Federal Government Announces Strengthened Climate Plan

A Healthy Environment and a Healthy Economy

Canada’s strengthened climate plan to create jobs and support people, communities, and the planet

Background:

• As the Government of Canada continues to protect and support Canadians through the COVID-19 pandemic, it is also important that the country look to the future. Canadians want to see a growing middle class where no one is left behind. They want a future where their kids and grandkids have access to clean air and water. That future is within reach. Collectively, Canada needs to accelerate climate action to get there.
• A Healthy Environment and a Healthy Economy is Canada’s plan to build a better future. This plan builds on the Pan-Canadian Framework on Clean Growth and Climate Change. It continues down the path that Canadians, their governments, and businesses have been setting.
• This plan is a cornerstone of the government’s commitment in the 2020 Speech from the Throne to create over one million jobs, restoring employment to pre-pandemic levels. The plan includes 64 new measures and $15 billion in investments in addition to the Canada Infrastructure Bank’s $6 billion for clean infrastructure announced this fall as part of its growth plan.
• A Healthy Environment and a Healthy Economy will make life more affordable for households. It will make Canadian communities more livable. And it will, at every turn, focus on workers and their careers in a fair and just transition to a stronger and cleaner economy. The plan will do this through five pillars:
  • Making the places Canadians live and gather more affordable by cutting energy waste
  • Making clean, affordable transportation and power available in every community
  • Continuing to ensure pollution isn’t free and households get more money back
  • Building Canada’s clean industrial advantage
  • Embracing the power of nature to support healthier families and more resilient communities
    • By planting 2 billion trees and better managing, conserving and restoring natural spaces, Canada will protect and enhance the natural areas that surround us and that contribute to fighting climate change

 

Making the Places Canadians Live and Gather More Affordable by Cutting Energy Waste

Energy-efficient homes and buildings are more comfortable and cost less to power. This plan will make it easier for Canadians to improve the places in which they live and gather. This will cut pollution, make life more affordable and create thousands of good jobs and new careers in construction, technology, manufacturing and sales. To bring these benefits to communities, the government will:

• Invest $1.5 billion over three years for green and inclusive community buildings, and require that at least 10 percent of this funding be allocated to projects serving First Nations, Inuit and Métis communities.
• Provide $2.6 billion over seven years to help homeowners make their homes more energy efficient. This funding will provide grants of up to $5,000, up to one million free EnerGuide assessments, and support to recruit and train EnerGuide auditors.
• Work with the building materials sector and other stakeholders to develop a robust, low-emission building materials supply chain to ensure Canadian, locally-sourced products are available, including low-carbon cement, energy-efficient windows and insulation.
• Continue working with and building on successful provincial and territorial low-income retrofit programs to increase the number of low-income households that benefit from energy retrofits.
• Continue to work with provincial and territorial governments to develop a new model ’retrofit‘ code for existing buildings, by 2022, with the goal of collaborating with provinces and territories to have this code in place by 2025.
• Conduct Canada’s first-ever national infrastructure assessment, starting in 2021, to help identify needs and priorities in the built environment, and undertake long-term planning toward a net-zero emissions future.
• Invest $2 billion in financing commercial and large-scale building retrofits, which will be repaid by energy savings costs. This commitment is part of the CIB’s $10 billion Growth Plan.
• Develop a simple, low-cost loan program that integrates and builds on energy audits and grants to finance deeper home energy retrofits for homeowners.

 

Making Clean, Affordable Transportation and Power Available in Every Canadian Community

The government will expand the supply of clean electricity through investments in renewable and next-generation clean energy and technology, and encourage cleaner modes of transportation, such as low and zero-emission vehicles, transit and active transportation. This will make communities healthier, less congested and more vibrant.

To ensure Canadians have access to cleaner, more affordable transportation options, the government will:

• Invest an additional $287 million over two years to continue the Incentives for Zero-Emission Vehicles (iZEV) program until March 2022. The program provides a rebate of up to $5000 on a light-duty zero-emission vehicle.
• Invest an additional $150 million over three years in charging and refueling stations across Canada, as announced in the 2020 Fall Economic Statement.
• Work with partners in the year ahead on supply-side policy options to achieve additional reductions from Canada’s light-duty vehicle fleet, including regulations and investments to accelerate and expand the consumer availability of ZEVs in Canada as demand grows.
• Build on historic investments in public transit in the Investing in Canada Infrastructure Program to develop next steps on public transit, including the government’s plan to help electrify public transit systems, and provide permanent public transit funding.
• Engage the incoming United States Administration on approaches to increase the consumer availability of zero-emission vehicles in both countries, given the integrated nature of the North American auto sector.
• Work to align Canada’s Light-Duty Vehicle regulations with the most stringent performance standards in North America post-2025, whether at the United States federal or state level.
• Develop a national active transportation strategy, and explore ways to deliver more active transportation options, such as walking trails, cycling paths and other forms of active mobility, which are a complementary tool that can reduce reliance on cars and provide healthy transportation alternatives.
• Include the 100-percent tax write off for commercial light-duty, medium- and heavy-duty ZEVs.
• Implement Canada’s Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations to make new equipment and machines used by Canadians less polluting and more fuel-efficient.
• Further improve the efficiency of heavy-duty vehicles standards for post-2025 by aligning with the most stringent standards in North America—whether at the United States federal or state level.

 

And to make clean, affordable electricity options more available, the government will:

• Invest an additional $964 million over four years to advance smart renewable energy and grid modernization projects.
• Invest an additional $300 million over five years to advance the government’s commitment to ensure rural, remote and Indigenous communities that currently rely on diesel have the opportunity to be powered by clean, reliable energy by 2030.
• Work with provinces and territories to connect parts of Canada that have abundant clean hydroelectricity with parts that are currently more dependent on fossil fuels for electricity generation—including by advancing strategic intertie projects, such as the Atlantic Loop and other regional initiatives. The Canada Infrastructure Bank has earmarked $2.5 billion as part of its $10 billion Growth Plan. The government will invest an additional $25 million to support predevelopment work.
• Work with provinces, utilities and other partners to ensure that Canada’s electricity generation achieves net-zero emissions before 2050.

 

Continuing to Ensure Pollution Isn’t Free and Households Get More Money Back

Canada has proven that putting a price on carbon pollution and returning the proceeds back to households can meet our economic needs and our environmental goals at the same time. We cannot grow the economy we all want and need if it’s free to pollute. Moving forward, the government proposes to:

• Continue to put a price on pollution through to 2030, rising at $15 per tonne after 2022, while returning the proceeds back to households such that the majority receive more money back than they pay in provinces where the federal system applies.
• Move from carbon pollution pricing rebate payments being distributed on an annual basis to quarterly, starting as early as 2022.
• Explore the potential of border carbon adjustments, and work with like-minded economies—including the E.U. and Canada’s North American partners—to consider how this approach could fit into Canada’s broader strategy to meet climate targets while ensuring a fair environment for businesses.
• Review the standards used to assess provincial systems, also known as the federal “benchmark criteria”, and engage with provinces and territories as well as with Indigenous Peoples on these proposals over the coming months.

In the context of the continued increase to the carbon price, the scope of the Clean Fuel Standard has been narrowed to cover only liquid fossil fuels. This is a progression in the design of the Clean Fuel Standard from its initial discussion in 2016, when it was proposed that the new measure would cover liquid, gaseous and solid fuels.

 

Building Canada’s Clean Industrial Advantage

In the years ahead, Canada’s industrial advantage and the jobs that will come from it will depend on the speed and success of decarbonisation efforts. In order to achieve the country’s full potential, the government must assist Canadian companies as they seek to meet the demands of domestic and global consumers for low-carbon goods and services, and make investments that can drive Canada’s low-carbon economy.

That is why the government will:

• Launch a Net-Zero Challenge for large emitters to support Canadian industries in developing and implementing plans to transition their facilities to net-zero emissions by 2050.
• Make investments to support decarbonization and drive the immediate creation of well-paying, resilient jobs, in complement to the Challenge. This would involve the Strategic Innovation Fund’s Net-Zero Accelerator Fund, through an investment of $3 billion over five years. The fund will rapidly expedite decarbonization projects with large emitters, scale-up clean technology and accelerate Canada’s industrial transformation across all sectors.
• Use proceeds collected from the Output-Based Pricing System (OBPS) for industry to further support industrial projects to cut emissions and use cleaner technologies and processes.
• Invest $1.5 billion in a Low-carbon and Zero-emissions Fuels Fund to increase the production and use of low-carbon fuels (e.g., hydrogen, biocrude, renewable natural gas and diesel, cellulosic ethanol) in a manner that complements federal carbon pollution pricing, regulatory efforts and other federal programming.
• Introduce Canada’s Hydrogen Strategy, which sets out a path for integrating low emitting hydrogen across the Canadian economy, before the end of the year.

 

The government will also:

• Propose to strengthen Canada’s approach to reducing methane emissions from the oil and gas sector by establishing new targets and associated regulations for 2030 and 2035, based on international best practices. The design of the amended federal regulations to achieve additional reductions in 2030 and 2035 will be determined through consultations with provinces, territories, the oil and gas industry and civil society.
• Invest $165.7 million over seven years to support the agriculture sector in developing transformative clean technologies and help farmers adopt commercially available clean technology.
• Set a national emission reduction target of 30 percent below 2020 levels from fertilizers and work with fertilizer manufacturers, farmers, provinces and territories, to develop an approach to meet it.
• Continue to support Sustainable Development Technology Canada with an additional $750 million over five years. This would support startups and scale-up companies to enable pre-commercial clean technologies to successfully demonstrate feasibility as well as support early commercialization efforts.
• Leverage the Government of Canada’s purchasing power to support emerging clean technologies across Canada’s economic sectors, such as technologies to reduce emissions in federal buildings and reduce embodied carbon in construction materials. This would be part of the updated greening government strategy.
• Work with small businesses to get their feedback on all potential ways to further support them in taking action to reduce emissions, including through rebates, targeted investments, and other supports.
• Continue helping Canadian businesses navigate available federal resources and measures, understand their environmental outcomes, while exploring opportunities to integrate into supply chains of larger private and public purchasers, and expand their reach in Canadian and global markets.
• Develop new federal regulations to increase the number of landfills that collect and treat methane, and ensure that landfills already operating these systems make improvements to collect all they can.

Embracing the Power of Nature to Support Healthier Families and More Resilient Communities

Just as nature is under threat from climate change, it is also an ally in the fight against it. By planting two billion trees and better conserving and restoring our natural spaces, the government will cut pollution, clean the air we breathe, make communities more resilient and increase access to natural spaces. The government will also create thousands of jobs in areas such as tree planting, urban planning and tourism. The government will:

• Invest up to $3.16 billion over 10 years, to partner with provinces, territories, non‑government organizations, Indigenous communities, municipalities, private landowners, and others to plant two billion trees.
• Invest up to $631 million over 10 years to work with provinces, territories, conservation organizations, Indigenous communities, private landowners, and others to restore and enhance wetlands, peatlands, grasslands and agricultural lands to boost carbon sequestration.
• Provide $98.4 million over 10 years to establish a new Natural Climate Solutions for Agriculture Fund.
• Continue to support partnerships with Indigenous communities across the country through the establishment of new Indigenous Protected and Conserved Areas and Indigenous Guardians programs.

 

Additional Measures:

The plan also commits to developing Canada’s first-ever national adaptation strategy. It contains new measures to support Indigenous climate leadership. It will support a strong Canadian contribution toward international climate action. Every dollar spent in the post‑pandemic stimulus plan outlined in the Fall Economic Statement—amounting to three to four percent of GDP—will be assessed for its effectiveness in furthering the goals of this plan. The plan also commits to applying a climate lens to integrate climate considerations throughout government decision-making.

 

Next Steps:

A Healthy Environment and a Healthy Economy builds on continuing work through the Pan‑Canadian Framework on Clean Growth and Climate Change. The Pan‑Canadian Framework has done more to cut pollution in a practical and affordable way than any other climate plan in Canada’s history. Taken together with the Pan‑Canadian Framework, this means Canada will exceed its 2030 greenhouse-gas-reduction target—making it the first time ever this country has set a climate target and outlined a path to not only meet it but exceed it.

The plan will also establish the right building blocks to get to net zero by 2050 so that our kids and grandkids can grow up in a country with clean air and water.

Moving forward, the federal government will consult with provinces and territories, Indigenous partners, and Canadians in all socio-economic sectors to further elaborate a strong plan for a healthier environment and economy that we can implement together. By further working with provinces and territories, the government is confident Canada can achieve reductions within the range of 32 to 40 percent below 2005 levels in 2030. So let’s keep working together to build a healthier environment and healthier economy.