Canada must reduce emissions from oilsands to meet climate goals: OECD report

The report card from the Organization for Economic Co-operation and Development says Canada has made progress in some areas and failed in others.

Report recommends taxing emissions more broadly and expanding renewable energy

A dump truck works at the Syncrude oilsands extraction facility near Fort McMurray, Alta. Emissions from Canada's oil and gas sector now account for 26 per cent of the country's greenhouse gas emissions. (Jason Franson/The Canadian Press)

For Canada to meet its climate change goals it will have to make significant cuts to emissions from the oilsands, according to an international report card published today.

The report from the Organization for Economic Co-operation and Development (OECD) provides a detailed analysis of Canada's environmental progress from the time the last report was published in 2004 until May of this year.

It says that while Canada has made progress in some areas, it has failed in others.

"Without a drastic decrease in the emissions intensity of the oilsands industry, the projected increase in oil production may seriously risk the achievement of Canada's climate mitigation targets."

The report notes that Canada has the fourth largest greenhouse gas emissions of the OECD's 35 developed national economies.

Canada's emissions did decrease since the last report was issued, but only by 1.5 per cent compared to the OECD as a whole, which cut emissions by 4.7 per cent over the same time period.

While emissions decreased in most provinces, they surged by 18 per cent in Alberta. The report says the province is now responsible for 40 per cent of the country's emissions, due in large part to the development of the oilsands.

Emissions went down in every other province and territory except Saskatchewan, Newfoundland and Nunavut. Half of Canada's emissions now come from the oil and gas industry (26 per cent) and the transport sector (24 per cent), the report says.

"Canada is the ... third largest emitter [in the OECD] in per capita terms — and emissions show no clear sign of falling."

Taxation as a solution

The report says Canada is also falling behind when it comes to using taxes to encourage individuals and industry to reduce emissions. The country's environmental tax regime, the report says, "is far below that of other OECD member countries."

"Petrol and diesel taxes for road use are among the lowest in the OECD, fossil fuels used for electricity and heating remain untaxed or taxed at low rates in most jurisdictions and the federal excise tax on fuel-inefficient vehicles is an ineffective incentive to purchase low-emission vehicles."

The report says Canada's national carbon pricing strategy, the Pan-Canadian Framework for Clean Growth and Climate Change, will be essential to the country meeting its climate change goals.

Renewable potential

Canada's electricity sector got some better marks. About 80 per cent of the country's electricity supply comes from non-emitting sources like hydro and nuclear power. And Quebec and Manitoba get nearly their entire supply from renewable sources. 

Though "much of Canada's vast renewable energy potential remains untapped," the report says, since the early 2000s Canada has had "a remarkable expansion in wind power," giving the country the eighth largest wind power capacity in the world.

"However, this has been more than offset by rising demand from the mining and quarrying sectors, including oil and gas extraction, as well as road transport and households," the report says.


To meet the goals set out in the Paris climate accord, the report recommends several actions including expanding the national carbon tax.

"Under current plans, the carbon price would apply to between 70-80 per cent of total emissions," the report says, noting that share is higher than it is in the European Union. "However, the long-term ambition should be to ensure no significant emitters are exempt and that its coverage is as wide as possible."

It also recommends Canada do a better job of aligning its national energy policy and oilsands production with its climate change and environmental policies.

Other recommendations include:

  • Expanding the use of natural gas and biofuels for freight and passenger transport.
  • Increasing the number of zero-emission vehicles in urban areas.
  • Expanding renewable energy production.
  • Consider charging motorists fees to drive through congested urban areas.

'Proud' of our record: McKenna

Environment Minister Catherine McKenna said despite the report's findings she's "proud of what [her] government is doing on climate action and clean growth."

"We are phasing out coal, putting a price on carbon pollution and making historic investments in transit, energy efficiency and supporting Canadian companies with clean solutions," she said in an email to CBC.

"We've also expanded our national parks and protected areas. We are committed to meeting our targets, growing the economy and creating jobs, while protecting the environment for our kids and grandkids."