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The federal government has issued its strengthened benchmark stringency criteria in line with previously announced increases to the carbon price (rising at $15/tonne per year to $170/tonne by 2030). The government previously indicated its intent to strengthen the benchmark stringency criteria for the post-2022 period in September 2020. The government intends to seek confirmation from provinces and territories on whether they intend to maintain or implement a carbon pricing system for the 2023-2030 period and assess provincial and territorial submissions against the updated federal benchmark criteria in 2022 for the 2023 to 2030 period. The 2016 benchmark continues to apply for assessments of carbon pollution pricing system stringency for the 2018-2022 period. Provinces and territories must implement (a) an explicit price-based system (i.e., (i) a carbon levy on fossil fuels, or (ii) a hybrid system comprised of a carbon levy on fossil fuels and an output-based pricing system for industry) or (b) a cap-and-trade system. Partial explicit price-based system must be designed to fully replace either the federal fuel charge or the federal OBPS. Where a province or territory implements a partial system that does not fully replace the federal fuel charge or OBPS, the corresponding federal backstop system part (i.e., fuel charge or OBPS) will apply in full in the jurisdiction. The updated benchmark sets new requirements for both explicit price-based systems and cap-and-trade systems, in the following areas: Explicit price-based systems: (i) carbon price ($65/tonne in 2023, rising $15 per year to $170/tonne in 2030); (ii) common scope; (iii) price signal (no measures to offset, reduce or negate); (iv) stringency of output-based pricing systems (OBPS) for industry; (v) restriction on OBPS and performance-based rebate approaches under a carbon levy; (vi) offset credits; and (vii) public reporting. Cap-and-trade systems: (i) maximum emissions cap (corresponding at minimum to projected emissions levels…

Bill C-15, the United Nations Declaration on the Rights of Indigenous Peoples Act (the Act), received Royal Assent on June 21, 2021. The Act affirms the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) as a universal international human rights instrument applicable in Canadian law and seeks to provide a framework for its implementation in Canada. This bulletin provides an overview of the implications and key aspects of the Act. Implications of the Act. The Act is widely seen as the first step in the domestic implementation of UNDRIP in Canada and follows similar legislation adopted by British Columbia in 2019. The Act does not itself implement UNDRIP into Canadian law but provides a pathway for its adoption and application, commensurate with Canadian law and the framework for recognizing the rights of Indigenous peoples provided under Canada’s Constitution. It is not yet clear to what extent Canadian law will be made consistent with certain provisions of UNDRIP, specifically the right of Indigenous peoples to free, prior, and informed consent (FPIC) for actions that may affect their rights, resources, and traditional territories. It is, however, probable that the use of UNDRIP as a tool for the interpretation of rights and statutes is likely to increase, in light of the Act, as laws are amended and adopted, in order to ensure or improve consistency with UNDRIP. Rights of Indigenous peoples. Section 2(2) provides that the Act upholds, and does not abrogate or derogate from, the rights of Indigenous peoples recognized and affirmed by section 35 of the Constitution Act, 1982.   Consistency with UNDRIP. Section 5 provides that the Government of Canada must take all measures to ensure that the laws of Canada are consistent with UNDRIP. Action Plan. Section 6 provides that the Minister designated by the Governor in Council pursuant to section 3 (the Minister), must prepare…

Canada yesterday filed its update to its nationally determined contribution (NDC) under the Paris Agreement with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat. The updated NDC commits Canada to reduce GHG emissions by its previously announced target of 40-45% below 2005 levels by 2030, reaching net-zero emissions by 2050. Canada’s emissions reduction ambitions under the NDC are supported by the Pan-Canadian Framework on Clean Growth and Climate Change and Canada’s strengthened climate plan: A Healthy Environment and a Healthy Economy (read our earlier bulletin on the plan here) as well as the various climate plans of provincial and territorial governments and the climate leadership, priorities, and goals of the Indigenous peoples of Canada.   Modelling for the NDC indicates that GHG emissions are anticipated to decline to 401 to 438 Mt CO2e by 2030. Further reductions are to be achieved with the adoption of innovative technologies such as zero-emission vehicles (ZEVs), industrial electrification, carbon capture, utilization and storage (CCUS), and hydrogen. The NDC makes clear that Canada is committed to a just transition to a net-zero economy (read our earlier bulletin on the Net-Zero Emissions Accountability Act here) through economic diversification and support for workers with skills training, education, accreditation, and ensuring equitable access to opportunities for underrepresented individuals and groups. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Bill C-12, the Canadian Net-Zero Emissions Accountability Act, (the NZ Bill) passed third reading in the House of Commons late yesterday evening. The NZ Bill was introduced last November, and if enacted will require national targets for the reduction of greenhouse gas (GHG) emissions on the pathway to net-zero emissions by 2050. This bulletin provides a brief overview of the NZ Bill and next steps:   Emissions reduction targets and plans. The NZ Bill provides for emissions reduction targets to be set by the Minister of Environment and Climate Change (the Minister) every five years, starting in 2030. The Minister must also establish an emissions reduction plan for each milestone year, indicating how Canada will meet the corresponding target. Each plan must also, inter alia, provide a description of relevant sectoral strategies, how international commitments are taken into account, and emissions reduction strategies for federal government operations; and provide projections of annual GHG emission reductions for each economic sector that Canada includes under the United Nations Framework Convention on Climate Change.  Net-Zero Advisory Board. The NZ Bill would establish the Advisory Board to provide independent advice to the Minister on achieving net-zero emissions by 2050 and each five-year milestone. The Advisory Board will provide advice on GHG emissions targets; GHG emissions reduction plan, including measure and sectoral strategies that the government could implement to achieve GHG emissions targets; and any other matter referred to it by the Minister. The Advisory Board is to be composed of members with expertise in, or knowledge of climate change science; Indigenous knowledge; relevant physical and social sciences; climate change and climate policy at the national, subnational, and international levels; energy supply and demands; and relevant technologies. Commissioner of the Environment and Sustainable Development. At least every five years, the Commissioner of the Environment and Sustainable Development will be required to examine and report on the government’s implementation of measures to…

Five of Canada’s largest oil sands producers operating 90% of oil sands production, including Suncor Energy, Canadian Natural Resources, Cenovus Energy, Imperial, and MEG Energy, today announced the Oil Sands Pathways to Net Zero initiative (the Initiative). The Initiative aims to work collectively with the federal and Albertan governments to reach net zero greenhouse gas (GHG) emissions from Canadian oil sands operations by 2050 and help Canada to meet its Paris Agreement and 2050 net zero commitments.  This bulletin provides key highlights from the announcement. Carbon Capture, Utilization and Storage. The Initiative proposes collaborating with industry and government to create a Carbon Capture, Utilization and Storage (CCUS) CO2 trunkline system connecting oil sands facilities in the Fort McMurray and Cold Lake regions to a sequestration hub in Cold Lake with the potential for future links to the Edmonton region, modeled on similar systems in Norway and CCUS projects in the Netherlands, U.K., and U.S. Investment. The Initiative will require significant investment by industry and government in research and development for new and emerging technologies, such as direct air capture, aimed at reducing and removing GHG emissions as well as deploying GHG reduction technology, including hydrogen, process improvements, energy efficiency, fuel switching, and electrification. Indigenous Partnerships. The Initiative will seek to partner and work with the federal and Alberta governments, to ensure that local Indigenous communities benefit from both emissions reductions and Canadian resource development. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.