CANADA Law and Practice Contributed by: Thomas McInerney, Selina Lee-Andersen, Sonia J. Struthers and Elyse Bouey, McCarthy Tétrault LLP
New England Governors and Eastern Canadian Premiers (NEG-ECP) The New England Governors and Eastern Canadian Premiers (NEG-ECP) partnership is a long-standing regional initiative involving the six New England states and the provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island and Quebec. It promotes cross-border co-operation on climate change, energy and environmental issues, including regional emissions-reduction targets, cli - mate action plans and coordinated policy responses. Though it creates no binding legal obligations, it is an important forum for regional cooperation and informa - tion sharing on climate-related matters. 2. National Policy and Legal Regime (Overview) 2.1 National Climate Change Policy Canada’s national climate policy is informed by both climate science and its international commitments under the UNFCCC and the Paris Agreement. Scien - tific assessments – including IPCC reports, Canada’s Changing Climate Report and national GHG invento - ries – inform the development of federal emissions- reduction targets, climate policy and adaptation plan - ning. Under the Paris Agreement, Canada must prepare, communicate and maintain successive nationally determined contributions (NDCs), and report on its GHG emissions and progress toward its targets within the transparency and accountability framework. Can - ada’s current commitments are to reduce GHG emis - sions by at least 40-45% below 2005 levels by 2030 and by 45-50% below 2005 levels by 2035, with the objective of net-zero emissions by 2050. The net-zero-by-2050 commitment is reflected domestically in the Canadian Net - Zero Emissions Accountability Act (SC 2021, c. 22) (Canadian Net Zero Act), which establishes a framework for setting emissions-reduction targets, preparing emissions- reduction plans and reporting on progress toward those targets. These targets are also reflected in a suite of regulations made under the Canadian Environ-
mental Protection Act , 1999 (SC 1999, c. 33) (CEPA) aimed at achieving federal emissions reduction plans. Role of Carbon Markets and Carbon Pricing Carbon pricing and markets are also central to Can - ada’s climate policy. The federal approach assigns a cost to carbon while allowing flexibility in how compliance obligations are met, supported by emis - sions trading, offset credits and other market-based mechanisms that target reductions where they can be achieved most efficiently. Carbon costs and car - bon-market opportunities have accordingly become important for project development, investment and transactional due diligence in emissions-intensive sectors. 2.2 Constitutional Framework for the National Legal Regime for Climate Change Canada has no express constitutional provision gov - erning environmental protection or climate change. Instead, climate regulation operates within Canada’s federal system, in which legislative authority is divid - ed between the federal Parliament and the provinces under the Constitution Act , 1867 . The Supreme Court of Canada has repeatedly held that the environment falls within overlapping federal and provincial juris - diction. Canada’s climate change regime is therefore grounded in cooperative federalism, with both levels of government regulating different aspects of climate policy. Federal climate legislation may be supported by several heads of power, including the criminal law power and the national concern branch of the peace, order and good government (POGG) power. Most notably, in References re Greenhouse Gas Pollution Pricing Act , 2021 SCC 11, the Supreme Court upheld the Greenhouse Gas Pollution Pricing Act (SC 2018, c. 12, s. 186) (GGPPA), holding that the establishment of minimum national standards of GHG price strin - gency to reduce GHG emissions falls within Parlia - ment’s national concern jurisdiction while preserving substantial provincial flexibility in implementation. The most significant recent constitutional develop - ment is the Supreme Court’s decision in Reference re Impact Assessment Act , 2023 SCC 23, which held that the “designated projects” scheme of the federal Impact Assessment Act (SC 2019, c. 28, s. 1) (IAA) was largely unconstitutional as an overreach into matters
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