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Canada Unveils Bold 2030 Emissions Reduction Plan

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Automotive Bulletin

On March 29, 2022, Canada’s Minister of Environment and Climate Change unveiled the country’s 2030 Emissions Reduction Plan to reduce greenhouse gas emissions (the “Plan”).[1] This is the first emissions reduction plan issued under the Canadian Net-Zero Emissions Accountability Act. The Plan includes bold new measures to dramatically curb greenhouse gas emissions: the goal is to reduce emissions by 40 to 45 percent below 2005 levels by 2030 and to achieve net-zero emissions by 2050.

The Plan includes $9.1 billion in new investments in the following initiatives:

  • Increased targets for lower emission vehicle sales: A new government sales mandate will ensure that at least 20% of new light-duty vehicle sales will be zero-emission by 2026, at least 60% by 2030, and 100% by 2035. The government will also develop a regulation to require 100% medium- and heavy-duty vehicle sales to be zero-emissions vehicles ("ZEV") by 2040. In the interim, there will also be regulated sales targets that vary across vehicle categories based on feasibility, and the government has indicated there is potential to explore additional targets in the mid-2020s.
  • Extension of the Incentives for Zero-Emission Vehicles Program (“iZEV”): The federal government will provide an additional $1.7 billion to extend iZEV to increase affordability and accessibility of electric vehicles.
  • Additional charging stations for zero-emissions vehicles: An additional $400 million will fund zero-emissions vehicle charging stations. The Canada Infrastructure Bank will also invest $500 million in zero-emissions vehicle charging and refuelling infrastructure.
  • Electrifying more activities: The federal government will work with the provinces and utilities to establish a Pan-Canadian Grid Council to promote clean electricity infrastructure investments. The government also plans to invest an additional $600 million in the Smart Renewables and Electrification Pathways Program to support renewable electricity and grid modernization projects, as well as $250 million to support predevelopment work for large clean electricity projects.
  • The Low Carbon Economy Fund is expanded through a $2.2 billion renewal: The renewal aims to leverage further climate actions from the provinces, territories, municipalities, colleges and schools, businesses and other organizations. Clean energy and efficiency projects led by Indigenous Peoples will also be supported by way of a new $180-million Indigenous Leadership Fund. The federal government is also investing $25-million in Regional Strategic Initiatives to drive economic prosperity and the creation of sustainable jobs.
  • Reducing energy costs for homes and buildings: The strategy will massively retrofit the existing building stock and drive construction to the highest zero-carbon standards. The Canada Greener Homes Loan program will also receive an additional investment of $458,5 million. This initiative will reduce emissions, save money on renovations and heating and cooling costs, and stimulate well-paying jobs in the economy.
  • Reducing carbon pollution from the oil and gas sector: The Plan presents modelling that includes a projected contribution from the oil and gas sector of emission reductions to 31% below 2005 levels in 2030. Following consultations with industry, provinces, Indigenous partners and civil society, a cap will be implemented to lower oil and gas sector emissions. The government is also aiming to achieve a 75% reduction in oil and gas methane by 2030.
  • Helping industries develop and adopt clean technology: Canada is developing a carbon capture, utilization and storage strategy; introducing an investment tax credit incentive; and, investing $194 million to expand the Industrial Energy Management System.
  • Putting a price on pollution: The Plan commits the federal government to exploring measures that will help guarantee the price of pollution. This includes investment approaches (e.g. carbon contracts to enshrine future price levels, de-risking private sector low-carbon investments) and exploring legislative approaches to support a durable price on pollution.

[1] 2030 Emissions Reduction Plan – Canada’s Next Steps for Clean Air and a Strong Economy

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