Canada

Canada’s green economy framework is embedded in several legally binding and strategic instruments rather than a single plan. The Canadian Net-Zero Emissions Accountability Act (2021) provides the legal foundation for achieving net-zero by 2050, mandating interim targets every five years, national emissions-reduction plans, and independent oversight by the Net-Zero Advisory Body (NZAB). The federal 2030 Emissions Reduction Plan (ERP), tabled in 2022 under this Act, is the key roadmap integrating decarbonisation with growth and social policy. Supporting instruments include the 2030 Nature Strategy, the Green Growth and Climate Plan (Budget 2023), and Clean Electricity Regulations under finalisation in 2025. Fiscal levers are channelled through the Canada Growth Fund (C$15 billion), the Clean Technology Investment Tax Credits, and the Carbon Pricing Backstop System (federal floor rising to C$170/tonne by 2030).

While the architecture is highly detailed, implementation is distributed across multiple acts and budget tools rather than a unified “green economy plan.” Provincial variation and sectoral execution challenges remain.

Canada promotes inclusive governance through a series of federal policies and action plans. The Employment Equity, Diversity and Inclusion Action Plan (2025–2028) sets goals to increase representation of women, Indigenous peoples, persons with disabilities, and visible minorities in federally regulated workplaces. This builds on the Employment Equity Act and includes mechanisms for workforce analysis, systems reviews, and modernized self-identification. The Accessible Canada Act (2019) and the Gender Budgeting Act (2018) strengthen inclusive practices in public administration, while Gender-Based Analysis Plus (GBA+) is mandatory for federal budget proposals. However, there is no national strategy mandating employee representation on corporate boards or binding gender quotas, and ESG reporting remains voluntary.

Canada mandates broad-based consultation and impact assessment for federal policy and regulation. The Cabinet Directive on Regulation (2023) requires departments to consult stakeholders and publish Regulatory Impact Analysis Statements (RIAS) through the Canada Gazette. The Impact Assessment Act (2019) governs environmental and social assessment for major projects, with dedicated provisions for Indigenous engagement and rights, gender-based analysis (GBA+), and cumulative effects. The Public Policy Forum, Indigenous Services Canada, and Treasury Board Secretariat have institutionalised public and equity lenses (e.g., Gender-based Analysis Plus Framework used in all federal proposals). Though these processes are highly developed, engagement quality and influence can vary across provinces and sectors.

Canada has advanced “beyond GDP” reporting through Statistics Canada’s Quality of Life Framework (QoLF), launched in 2021 and updated annually. The framework includes over 80 indicators covering prosperity, health, environment, and equity, and is explicitly integrated into federal budget planning (since Budget 2021). Complementary systems include natural capital accounting under the Canadian System of Environmental–Economic Accounts (CSEEA), measuring forests, water, ecosystems, and greenhouse gases in SEEA-compatible format. The Treasury Board and Finance Canada use QoLF indicators in expenditure reviews and policy justification.

Canada has introduced comprehensive measures to embed climate risk into the financial system. The Office of the Superintendent of Financial Institutions (OSFI) issued the Climate Risk Management Guideline (2025), requiring federally regulated institutions to integrate physical and transition climate risks into governance, risk management, and disclosure. In 2024, OSFI and the Bank of Canada conducted a Standardized Climate Scenario Exercise (SCSE) with over 250 banks and insurers. The Canadian Securities Administrators (CSA) is pausing its work on the development of a new mandatory climate-related disclosure rule and amendments to the existing diversity-related disclosure requirements. This is being done to support Canadian markets and issuers as they adapt to the recent developments in the U.S. and globally. Climate-related risks are a mainstream business issue and securities legislation already requires issuers to disclose material climate-related risks affecting their business in the same way that issuers are required to disclose other types of material information. The Canadian Sustainability Standards Board (CSSB) issued their inaugural sustainability standards in December 2024, which are generally aligned with the standards issued by the International Sustainability Standards Board. The CSSB standards provide a useful voluntary disclosure framework for sustainability and climate-related disclosure that issuers are encouraged to refer to when preparing their disclosures.

"Since 2022, the Bank of Canada has issued annual “Disclosure of Climate‐Related Risks” reports, integrated climate risks into its risk management framework, and launched a pilot climate‐scenario exercise in partnership with OSFI and major banks. In March 2023, OSFI introduced Guideline B‑15 on climate risk management, updated in early 2024, outlining expectations for climate scenario analysis by regulated institutions. These steps signal structured integration of environmental financial oversight at the federal level.

Canada systematically conducts environmental assessments for trade negotiations, guided by the Federal Sustainable Development Strategy and aligned with the 2030 Agenda. Through its 2025 G7 presidency, Canada has pushed for global frameworks linking trade with climate goals and biodiversity protection, advocating for climate-aligned export financing and support for clean technology sectors. Sustainability provisions are present in modern trade deals like CETA and CPTPP, and the government is working to update environmental chapters in upcoming agreements such as with Mercosur. However, Canada has not yet implemented interoperability mechanisms for green taxonomies or carbon pricing across agreements, and has not formalized its approach to fossil fuel subsidy reform in trade deals.

Canada operates a federal carbon pricing framework under the Greenhouse Gas Pollution Pricing Act, consisting of a fuel charge and an Output-Based Pricing System (OBPS) for large industrial emitters. Provinces and territories must meet federal stringency standards, otherwise the backstop system applies. The federal carbon price is scheduled to rise annually by CAD 15 per tonne, reaching CAD 170/tCO₂e in 2030. Canada’s Net-Zero Emissions Accountability Act (2021) sets legally binding targets and milestone plans, while the 2021 Enhanced NDC (reaffirmed 2024) commits to a 40–45% emissions reduction by 2030 from 2005 levels. The system is legally binding and covers most sectors of the economy.

"Canada’s 2030 Emissions Reduction Plan (released 2023) and the Federal Sustainable Development Strategy (2023-2027) provide sector‐by‐sector roadmaps across electricity, transport, buildings, and agriculture to reach a 40–45% emissions reduction by 2030. Federal strategies like Transportation 2030 incorporate green transit modernization. Departments align sustainability targets with the Federal Sustainable Development Strategy and provincial-level action planning supports sector integration efforts.

Canada’s circular economy policy is a multi-level strategy supported by national, provincial and industry initiatives. In early 2025, the federal government published a national Circular Economy Action Plan expanding beyond plastics into mining residues, food waste, e-waste, textiles and packaging. This builds on earlier frameworks like the Canada-wide Zero Plastic Waste Strategy and the Circular North America Discussion Paper, and is reinforced by targeted funding for innovation, product stewardship, and regional collaboration. Canada is also part of the High Ambition Coalition to End Plastic Pollution and is advancing regulatory frameworks to promote material reuse and extended producer responsibility. However, a set of national medium and long-term targets, such as CMUR or reuse standards, is still not in place.

Canada is implementing a comprehensive national clean transport strategy under its Action Plan for Clean On-Road Transportation, targeting 100% zero-emission vehicle (ZEV) sales by 2035 and 60% by 2030. These mandates are reinforced by significant federal investments in charging infrastructure, heavy-duty truck decarbonization, and rural mobility inclusion. In August 2025, the government announced over CAD 25 million for new ZEV infrastructure across provinces, including corridors for freight electrification and EV deployment in cold-weather zones. These policies are complemented by the national Climate Change Adaptation Plan and alignment with SDG 11 through rural and Indigenous mobility programs. Regulatory progress and infrastructure rollout are monitored by Transport Canada and Natural Resources Canada.

Canada’s electricity grid is already over 80% non-emitting, and the federal government is investing in further decarbonization. The Clean Electricity Strategy (2024) and the Powering Canada Forward initiative aim to fully decarbonize the grid by 2035, with major investments in wind, solar, hydrogen, and grid modernization. Recent funding announcements (e.g., $16 million for Maritime provinces in 2025) support clean energy in Indigenous and rural communities. Even though the country has ambitious RE targets, final energy consumption is not on track for a total shift to renewables, oil and gas dominate exports and domestic use, and implementation is fragmented across provinces (Alberta and Saskatchewan are actively rolling back renewable targets).

The Canadian Sustainable Jobs Act, passed June 2024, establishes a Council to guide sustainable job growth toward net‑zero. Natural Resources Canada’s Sustainable Jobs Plan (2023‑2025) includes federal actions for regional green employment. NRCan also operates a Green Jobs program to subsidize youth internships in natural resource sectors. While acknowledging just transition needs and inequality issues, the programmes supporting workers in fossil-fuel-dependent regions can be regarded as limited in ambition. Considering Canada's economy, more ambition is needed, specially for brown-sector workers in terms of reskilling, transition income support and region-specific just transition pathways.

Canada’s Sustainable Jobs Act (Bill C-50)—passed in June 2024—creates a legal framework for a “just transition,” establishing a Sustainable Jobs Partnership Council, a Secretariat, and a mandate for five-year Sustainable Jobs Action Plans beginning in 2025. It builds on previous Just Transition Task Force work (2018) and the Sustainable Jobs Plan (2023). Funding mechanisms include the Canada Growth Fund and Future Skills Centre for workforce retraining. The Act ensures labour representation and coordination with Indigenous communities, but initial implementation details and binding requirements on provinces are still developing.

Canada supports green MSMEs through a variety of targeted federal programs. The Clean Technology Investment Fund and the Canada Greener Homes Grant provide financial support for sustainable business projects and household energy-efficiency retrofits. The Business Development Bank of Canada (BDC) and Export Development Canada (EDC) offer financing instruments for low-carbon SMEs and green technologies. At the community level, Employment and Social Development Canada accepts applications for sustainability-related funding through Form EMP5523. While some provinces (e.g., British Columbia, Ontario, Nova Scotia) provide legal recognition or procurement rules for social enterprises, there is no federal legal form for social enterprise.

"Canada applies traditional social protection programs while experimenting with green-linked initiatives at regional levels. Indigenous-led Conservation Impact Bond pilots (the Deshkan Ziibi) support habitat restoration with social engagement. However, there are no national universal basic income or green job guarantee schemes tying social protection to the green economy. The 2023–24 fiscal plans emphasize affordability and inclusion but do not introduce universal green-linked schemes.

The 2030 Nature Strategy (launched December 2023) provides a unified roadmap for achieving Canada’s Kunming–Montreal GBF targets, including conserving 30% of land and waters by 2030 (“30x30”). Implementation is guided by Nature Agreements with provinces and Indigenous governments and underpinned by the Nature Smart Climate Solutions Fund (C$1.6 billion, 2021–2031). The Canadian Biodiversity Strategy (2015) and Pan-Canadian Approach to Transforming Species at Risk Conservation remain reference frameworks. Canada reports to the CBD and UN SDG processes through ECCC.

Canada publishes environmental-economic accounts through Statistics Canada, including data on forests, minerals, water, and energy, partially aligned with the UN System of Environmental-Economic Accounting (SEEA). Experimental work on ecosystem services accounts is ongoing, but as of 2025 there is no legislated, comprehensive national natural capital accounting framework. Canada’s Second Adaptation Communication to the UNFCCC (2023) highlights institutional coordination for climate and environmental data but does not establish a statutory governance body for natural capital. Integration into fiscal and infrastructure decision-making is still emerging.

Canada’s Food Policy for Canada offers a comprehensive framework supporting sustainable agriculture, healthy diets, and equitable food systems aligned with SDGs 2 and 12. Programs like the Local Food Infrastructure Fund, Nutrition North Canada, and the Food Waste Reduction Challenge continue to receive long-term federal investment, alongside Indigenous-led food sovereignty projects. While Canada monitors SDG-aligned food system indicators through Statistics Canada and the Canadian Indicator Framework, the country has not yet enacted formal ecological footprint reduction targets or national healthy diet mandates. Subsidy reform is also limited, with agricultural supports still largely based on productivity and market stabilization goals.

The country has in place, domestically, a Nature Smart Climate Solutions Fund (C$1.6B), a Natural Heritage Conservation Program, and biodiversity-linked funding within the Canada Growth Fund. Internationally, it pledged C$5.3 billion (2021–2026) in climate finance, including C$1 billion for nature-based solutions. Canada’s 2023–2025 budgets emphasise phasing out fossil-fuel subsidies and expanding green bonds (sovereign issues since 2022). Although there is some prioritisation of nature finance reform in recent years, and important biodiversity-linked funds in place at the domestic level, harmful fossil fuel subsidies remain large, supporting the oil and gas sectors in the tens of billions of dollars over recent years. Nature finance tools are fragmented, and there is no national nature finance framework.

Canada’s COVID-era recovery was framed by “A Healthy Environment and a Healthy Economy” (2020) and expanded through Budget 2021–2024 into a long-term clean-growth package. The stimulus included the Canada Infrastructure Bank (CIB) investments in clean transport and water, the Zero Emission Vehicle (ZEV) Infrastructure Program, and expanded Clean Technology Tax Credits. Recovery funding was explicitly aligned to net-zero objectives and social resilience, amounting to more than C$100 billion in total stimulus. Subsequent budgets have transitioned recovery funding into structural net-zero policy tools (Clean Electricity Regulations, Carbon Contracts for Difference, and the Investment Tax Credits for Clean Manufacturing, Hydrogen, and CCUS).