Key Takeaways
- Canada’s climate policy has been marked by uncertainty in 2025, despite a come-from-behind victory by Mark Carney’s Liberals.
- The government has committed to several policies, including stronger industrial carbon pricing, methane rules, and clean-electricity tax incentives, but many of these are still uncertain or unfinished.
- The country is not on track to meet its 2030 emissions target, and a course correction is needed.
- The federal government has made progress on some policies, such as finalizing stronger methane rules and implementing investment tax credits for clean electricity.
- However, other policies, such as industrial carbon pricing and electric vehicle incentives, are still uncertain or have been paused.
- The stakes are high, with Canada experiencing severe climate-related events, including wildfires and flooding, and the need for concrete actions to protect people and communities is urgent.
Introduction to Climate Policy in 2025
The year 2025 has been a whirlwind for climate policy in Canada, marked by uncertainty and a lack of progress towards meeting the country’s 2030 emissions target. Despite a come-from-behind victory by Mark Carney’s Liberals, the government’s climate policy approach remains unclear, and many of the policies announced are still uncertain or unfinished. As the year comes to a close, it is clear that Canada needs to make significant progress on climate policy in order to reduce emissions and support competitiveness in a world responding to new trade relationships.
Priorities for Climate Policy
Earlier in the year, the Canadian Climate Institute outlined a handful of top priorities for the government to focus on to make meaningful policy progress. These priorities included strengthening industrial carbon pricing, finalizing methane rules for the oil and gas sector, implementing clean-electricity tax incentives, and supporting critical minerals. However, of these six policies, three remain unfinished or uncertain, including industrial carbon pricing, electric vehicle incentives, and clean electricity regulations. The government has committed to strengthening industrial carbon pricing, but the details are still unclear, and the recent memorandum of understanding with Alberta has pushed any clarity on this out to April of next year.
Progress on Methane Rules and Clean Electricity
On a more positive note, the federal government has finalized stronger methane rules for the oil and gas sector, which is a significant step forward. Action on methane is a no-brainer, representing some of the lowest-cost actions available, and the federal government’s commitment to reducing methane emissions by 72% by 2030 is a positive development. Additionally, the government is implementing its long-promised investment tax credits for clean electricity, which should be passed early next year. However, the memorandum of understanding with Alberta has undermined the government’s commitment to the Clean Electricity Regulations, with a carve-out for Alberta that risks copy-cat requests from other provinces and a race to the bottom in other areas of climate policy.
Uncertainty on Electric Vehicles and Industrial Carbon Pricing
The government has paused its Electric Vehicle Availability Standard and consumer incentives, throwing into question one of the only policies Canada has to reduce emissions in the transportation sector. This uncertainty has stymied EV sales in the country, which were previously rising steadily year over year. Maintaining a strong standard will help Canadians find better, more affordable vehicle options, while creating flexibility for vehicle manufacturers. Furthermore, the government’s commitment to strengthening industrial carbon pricing is still uncertain, with the details of the policy still unclear. The recent memorandum of understanding with Alberta has pushed any clarity on this out to April of next year, and the Alberta government’s decision to weaken its carbon-pricing system just one week after the signing of the MOU is a worrying sign.
The Need for Concrete Actions
The stakes are high, with Canada experiencing severe climate-related events, including wildfires and flooding. The need for concrete actions to protect people and communities is urgent, and the government must resolve the policy uncertainty that is standing in the way of progress as soon as possible. The problems Canada faces are urgent, but the solutions are right in front of us. The federal government’s commitment to implementing sustainable investment guidelines, also known as the climate taxonomy, is a positive development, and the government’s tasking of the Canadian Climate Institute to do the technical work that will underpin the guidelines is a significant step forward. However, more needs to be done to address the urgent need for climate action in Canada.
Conclusion
In conclusion, Canada’s climate policy in 2025 has been marked by uncertainty and a lack of progress towards meeting the country’s 2030 emissions target. While the government has made some progress on certain policies, such as methane rules and clean electricity, many other policies remain uncertain or unfinished. The stakes are high, and the need for concrete actions to protect people and communities is urgent. The government must resolve the policy uncertainty that is standing in the way of progress as soon as possible and take concrete actions to reduce emissions and support competitiveness in a world responding to new trade relationships. As the author notes, "no more grandiose rhetoric please: all I want for Christmas is some concrete delivery of long-promised climate change policy by Canadian governments."