Stronger climate policy can bring Canada closer to major trade partners

Canada is falling behind its major non-U.S. trading partners in the implementation of key climate and sustainable finance policies, particularly in mandatory climate disclosure and the development of a national climate investment taxonomy. While Canada aligns on net zero commitments and carbon pricing, the lack of progress in other areas creates economic friction and risks exposing Canadian businesses to carbon tariffs. The report argues that accelerating these policies will help Canada diversify its trade and identify new growth opportunities in a global economy increasingly aligned on climate fundamentals.

• Canada's major non-U.S. trading partners show a strong global alignment on five fundamental climate and sustainable finance policies: net zero commitments, climate investment taxonomies, carbon pricing or emissions trading, mandatory climate disclosure, and transition plan guidance.
• Canada is lagging behind its trade partners in the implementation of mandatory climate disclosures and formalized transition plan guidance, with securities regulators having recently paused work on making disclosure standards mandatory.
• Although Canada previously committed to a national climate investment taxonomy, it has not made progress, which hinders the ability of Canadian businesses to be identified as net zero aligned compared to partners who have such taxonomies or robust guidelines.
• Most of Canada's major trade partners utilize carbon pricing or emissions trading systems; only India and the U.A.E. currently do not, though India intends to launch an emissions trading system next year.
• The divergence between Canada's climate policies and those of its global partners creates economic friction and may expose Canadian businesses to carbon tariffs when accessing certain markets.

APA

Canadian Climate Institute (2025). Stronger climate policy can bring Canada closer to major trade partners. https://climateinstitute.ca/stronger-climate-policy-can-bring-canada-closer-to-major-trade-partners/

Chicago

Canadian Climate Institute. Stronger climate policy can bring Canada closer to major trade partners. 2025. https://climateinstitute.ca/stronger-climate-policy-can-bring-canada-closer-to-major-trade-partners/.

Wikipedia

{{cite report |author=Canadian Climate Institute |title=Stronger climate policy can bring Canada closer to major trade partners |date=30 July 2025 |url=https://climateinstitute.ca/stronger-climate-policy-can-bring-canada-closer-to-major-trade-partners/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{canadianclimateinstitute2025stronger, author = {{Canadian Climate Institute}}, title = {{Stronger climate policy can bring Canada closer to major trade partners}}, institution = {Canadian Climate Institute}, year = {2025}, month = jul, url = {https://climateinstitute.ca/stronger-climate-policy-can-bring-canada-closer-to-major-trade-partners/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }