Question Period Note: Domestic GHG Regulatory Approach

Domestic GHG Regulatory Approach

• The Government of Canada will continue to provide national leadership and to work with partners to reduce greenhouse gas emissions across all sectors of the economy.
• Since launching Canada’s clean growth and climate plan three years ago, the Government has put in place a number of important regulations to reduce Canada’s greenhouse gas emissions.
• These important actions include putting a national price on carbon pollution. The Government has also put in place rules to reduce pollution from key industrial sectors. These measures are accelerating the phase-out of coal-fired electricity, cutting emissions from vehicles and trucks, and reducing methane from the oil and gas sector.
• The Government of Canada is supporting the auto sector’s transition to clean transportation, with initiatives that will help create demand for cleaner-running cars, while also developing the Clean Fuel Standard to accelerate Canada’s transition to cleaner fuels.
• These regulatory actions have put Canada on a firm path to a clean-growth economy. They will help the Government meet its commitments under the Paris Agreement.

• The Government has committed to providing national leadership and working with provinces and territories to take action on climate change, put a price on carbon, and reduce carbon pollution. On December 9, 2016, Canada’s First Ministers adopted the Pan-Canadian Framework on Clean Growth and Climate Change (PCF). The PCF includes more than fifty concrete actions that cover all sectors of the Canadian economy, and positions Canada to meet its Paris Agreement greenhouse gas (GHG) emissions reduction target of 30% below 2005 levels by 2030.
• Work is ongoing to implement a suite of regulatory mitigation actions under the PCF to reduce GHG emissions. Key developments include the publication of regulations governing coal-fired and natural gas-fired electricity generation, methane regulations for the oil and gas sector and vehicle standards for heavy-duty vehicles.
• Regulations that help drive down emissions can also help the economy to keep growing by cutting costs for Canadians, creating new markets for low-emission goods and services, and helping businesses use cleaner and more efficient technologies that give them a leg up on international competitors.

Carbon Pricing (see QP on carbon pricing for more details)
• Under the Greenhouse Gas Pollution Pricing Act, the federal carbon pollution pricing system has two parts: (1) a regulatory fuel charge that generally applies to fuel producers and distributors, and (2) a regulatory trading system for industry – the Output-Based Pricing System (OBPS).
• The federal OBPS is designed to ensure there is a price incentive for industrial emitters to reduce their greenhouse gas (GHG) emissions and spur innovation while maintaining competitiveness and protecting against carbon leakage.

Clean Fuel Standard
• The Clean Fuel Standard will significantly reduce GHG emissions by lowering the lifecycle carbon intensity of fossil fuels. It will also send a market signal for investment and innovation in low carbon fuels and technologies, while providing flexibility for fossil fuel producers to comply at lower costs, in order to mitigate price impacts on fuel purchasers.
• Since its announcement in 2016, Environment and Climate Change Canada has engaged broadly with stakeholders and provinces. Most recently, on June 30, 2019, the Government of Canada released the Proposed Regulatory Approach for the first phase of the Clean Fuel Standard regulations covering liquid fossil fuels primarily used in transportation (such as gasoline and diesel)

Electricity
• Canada already has one of the cleanest electricity systems in the world. About 80 percent of electricity production comes from non-emitting sources (renewables such as hydro, wind and solar, and nuclear).
• In December 2018, the federal government published final regulations to phase out traditional coal units across Canada by 2030. At the same time, Canada also published performance standards for natural gas-fired electricity generation, in consultation with provinces, territories, and stakeholders.

Transportation
• The transportation sector accounted for about 25 percent of Canada’s GHG emissions in 2016, mostly from passenger vehicles and freight trucks. The federal government is continuing to implement increasingly stringent standards for GHG emissions from light-duty vehicles, including fuel-efficient tire standards.
• Phase 2 GHG emissions standards for heavy-duty vehicles were published in May 2018. Canada’s revised heavy-duty vehicle emissions regulations will reduce greenhouse gases from on-road heavy-duty vehicles, engines, and trailers. The regulations will introduce stronger standards for vehicles and engines in model year 2021, increasing in stringency up to model year 2027 to give heavy-duty vehicle manufacturers and owners time to adapt.
• Environment and Climate Change Canada is implementing regulations establishing increasingly more stringent GHG standards for light-duty vehicles. Environment and Climate Change Canada is also conducting a mid-term evaluation of the Passenger Automotive and Light-truck Greenhouse Gas Regulations, which aims to determine if the GHG emission standards for the 2022 to 2025 model years remain appropriate for Canada.

Oil and Gas
• Tackling methane emissions from the oil and gas sector is one of the lowest-cost reduction opportunities. In April 2018, Environment and Climate Change Canada published final federal methane regulations. The federal methane regulations provide a backstop to ensure that Canada’s objective of a 40 to 45 percent emission reduction from oil and gas by 2025 will be achieved. Canada’s regulations are designed to promote innovation and provide flexibility for industry to choose the most cost-effective compliance options.

Question Period notes as provided by the Department to the Minister’s Office