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Canadian Government Carbon and Greenhouse Gas Legislation

April 2018


Reduction of Carbon Dioxide Emissions   Regulate emissions standards of consumer and industrial vehicles


Pan-Canadian Framework on Clean Growth and Climate Change

In December 2016, the federal government released the Pan-Canadian Framework on Clean Growth and Climate Change [PDF] (the Framework). The Framework is based around four main “pillars”: (i) carbon pricing; (ii) complementary action to reduce emissions across the economy; (iii) adaptation measures; and (iv) actions to accelerate innovation, support clean technology, and create jobs.

Central to the Framework is the carbon pricing program, which requires all Canadian jurisdictions to have carbon pricing in effect by 2018. Provinces and territories remain free to choose whether to implement a carbon tax or a cap-and-trade system, as long as they meet the minimum federal pricing and emissions reduction targets. For jurisdictions that do not implement a carbon tax or cap-and-trade system by 2018, or that do not meet the federal pricing and emissions reduction minimums, the federal government will provide a mandatory pricing system. For jurisdictions with explicit price-based systems, carbon pricing is to start at a minimum of $10 per tonne in 2018, rising by $10 a year to reach $50 per tonne in 2022. Over the course of 2017, the government released a Technical Paper explaining the federal carbon pricing option in detail as well as Guidance and Supplemental Guidance on the benchmark provincial carbon pricing schemes are expected to meet.

The Federal government has set a deadline of September 1, 2018 for provinces and territories to outline how they will implement carbon pricing systems that meet the federal standard. It has also asked provinces and territories that plan to adopt the federal approach to notify the federal government by March 30, 2018. 

Additional key commitments under the Framework include completely phasing out coal by 2030, developing increasingly stringent building codes starting in 2020, developing a clean fuel standard based on a full life-cycle analysis, continuing the phase down of hydrofluorocarbons (HFCs), implementing methane regulations with the goal of reducing methane emissions by 40-45% by 2025, and reducing federal government GHG emissions by 40% below 2005 levels by 2030 or sooner. The government has published a regulatory framework for the proposed Clean Fuel Standard and stated that it expects draft regulations to be forthcoming in late 2018. It has also published two proposed regulations intended to reduce methane emissions and air pollution. The federal government intends to meet its own emissions reduction targets by cutting emissions from government buildings and fleets, scaling up clean procurement, and modernizing the government’s current procurement practices.

In June 2017, the government announced that it was creating a $2-billion Low Carbon Economy Fund (the Fund) as part of the Framework.  The Fund will be split into two parts—the Low Carbon Economy Fund and the Low Carbon Economy Leadership Fund. A significant part of the Fund is allocated to participating provinces and territories to help them meet their commitments on greenhouse gas emissions. 

Greenhouse gas emissions reporting requirements

Under the Canadian Environmental Protection Act, 1999, Environment and Climate Change Canada (ECCC) requires certain emitters to report greenhouse gas emissions annually. In 2017, ECCC announced significant changes in the reporting requirements. The changes expand the scope of the facilities required to report. In particular, the changes lower the reporting threshold from 50,000 tonnes of emissions to 10,000 tonnes. 

Coal

Effective July 1, 2015, the Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations came into force under the Canadian Environmental Protection Act, 1999. The regulations place a limit of 420 tonnes of CO2 for each gigawatt-hour of electricity produced from coal per year. Compliance with the regulations by all new and most existing coal-fired electricity-generating plants will be required immediately, with some existing units being required to comply with the regulations before 2030.

Fuel

The federal government has also implemented the Regulations Amending the Passenger Automobile and Light Truck Greenhouse Gas Regulations and Heavy-Duty Vehicle and Engine Greenhouse Gas Emission Regulations (regulating the emissions standards of typical consumer and industrial vehicles), as well as the Renewable Fuel Regulations (governing the minimum quantities of renewable fuel that must comprise gasoline, diesel and heating fuels supplied in Canada). The government has also published a regulatory framework for its proposed Clean Fuel Standard; it has stated that it expects draft regulations to be forthcoming in late 2018.

International co-operation

In November 2017, Canada ratified the Kigali Amendment to the Montréal Protocol, which will phase down powerful greenhouse gases. Canada has also been working to harmonize its climate change efforts with those of other countries. Canada has announced partnerships with France and the World Bank Group and signed a Memorandum of Understanding with Rwanda to this effect.

 

The majority of Canada’s climate change initiatives have been implemented at the provincial level.

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