By Julius Melnitzer | June 16, 2021
Make no mistake about it: Bill C-12, the federal legislation designed to achieve net-zero greenhouse gas emissions is nothing more than a top-down mandate focused on making net zero emissions commitment the obligation of the federal government.
“What Bill C-12 doesn’t tell us is how the federal government will require provinces to implement the targets in the legislation,” said Mohammad Ali Raza, a partner in Cox & Palmer’s Halifax office. “What is clear in Nova Scotia, at least, is that the province cannot participate in the reductions without a host of new legislation and significant changes to provincial infrastructure.”
“Bill C-12 aims to hold the federal government accountable for achieving net-zero by 2050, but doesn’t take this historic opportunity to institutionalize the effort-sharing conversation, let alone push for the co-operative federalism that the challenge of climate change requires,” writes Julia Croome, a lawyer with Ecojustice, in an organizational newsletter published soon after Bill C-12’s introduction in November 2020.
To be sure, the legislation, more fully called the Canadian Net-Zero Emissions Accountability Act, is hardly in its final form. It has only recently passed second reading and is now before the Standing Committee on Environment and Sustainable Development — the place where amendments are most likely to emerge.
Ecojustice, for one, is calling for greater recognition of the need for co-operation.
“Bill C-12 should incentivize and facilitate provincial ambition and recognize shared action,” Croome writes. “It must also require transparency about the status and direction of greenhouse gas emissions in sub-national jurisdictions.”
Amendments dealing with provincial implementation are unlikely, however, largely because they are too unwieldy and would require extensive consultation.
“The federal government can only do so much, because ultimately the business and management of industry is a provincial matter,” said Jason Kroft, a partner in Stikeman Elliott LLP’s Toronto office.
Still, the evolution of the country’s carbon-pricing framework provides an interesting analogy for how Bill C-12 might play out.
“Every province developed its own carbon-pricing regime, but it all had to be co-ordinated at the federal level,” Raza said.
Inevitably, then, the economic and industrial backbones of individual provinces will produce tailor-made custom solutions.
“Some provinces have high greenhouse gas emissions, while others have a relatively low footprint,” Raza said. “So each province will have to discuss strategies for reform with their core industries.”
But Kroft worries that the politics that accompany regional considerations will water down the net-zero initiative.
“Ultimately, it will come down to how much discretion the feds have to say to the provinces that their regimes are not strict enough,” he said. “Because although the Supreme Court has affirmed the federal mandate over climate change, the ways in which programs are implemented in a granular way are still open territory.”
Aggravating the situation is the reality that compliance with federal standards for net-zero targets will be daunting — even putting aside the reality that Canada has missed every climate target it has set in the last 30 years. The federal government recently pledged to cut the country’s carbon-related emissions by 40 to 45 per cent below 2005 levels, up from its previous target of 36 per cent.
“The net-zero target is far more challenging than conforming with federal carbon-pricing legislation,” Raza said.
The NDP, which has been critical of the legislation as it says it lacks short-term accountability, is aiding the government in pushing the bill into the Senate.
By working with the opposition party, Environment Minister Jonathan Wilkinson said the government will accept changes to the bill, which the NDP says includes climate progress reports in 2023 and 2025, as well as an “interim emissions objective” for 2026.
The Greens have so far voted against the Liberal legislation, as have the Conservatives, who say the influence of “climate activists” on a government-appointed advisory panel could harm the oil and gas sector.
Among the challenges are the varying inputs and costs that individual businesses will experience in managing their carbon exposure.
“What we do know is that carbon emission exposure will increase under Bill C-12,” Kroft said. “So the question becomes how you manage that.”
The options are diverse: businesses can choose to emit less carbon, perhaps through the way they operate their facilities; they can diversify, acquiring other entities that have a net benefit that reduces enterprise exposure; or they might invest in carbon offset projects as compliance instruments.
But choosing between the options will, to some extent, depend on the frameworks adopted by provincial governments — as approved in Ottawa.
All this having been said, Bill C-12 likely presents at least as much opportunity as it does risk.
“It’s really a huge chance for startups and tech companies to commercialize their technology,” Raza said. “In Nova Scotia alone, we have people working on waste reduction, eco-friendly proteins and ocean-related technologies to further reduce the carbon footprint in fisheries, among other things.”
With files from The Canadian Press