Canada wrapped up an eventful year 2016 on its climate change file. On the heels of the meeting of First Ministers in March 2016 (which resulted in the Vancouver Declaration), the federal government signed the Paris Agreement when it was opened for signature on 22 April 2016. Efforts continued on developing a pan-Canadian climate change strategy, which culminated in the announcement of a pan-Canadian carbon price on 3 October 2016, ratification of the Paris Agreement on 5 October 2016 and the release of the Pan-Canadian Framework on Clean Growth and Climate Change (the Framework) by the First Ministers’ following their meeting on 9 December 2016. Notably, Saskatchewan was the only province which declined to adopt the Framework.
The Framework is based on the principles set out in the Vancouver Declaration, which outlined a collaborative approach to meet or exceed Canada’s 2030 target of 30% below 2005 levels of greenhouse (GHG) emissions and enable sustainable growth, while recognizing the need for fair and flexible approaches to support the diversity of provincial and territorial economies. The Framework has four main pillars:
- Pricing carbon pollution – an efficient way to reduce emissions, drive innovation, and encourage people and businesses to pollute less;
- Complementary measures to further reduce emissions across the economy – such measures can address market barriers where pricing alone is insufficient or not timely enough to reduce emissions in the pre-2030 timeframe;
- Measures to adapt to the impacts of climate change and build resilience – this will help to ensure that infrastructure and communities are adequately prepared for climate risks such as floods, wildfires, droughts and extreme weather events, particularly in Indigenous, northern, coastal and remote communities; and
- Actions to accelerate innovation, support clean technology, and create jobs – by positioning Canada as a global leader in clean technology, Canada will remain internationally competitive and new jobs will be created across the country.
The Framework builds on provincial and territorial efforts to reduce GHG emissions and sets out actions under each of the Framework’s pillars. These actions include:
- developing new building codes to ensure that buildings use less energy, thus saving money for households and businesses;
- deploying more electric charging stations to support zero-emitting vehicles, which is an integral part of the future of transportation;
- expanding clean electricity systems, promoting inter-ties, and using smart-grid technologies to phase out the reliance on coal, make more efficient use of existing power supplies, and ensure a greater use of renewable energy;
- reducing methane emissions from the oil and gas sector;
- protecting and enhancing carbon stored in forested lands, wetlands and agricultural lands; and
- driving significant reductions in emissions from government operations.
To promote clean growth, the federal government (in collaboration with the provinces and territories) will be investing in green infrastructure, public transit, and clean technology and innovation, as well as promoting efforts to reduce the reliance of remote and northern communities on diesel by connecting them to electricity grids and implementing renewable energy systems.
Provincial and territorial officials have been tasked with implementing the Framework and will report back to the First Ministers within a year, and annually thereafter. Federal and provincial/territorial governments will also work together to establish a review of carbon pricing, including an assessment of stringency and effectiveness, which will be completed by early 2022; an interim report will be completed in 2020, which will assess approaches and best practices to address the competitiveness of emissions intensive, trade exposed (EITE) sectors. As noted above, the federal government announced a pan-Canadian carbon price in October 2016, which establishes a minimum price of $10 per tonne of carbon dioxide equivalent (CO2e) in 2018, increasing by $10 each year until the carbon price reaches $50 per tonne of CO2e by 2022. Pricing will be based on GHG emissions and applied to a broad set of sources; at a minimum, carbon pricing should apply to substantively the same sources as BC’s carbon tax. Provinces and territories must implement carbon pricing in their jurisdictions by 2018, either in the form of a carbon tax or a cap-and-trade system. Where a jurisdiction fails to meet the carbon price benchmark, the federal government will introduce a carbon pricing system into such jurisdiction and return the revenues to it. Further, provinces with cap-and-trade need (i) a 2030 emissions reduction target, and (ii) declining annual caps to at least 2022 that correspond, at a minimum, to the projected emissions reductions resulting from the carbon price that year in price-based systems.
As the provinces and territories work to implement the Framework, all levels of government will need to seek input from subject matter experts and stakeholders to ensure informed decision making and the use of best practices. Stay tuned for further developments.