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The Canadian Climate Institute argues that exemptions to carbon pricing, particularly for home heating in Atlantic Canada, would undermine emission reduction incentives and increase the long-term cost of meeting climate targets. It contends that the existing rebate system already supports low-income households and proposes that any additional affordability needs be met through temporary, targeted rebates rather than policy exemptions that create market uncertainty.

The author contends that carbon pricing exemptions, such as those proposed for rural home-heating fuel in Atlantic Canada, are counterproductive because they eliminate incentives for cleaner energy adoption and create policy uncertainty for investors. While acknowledging energy affordability concerns, the text asserts that the existing rebate system already benefits most low-income households. As an alternative to exemptions, the document suggests implementing temporary, targeted rebates for low-income households to address cost-of-living pressures without weakening the overall carbon pricing framework.

The statement asserts that Canada's history of colonialism, including the residential school system and the Indian Act, has systematically removed Indigenous Peoples from their lands and suppressed traditional stewardship. It argues that current climate policy often uses an "add-and-stir" approach to Indigenization, whereas true reconciliation requires Indigenous Peoples to act as leaders and rights holders with full control over their knowledge systems. The text highlights the value of Indigenous-led initiatives, such as prescribed fire burning and guardian watchmen networks, as essential solutions for addressing the climate crisis and protecting ecosystems.

Canada's 2022 emissions rose by 2.1% from 2021 to 685 Mt CO2e, though they remain 6.4% below 2005 levels. The increase was primarily driven by oil and gas production and the building sector, which together accounted for 72% of the rise. While the electricity sector has seen a 55.6% reduction since 2005, overall progress is hindered by a growing, energy-intensive economy that offset the 22.9 Mt CO2e reduction achieved through climate policy and market drivers.

The report identifies the oil and gas sector as the primary obstacle to Canada's 2030 climate targets due to rising emissions. It proposes four complementary policies: strict methane regulations, targeted public support for carbon capture and storage (CCS), an emissions cap for the sector, and a government-backed transition investment taxonomy. The author emphasizes that explicitly addressing regional equity is essential for the political durability and success of these climate policies.

The Canadian Climate Institute proposes a four-part policy framework to decarbonize Canada's oil and gas sector while addressing regional fairness. The sector is identified as Canada's largest and fastest-growing source of emissions, contributing 189 Mt of greenhouse gases in 2021 (28% of the national total). To balance climate targets with economic stability, the report recommends stringent methane regulations, targeted public support for carbon capture and storage (CCS), a sector-specific emissions cap, and a government-backed transition investment taxonomy. This approach aims to ensure that oil and gas-producing regions contribute their fair share of reductions while protecting the trade balance and mitigating the risk of stranded assets as global demand for fossil fuels declines.

The report finds that heat pumps are the lowest-cost heating and cooling option for most Canadian households over the system's lifetime, though adoption is hindered by high upfront costs, information gaps, and structural barriers for renters. It recommends streamlining rebates, establishing one-stop shop services, and updating building codes to include cooling requirements.

The report finds that heat pumps are the most economical heating and cooling option for the majority of Canadian households over their system life cycle, particularly in cities like Vancouver, Montreal, and Halifax. Despite this economic advantage, adoption remains low due to behavioral, economic, and structural barriers, including high initial costs, lack of consumer confidence, and complex government rebate programs. The document argues that heat pumps are critical for both decarbonizing residential buildings and increasing resilience against extreme heat, which has caused significant mortality in regions like British Columbia. It recommends that governments maintain financial supports, simplify application processes through 'one-stop shops', implement indoor maximum temperature limits in building codes, and mandate high-efficiency, non-polluting systems in new constructions where electrically-powered heating is most cost-effective.

Canada's current electricity grid is 84 per cent non-emitting, providing a competitive advantage for low-carbon industrial production. To maintain this lead and meet the G7 goal of a net zero grid by 2035, the federal government has introduced the Clean Electricity Regulations and investment tax credits covering 15 to 30 per cent of project costs. While some provinces like Alberta have resisted these measures, the document notes that wind and solar are already cheaper than natural gas in Alberta and Ontario. The transition is expected to reduce household energy costs through technologies like heat pumps and electric vehicles while insulating the economy from fossil fuel price volatility.

A coalition of over 30 Canadian businesses, unions, and research organizations is urging the government to accelerate the transition to a carbon-neutral electricity grid by 2035. The signatories argue that clean electricity is essential for attracting global investment, supporting low-carbon industrial production (such as steel and batteries), and reducing energy costs for households through technologies like heat pumps and electric vehicles. While noting that Canada's electricity is already 83% clean, the letter emphasizes the need for reliable and competitively priced carbon-neutral grids to avoid losing jobs and investments to the United States, which shares the same goal.

A coalition of over 30 Canadian businesses, labour organizations, and research entities argues that transitioning to a net zero electricity grid by 2035 is a competitive necessity to attract global investment and create high-skill jobs. The letter highlights that Canada's current 83% clean electricity provides a head start over G20 peers, but warns that the country must accelerate its transition to avoid losing investment to the US. It further asserts that a net zero economy will reduce household energy costs through technologies like heat pumps and electric vehicles.

The Canadian Climate Institute outlines five key areas of concern regarding the federal Clean Electricity Regulations (CER), including the treatment of gas-powered facilities built after 2025, the 'prescribed' lifespan of existing gas plants, rules for using gas to balance renewables, the management of post-2035 residual emissions, and the potential shift from output-based to full carbon pricing for the electricity sector.

The document argues that clean electricity is essential for Canada to reach its climate targets, noting that switching from fossil fuels to clean electricity alone could contribute 37 per cent toward the 2050 net zero goal. It highlights that Canadians are projected to spend 12 per cent less on energy by 2050 due to the efficiency of electric vehicles and heat pumps. The text asserts that a net zero electricity grid by 2035 is achievable and necessary for economic competitiveness, particularly relative to the United States. Furthermore, it notes that the federal government has allocated over $30 billion to support provinces and territories in upgrading grids, with solar and wind already being competitive or cheaper than natural gas in Alberta and Ontario.

The Canadian Climate Institute asserts that a clean electricity grid is essential for Canada to reach its climate goals, noting that transitioning from fossil fuels to clean electricity alone would achieve 37% of the 2050 net-zero target. The document highlights that Canada's grid is already 84% clean and that wind and solar are becoming the cheapest options in provinces like Ontario and Alberta. It emphasizes that federal investment, including over $30 billion for provinces and territories, is critical to maintaining competitiveness against the United States, which also aims for net-zero electricity by 2035.

The Canadian Climate Institute's analysis indicates that CCS projects in the oilsands sector are economically viable under current and proposed federal and provincial policies, including carbon pricing and investment tax credits. The study finds that these projects can generate substantial private returns, suggesting that additional public subsidies beyond those already announced are unnecessary and could lead to excessive corporate profits. While CCS can improve carbon competitiveness and reduce the risk of stranded assets in a declining global oil market, it does not eliminate long-term transition risks associated with the Paris Agreement goals.

The author argues that Canada's commitments to phase out fossil fuel subsidies conflict with growing public funding for emission reduction technologies like carbon capture, utilization and storage (CCUS). To manage the risk of stranded assets and inefficient spending, the paper suggests a rigorous framework based on net-zero consistency, economic value relative to alternatives, community vulnerability, and the risk level of the policy tool used. It emphasizes that the burden of proof for public benefit should lie with the companies seeking support.

The Canadian Climate Institute argues that for Canada to meet its net-zero goals, the oil and gas sector requires transformational investment. It proposes a two-tier requirement system for the federal government's Sustainable Finance Action Council (SFAC) climate investment taxonomy: company-level net-zero targets and project-level emissions-intensity benchmarks. Specifically, it argues that "transition" labels should only apply to projects that reduce emissions from existing production, as 1.5°C pathways necessitate "no investments in new production."

The analysis finds that CCS projects in Canadian oil sands are economically viable under current and proposed climate policies, such as carbon pricing and investment tax credits, potentially offering private returns of up to 21%. Consequently, the authors argue that additional public funding beyond what is already announced is unnecessary and could lead to excessive corporate profits. While CCS improves the carbon intensity of oil sands production, it does not eliminate the long-term transition risk associated with declining global oil demand.

The author argues that Canada's goal to eliminate fossil fuel subsidies may conflict with its plans to cap oil and gas emissions and maintain sustainable jobs. To resolve this, the document suggests a rigorous framework to ensure public funds are not wasted on assets that may become stranded due to declining global demand. The proposed framework evaluates project alignment with net-zero scenarios, comparative economic value against clean energy alternatives, impacts on worker and community vulnerability, and the matching of policy instruments to project risk levels.

The Canada Growth Fund (CGF), a $15 billion 'green bank' designed to catalyze private investment for Canada's net-zero transition, will be managed by the Public Sector Pension Investment Board (PSP Investments). The author warns that CGF's success depends on avoiding PSP's 'business as usual' focus on private returns, as CGF must prioritize social returns and accept higher risks through concessional finance. To mitigate the risk of conflating these mandates, the document recommends a transparent investment strategy co-written by policy and finance experts, a diverse decision-making committee with expertise in climate policy and low-carbon technology, and clear accountability structures that separate the Fund's policy goals from PSP's fiduciary duties to pension beneficiaries.