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National Schemes - Canada

Canada ratified the Kyoto Protocol on December 17, 2002. However, the Government of Canada has not implemented national policy or a national emissions trading scheme to date and later exited Kyoto in late 2011.

Prime Minister Stephen Harper has announced that Canada’s response to Climate Change and the Kyoto Protocol will be considered under Bill C-30 “Clean Air Act” which was released in October 2006 and which constitutes an integrated approach for GHGs, NOx and SO2 and other air pollutants. The Government of Canada announced some broad short-, medium- and long-term targets as part of the Bill C-30. However, Bill C-30 was referred to a special Legislative Committee of the Canadian House of Commons. This Committee is expected to provide its findings back to the House of Commons by March 30, 2007.

The Government of Canada plans to issue a discussion paper in April 2007 which will contain targets and which will have three compliance options – a technology investment fund, emissions trading, and a domestic offset system. It is anticipated that the domestic emission permit trading system for LFEs backed by regulated targets will be operational in Canada in 2010. It is anticipated that an offset system will emerge prior to 2010, beginning at the provincial level and then expanding to the national level. To date, the Government of Canada has not stated that it will provide any enabling mechanisms for access to international emissions trading markets, although it is envisioned that a position on this will be proposed in the near future.

A number of provincial regulations and trading schemes are emerging in Canada including:

  • British Columbia released a comprehensive strategy calling for 33% reduction in GHG emissions by 2020 – with interim targets for 2012 and 2016. BC’s initial position is that it intends to adopt the federal regulatory system for LFEs and offsets.
  • Alberta has announced specific intensity-based targets (12%) which commences July 1, 2007 and includes a provincial-based offset trading program.
  • Ontario released a discussion paper in early 2013 that suggested a cap-and-trade in as early as 2015 with federal regulations in 2016.
  • Quebec finalized its cap-and-trade regulation order in December 2012 and the program went into effect in 2013 with plans to link to California sometime later this year.

In 2007, the Government of Canada has announced the creation of $1.5 billion (CAD) “Eco-Trust Fund” to be distributed to the provinces based on population and which will be aimed towards provincial initiatives to address climate change – infrastructure, technology, and support for clean energy

Ontario also has provincial based regulations for NOx and SO2 under Emissions Trading Code 397.

Finally, emerging US climate change and trading issues may also have a significant impact on Canada’s future policy direction.