their implementation curves, data show that efforts are already paying off. Before the PCF, emissions in 2019 were projected to be 764 Mt; but, due in large part to measures in the PCF, actual emissions were 34 Mt lower. This trend was strengthened with the release of the SCP, which projected emissions to be 31% below 2005 levels in 2030.

The measures and policy signals in this 2030 ERP build on these important actions to date. Continued ambition and collaboration every step of the way—with Indigenous partners, provinces and territories,  businesses, experts, civil society, and Canadians – will help build a stronger, cleaner and healthier Canada.