On March 29, 2022, the Minister of Environment and Climate Change of Canada unveiled the country’s Emissions Reduction Plan for 2030, which aims to reduce greenhouse gas emissions (the “Plan”)[1]. This is the first emissions reduction plan published under theCanadian Net‑Zero Emissions Accountability Act. The Plan includes new ambitious measures to substantially reduce greenhouse gas emissions: the goal is to reduce emissions by 40% to 45% below 2005 levels by 2030 and to achieve net‑zero by 2050.
The Plan includes new investments totaling 9.1 billion dollars in the following initiatives:
- Increased targets for sales of low‑emission vehicles. A new government sales mandate will require that at least 20% of new light‑duty vehicles sold be zero‑emission vehicles by 2026, and will set targets of at least 60% by 2030 and 100% by 2035. The government will also develop a regulation that will require all medium‑ and heavy‑duty vehicles sold to be zero‑emission vehicles by 2040. In the meantime, regulated sales targets will be established based on various vehicle categories, according to feasibility, and the government also indicated the possibility of exploring additional targets for the mid‑2020s.
- Expansion of the Incentives for Zero‑Emission Vehicles (iZEV) program. The federal government will provide an additional 1.7 billion dollars to expand iZEV to make electric vehicles more affordable and accessible.
- Additional charging stations for zero‑emission vehicles. An additional 400 million dollars will be allocated to fund charging stations for zero‑emission vehicles. The Canada Infrastructure Bank will also invest 500 million dollars in charging and refuelling infrastructure for zero‑emission vehicles.
- Electrification of a greater number of activities. The Government of Canada will work with provinces and utilities to establish a pan‑Canadian electricity transmission grid council, in order to promote investments in clean electricity infrastructure. In addition, the federal government plans to invest an additional 600 million dollars in the Smart Renewables and Electrification Pathways Program to support renewable electricity and transmission grid modernization projects, as well as 250 million dollars to support predevelopment work on large clean electricity projects.
- Renewal of 2.2 billion dollars for the Low Carbon Economy Fund.The renewal aims to spur further climate action by provinces and territories, municipalities, post‑secondary institutions, businesses and other organizations. In addition, a new 180 million dollar fund to support Indigenous leadership will finance clean energy and energy efficiency projects led by Indigenous peoples. The federal government will also invest 25 million dollars in Strategic Regional Initiatives that will boost economic prosperity and create sustainable jobs
- Reducing energy costs for homes and buildings. The strategy aims for the large‑scale retrofitting of the existing building stock and the construction of buildings meeting the highest net‑zero standards. The Canada Greener Homes Grant program will receive an additional investment of 458.5 million dollars. This initiative will enable Canadians to reduce their emissions and save money on renovations and heating and cooling costs, and will stimulate the creation of well‑paid jobs in the economy.
- Reducing carbon pollution in the oil and gas sector. The Plan presents modelling showing that the oil and gas sector could reduce its emissions by about 31% from 2005 levels by 2030. Following consultations with industry, the provinces, the partena of electricity transmission ires Indigenous peoples and civil society, a cap will be put in place to reduce emissions from the oil and gas sector. The government is also working to reduce methane emissions from the oil and gas sector by 75% by 2030.
- Measures to help industries develop and adopt clean technologies.Canada is currently developing a carbon capture, utilization and storage strategy, establishing an investment tax credit and investing 194 million dollars to expand the scope of the Industrial Energy Management System.
- Putting a price on pollution. The Plan requires the federal government to examine measures that would help ensure a price on pollution. It could adopt, in particular, certain investment‑based approaches (such as carbon contracts that would lock in future prices, which would remove investment risk for the private sector in low‑carbon projects) and explore various legislative approaches to support a durable price on pollution.
[1] Emissions Reduction Plan for 2030: Canada’s next steps for clean air and a strong economy
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