Canada is at risk of missing its emission goals, climate report says

Less-stringent climate policy and a push to develop carbon-intensive major projects could put Canada’s greenhouse gas targets further out of reach, according to a co-author of a new report on the country’s emissions.

Canada emitted around 691 megatonnes of carbon-dioxide equivalent in 2025, about 1 per cent more than 2024 levels, according to the 440 Megatonnes project report conducted by the Canadian Climate Institute, a non-partisan climate change policy research organization.

With climate policy changes at federal and provincial levels and Ottawa’s focus on major infrastructure development to bolster the economy to deal with the U.S. trade war, Canada will need to take more direct action to achieve its goal of net-zero emissions by 2050.

“There’s no question at the federal and the provincial level, governments have backtracked on climate policies, and we expect that to lead to higher emissions. The government has acknowledged that openly,” said Ross Linden-Fraser, acting director of the 440 Megatonnes project at the Climate Institute.

Opinion: The climate energy transition was a broken promise

Canada’s 2025 carbon emission levels were about 9.5 per cent below the 2005 baseline levels, and are well short of the goal of a 40 to 45 per cent reduction target for 2030, a gap of about 200 megatonnes, according to the estimates in the early emissions report released on Thursday.

The biggest contributors to the 2025 increase in greenhouse gases were from the building sector, where emissions jumped 6 per cent, and power generation, up 5 per cent compared with 2024.

“Our building sector is still really reliant on natural gas, so when the temperatures drop, and 2025 was a colder year than 2024, our gas use and our emissions go up significantly,” Mr. Linden-Fraser said.

In comparison, oil and gas – Canada’s highest emitters – remained essentially flat, while other sectors made scant progress at cutting carbon dioxide.

The November, 2025, memorandum of understanding announced by Prime Minister Mark Carney and Alberta Premier Danielle Smith envisions Ottawa backing Alberta’s proposal for a one-million-barrel-a-day pipeline to the Pacific Coast in exchange for dozens of provisions to lessen the environmental impact of the province’s energy sector.

Opinion: Not addressing climate change costs the economy more. When will we finally get this?

The subsequent implementation agreement included changes to the industrial carbon pricing system, which is designed to incentivize industries to install electrified technologies. However, the changes did not fix existing issues, such as an oversupply of carbon credits and low demand, Mr. Linden-Fraser said.

“The result is that industries, which particularly in Alberta are the main source of emissions, will not have enough incentive to reduce their emissions,” he said.

Mr. Carney’s most recent policy moves with Bill C-39, the Building Canada Strong Act, would see a reduction in consultation and approval time frames down to one year when fast-tracking major projects. However, Mr. Linden-Fraser said it is too soon to see how Mr. Carney’s climate and economic policies will affect carbon emissions.

He added the institute has done projections suggesting the potential impacts of those policies on Canada’s emission goals “and it’s nowhere near enough to get us on track to net-zero emissions.”

Canada’s best chance of getting back on track, is through clean electrification, the report stated.

But that involves breaking “20 years of history in which we’ve barely electrified at all,” Mr. Linden-Fraser said.

Canada’s electricity generation has only risen 3 per cent since 2005. In the same time period, natural gas use, not for power generation, has risen by 48 per cent.

Opinion: Happiness is our best weapon to fight climate change

Growth in non-emitting renewable energy generation has been negatively impacted by climate change with droughts reducing hydro production. Refurbishments to some nuclear power plants have also taken them offline.

As a result, the report found Canada’s electrical production “is less green than it was just five years ago,” down to 80 per cent of the total from 84 per cent in 2024.

Canada has made commitments to double its electrical generation by 2050 and recently announced a $10-billion investment in upgrading Churchill Falls hydroelectrical plant in Labrador to increase clean electrical generation.

“But it’s when we look at the overall picture that we’re not seeing enough progress,” Mr. Linden-Fraser said.

The early emissions data reinforces 440 Megatonnes’ previous study from September, which found the country is 20 years behind its 2030 emissions target goals, part of Canada’s commitment to reach net-zero emissions by 2050 under the Paris Agreement.