431-00173 (Environment)

Arresting the growth in oil sands expansion.

Natural Resources Canada supports the sustainable development of the oil sands sector while building a low carbon, environmentally responsible, and climate-resilient economy. The Government of Canada is advancing a plan to further improve Canada’s petroleum sector into a “best-in-class” producer of the world’s cleanest petroleum, in line with net-zero objectives. This involves developing strategies to foster innovation, electrification, product diversification, investment and helping workers make the transition to other workplace opportunities. 

The responsibility to regulate oil sands resource development lies with the provinces. In particular, the Government of Alberta has created legislation to cap or limit GHG emissions for all oil sands production to 100 megatonnes (Mt) per year through the Oil Sands Emissions Limit Act.

In 2017, Canada’s total oil sands emissions were 81 Mt, of which 72Mt were from Alberta’s oil sands. This does not include emissions exempted by the Act (i.e. new upgrading, cogeneration and primary production).

The sector has made significant improvements in technology and efficiency, with emissions per barrel decreasing by 28% between 2000 and 2017. Canada’s petroleum sector is a leading investor in clean technology and innovation to support emissions reductions and improve air and water usage.

Innovation is critical to reducing the environmental footprint of oil sands development. Natural Resources Canada supports this innovation by funding research and development and by providing scientific information and advice to government policy makers and regulators. In fact, the Government of Canada has committed $200M annually to support research and innovation through the Clean Growth Program, federal lab networks, including the CanmetENERGY Devon Lab in Edmonton, as well as through agencies such as Sustainable Technology Development Canada.

In addition, the Government of Canada is investing $100M in the Clean Resource Innovation Network (CRIN), to drive environmental improvements in air, land, and water use across Canada’s petroleum sector. CRIN is a network of oil and gas industry professionals, innovators, financiers, policy makers, incubators, accelerators, academics and students working to commercialize breakthrough technology and innovation. 

Even under the most ambitious scenarios for renewable energy, the International Energy Agency (IEA) forecasts a continued need for oil and gas for decades to come. Specifically, the IEA expects oil production of between 66 and 104 million barrels per day (mb/d) in 2040 and demand of between 66 to 106 mb/d. This is why the Government of Canada continues to work with industry to lower the carbon footprint of fossil fuel products.

Working with the provinces to phase out coal-fired electricity

Recognizing the impacts of coal-fired electricity generation to human health and climate change, the government committed to phasing it out by 2030. The government also recognizes that this decision would greatly affect workers and communities that rely on coal production and is committed to leaving no worker and no community behind. That is why the government established the Task Force on Just Transition for Canadian Coal Power Workers and Communities—to engage communities and recommend a path forward.

The government remains committed to helping workers and communities prepare for the challenges and opportunities that the low-carbon energy economy will present. That means ensuring that workers have the right tools and skill sets essential to building a sustainable and prosperous future for Canada.

To that end, the government has committed $185 million in Budgets 2018 and 2019, including $35 million for the Canada Coal Transition Initiative (CCTI) to support skills development and economic diversification, and $150 million for an infrastructure fund, beginning in 2020/21, to support economic diversification. Under the CCTI, the Government of Canada has invested over $14 million in 15 projects across Saskatchewan and Alberta, and 8 projects across New Brunswick and Nova Scotia.

Building a prosperous, decarbonized economy.

It is integral that the government addresses climate change in partnership with our energy sector. There is a path forward to a prosperous, net-zero future and the Government of Canada is working with Canadians to build it.

Natural Resources Canada leads on about half of the fifty actions being taken under the Pan-Canadian Framework on Clean Growth and Climate Change, including investing in clean energy innovation, modernizing electricity grids and storage facilities, charging infrastructure for zero-emission vehicles (ZEVs), and new national energy codes for homes and other buildings.

Specifically, The Smart Grids Program is modernizing electricity grids and storage facilities to make it easier to integrate renewable energy sources. The Emerging Renewables Program funds the deployment of innovative renewable technologies, including tidal and geothermal. The Clean Energy for Rural and Remote Communities Program is helping Indigenous communities shift from a reliance on diesel fuel to more renewable energy sources. In addition, the government has expanded tax support for clean energy projects to further encourage investment and promote the use of energy-efficient equipment.

With 17% of Canada’s GHG emissions coming from residential, commercial and institutional buildings, the construction sector will be an important part of the low-carbon transition. In August 2017, Natural Resources Canada released Build Smart: Canada’s Buildings Strategy in collaboration with the provinces and territories. Build Smart outlines Canada’s plan to transform its built environment and establishes commitments by all levels of government to make homes and buildings more energy-efficient. The Government of Canada also earmarked over $1 billion in Budget 2019 for the Green Municipal Fund, which will support local energy efficiency improvements and greenhouse gas reductions.

All of these initiatives will create jobs and opportunities for Canadians, while positioning the energy industry to help build the global low-carbon economy. But there is more work to do. The government is identifying the best ways to exceed its 2030 emissions reduction target and achieve net-zero emissions by 2050, while creating good jobs and making life more affordable for Canadians. It will continue to work with the provinces and territories, communities, workers and Indigenous Peoples to bring forward measures to ensure that Canada’s transition to a low-carbon economy is inclusive and beneficial to all.

4. Ending thermal coal exports

As Canada works towards a low carbon economy, it continues to be a strong proponent of a rules-based multilateral trading system, which includes those rules that govern export restrictions. Under the World Trade Organization (WTO), Members have agreed not to prohibit or restrict the export of goods, except in specific scenarios such as to relieve critical shortage of essential goods. Provisions on the prohibition or restriction of exports have also been included in Canada’s Free Trade Agreements (FTAs). These provisions are critical for preventing unnecessary barriers to trade and the disruption of global supply chains.

Environmental protection is an important priority for Canada, both domestically and internationally.  The Government of Canada is firmly committed to the principle that a clean environment and a strong economy go hand in hand. The Government of Canada promotes the objective that trade and protection and conservation of the environment should be mutually supportive, as part of an inclusive approach to trade. To this end, Canada will continue to pursue an approach to trade that not only results in more open markets, but also ensures that environmental protection is upheld.

To contribute to the achievement of the Paris Agreement, and in pursuit of efforts to limit the temperature increase to 1.5°C above pre-industrial levels, the Government of Canada is committed to exceed Canada’s 2030 emissions reduction goal of reducing greenhouse gas (GHG) emissions by 30% below 2005 levels and achieving net-zero emissions by 2050. Canada’s climate plan, the Pan-Canadian Framework on Clean Growth and Climate Change, adopted on December 9, 2016, is a comprehensive plan which includes both individual and joint federal, provincial and territorial climate actions to reduce emissions, accelerate clean economic growth, and build resilience to the impacts of climate change. This plan was developed in collaboration with provinces and territories, and with input from Indigenous Peoples, businesses, civil society and Canadians across the country.

The Pan-Canadian Framework outlines over 50 concrete measures to reduce carbon pollution, help us adapt and become more resilient to the impacts of a changing climate, foster clean technology solutions, and create good jobs that contribute to a stronger economy.

Pricing carbon pollution is a central pillar of the Pan-Canadian Framework, and is the most efficient way to reduce greenhouse gas emissions. The Pan-Canadian Approach to Pricing Carbon Pollution is designed to ensure there is a consistent price on greenhouse gas emissions in all jurisdictions across Canada, with increasing stringency over time. The approach gives provinces and territories the flexibility to implement their own carbon pricing systems as long as they meet minimum stringency criteria. The federal carbon pollution pricing system applies in any jurisdiction that requests it or that does not implement its own system that meets the federal requirements. The carbon price is currently set at $30 per tonne of CO2e emissions, rising by $10 annually until it reaches $50 per tonne in 2022. The approach will be reviewed in 2022 to determine the path forward.

Other key measures in the Pan-Canadian Framework include:

• federal regulations to phase out coal fired electricity by 2030 and set performance regulations for natural-gas fired electricity;
• working with provinces to put Canadian electricity generation on a path towards 90 per cent non-emitting sources by 2030, while supporting workers and communities in the transition to a low-carbon economy;

• implementing a Clean Fuel Standard to reduce GHG emissions across the lifecycle of fossil fuels used in transportation, buildings and industry
• regulating methane emissions in the oil and gas sector, which will reduce carbon pollution by about 16.5 million tonnes in 2030;
• developing “net-zero energy ready” building codes to be adopted by 2030 for new buildings;
• establishing mandatory labeling of building energy use to provide businesses and consumers with information on energy performance, and setting new standards to improve the energy efficiency of appliances and equipment;
• increasing the stringency of emissions standards for light- and heavy-duty vehicles, and taking steps to improve efficiency and support fuel switching in the rail, aviation, marine and off-road sectors;
• adopting a Climate Lens to ensure that future climate impacts are considered and addressed in federally funded infrastructure projects; and,
• establishing a new Canadian Centre for Climate Services, giving Canadians better access to climate science and information.

The Government of Canada recognizes the importance of tackling climate change while growing the economy as a means of creating jobs and ensuring competitiveness. Since 2015, the Government of Canada has committed about $60 billion to reduce emissions, adapt to a changing climate, protect the environment, and support clean technology innovation and the transition to a clean growth economy. Commitments include:

• More than $28 billion to support public transit, including over 1,211 transit projects approved;
• $26.9 billion to support green infrastructure, including support for renewable energy, electric vehicle charging, natural gas and hydrogen refuelling stations, clean energy in rural and remote communities, and climate adaptation and resiliency initiatives (e.g., flood mitigation under the $2-billion Disaster Mitigation and Adaptation Fund);
• $3 billion to support the development, adoption and scale-up of clean technologies;
• Over $2 billion to help cities and towns adapt to and manage the impacts of climate change, delivered through the Federation of Canadian Municipalities (e.g., $75 million for the Municipal Climate Innovation Program, $50 million for the Municipal Asset Management Program, and over $1 billion in support for building energy efficiency investments);
• $2 billion to generate clean growth and reduce carbon pollution from buildings, industries, forestry, and agriculture by leveraging investment in projects through the Low Carbon Economy Fund;
• The $1.5 billion Oceans Protection Plan, to improve marine safety and responsible shipping;
• $1.3 billion for nature conservation;
• $300 million to provide Canadian drivers and businesses with purchase incentives for zero-emission vehicles;
• Over $64 million to help rural, remote and Indigenous communities transition off diesel fuel;
• $108 million to establish the Canadian Centre for Climate Services, which is improving access to trusted, useful and timely climate information and data to support adaptation decision-making; and
• Over $100 million in targeted federal funding to support specific economic sectors (such as transportation, agriculture, and health) and communities, including Indigenous and Northern communities (e.g., $52 million for the First Nations Adapt Program and $47 million for Climate Change Preparedness in the North).

Canada’s 2019 GHG emissions projections show a widespread decline in projected emissions across the economy reflecting the breadth and depth of the Pan-Canadian Framework. However, the science is clear, global emissions must reach carbon neutrality by 2050 to limit warming to 1.5°C. The Government of Canada recognizes these findings and agrees that more work is needed. As such, the Government of Canada is committed to implementing the Pan-Canadian Framework while strengthening existing and introducing new climate actions to exceed Canada’s 2030 emission reduction target. The Government is also committed to putting Canada on a path to achieve a prosperous net-zero emissions future by 2050. This includes setting legally binding five-year emission-reduction milestones based on the advice of experts and Canadians.

The Government of Canada recognizes that more action is needed. Additional new climate measures include:

• Working with businesses to make Canada the best place to start and grow clean technology companies;
• Completing all flood maps in Canada;
• Planting two billion incremental trees over the next 10 years as part of a broader commitment to nature-based solutions that also encompasses wetlands and urban forests; and
• Introducing a new ambitious plan to conserve 25 per cent of Canada’s land and 25 per cent of Canada’s oceans by 2025, working toward 30 per cent of each by 2030. This plan will be grounded in science, Indigenous knowledge and local perspectives.

The federal government will look to the advice of experts and consultations with Canadians to ensure the path to net-zero is sensitive to the needs of our country, grows the economy and makes life more affordable. Achieving Canada’s climate goals will require nothing short of a transformation of the Canadian economy, with corresponding impacts on and opportunities for Canadian workers.

Net-zero doesn’t mean shutting down Canada’s oil and gas sector but rather developing Canada’s natural resources in cleaner, more sustainable ways. The Government of Canada will continue to ensure this sector remains competitive.

Important parts of Canada’s economy have been built on our natural resources sector and the workers across the country who have powered it for generations. The government is committed to developing our natural resources sustainably and to creating good, middle class jobs. A strong economy and clean environment must go hand in hand.

Several of Canada’s largest energy companies are already planning for a net-zero future. These companies also understand the economic opportunities created by progressively reducing emissions and moving toward net-zero from investment opportunities in renewable energy, fuel and maintenance costs savings by switching to zero-emissions vehicles, and exporting clean technologies and expertise to other countries. These existing and emerging technologies will be crucial for accelerating progress to decouple emissions from economic growth. The Government is dedicated to continuing to work with project proponents on advancing innovation and making Canada the cleanest oil and gas producer in the world.

The Canadian economy is currently facing important challenges in light of the COVID-19 pandemic situation. The Government of Canada’s number one priority remains keeping Canadians safe and supporting families and businesses through this extraordinary time. To help Canadians and businesses, the government has announced support through the COVD-19 Economic Response Plan, which provides immediate help to Canadians and businesses that need it most.

The Government of Canada also recognizes that changes to our environment present a threat to our long-term health and economic prosperity. As such, the federal government announced that it will provide up to $1.72 billion to clean up orphan and/or inactive oil and gas wells in British Columbia, Alberta and Saskatchewan, creating and maintaining thousands of jobs and generating lasting environmental benefits. In addition, the Government of Canada will provide up to $750 million to create a new proposed Emissions Reduction Fund to reduce emissions in Canada’s oil and gas sector, with a focus on methane. This fund will provide primarily repayable contributions to conventional and offshore oil and gas firms to support their investments to reduce GHG emissions. 

In addition, climate conditions have been built into new financial support for businesses. On May 12, 2020, the Government of Canada announced support for large and medium-sized businesses through the establishment of a Large Employer Emergency Financing Facility (LEEFF) to provide bridge financing to Canada’s largest employers whose needs during the pandemic were not being met through conventional financing to keep their operations going. Recipient companies will be required to commit to publish annual climate-related disclosure reports consistent with the Financial Stability Board’s Task Force on Climate-related Financial Disclosures including how their future operations will support environmental sustainability and national climate goals.

As the economy recovers, the Government of Canada will continue effective, transparent, and efficient policy approaches to reduce the greenhouse gas emissions that cause climate change, protect our environment, and position Canada for clean growth.