Canada is the second-largest country in the world by land area⁷⁰ and ranks 19 out of 120 countries on the ETI 2023. With an overall ETI score that has remained fairly stable over the past decade, Canada has consistently ranked among the top 25, with strong results on system performance. Specifically, Canada is a global leader on the equitable and secure aspects of energy transition, as it is a major producer and exporter of oil, gas, hydroelectricity and uranium, and has a growing renewables sector. In recent years, however, Canada has fallen behind its peer group and challenges need to be addressed to accelerate the sustainability of its energy system. The country faces high energy intensity of its economy, high levels of energy consumption per capita and higher-than-average carbon intensity. Within transition readiness, Canada has shown increasing improvement on regulation and political commitment. In fact, the country is leading with bold measures which are critical for an effective energy transition, resulting in strong scores within country commitments.

Canada’s vast geography poses challenges for transitioning to renewable energy, as many of the country’s remote and northern communities rely on diesel generators for electricity, which are expensive to operate and emit high levels of GHGs. Building renewable energy infrastructure in these areas can be costly and logistically challenging. To better understand energy usage and engage with these communities, the federal government launched the Remote Communities Energy Database in 2018.⁷¹ By providing valuable insights into energy consumption patterns and opportunities for renewable energy development, the database helps to shape the development of effective energy policies and programmes as well as support the transition to a low-carbon, sustainable energy system.

Energy production and use in Canada currently accounts for over 80% of its GHGs.⁷² Production from oil sands is highly emissions-intensive, requiring large amounts of energy and water for extraction and processing. To reduce emissions, the federal government implemented a carbon pricing scheme in 2019, targeting a range of emissions including fuel combustion, industrial processes and waste disposal. The carbon price in May 2022 stood at CAD 50 per tonne of CO2 emitted and is set to increase to CAD 170 per tonne by 2030.⁷³ Industry itself is also taking steps to reduce emissions, with oil and gas companies investing in carbon capture and storage technology. Furthermore, the federal government’s launching of funds, such as the Low Carbon Economy Fund (in which the government is investing another CAD 2.2 billion for seven years, beginning in 2022-2023)⁷⁴ and the Canada Infrastructure Bank’s strategy to invest CAD 35 billion,⁷⁵ provides support for renewable energy projects, energy efficiency measures, and research and development.

Indigenous communities play a substantial role in Canada’s energy transition. To foster collaboration and partnership between those communities and the energy sector, the government has established various programmes and initiatives, including the Indigenous Off-Diesel Initiative, which was launched in 2018⁷⁶ and aims to transition remote indigenous communities from diesel-powered electricity to cleaner energy sources. It also seeks to enhance the capacity of indigenous communities through training, technical support and other resources required to develop and operate their energy projects.

Like other major oil- and gas-exporting nations, Canada’s energy infrastructure was designed to primarily support fossil fuel production and distribution, making it challenging to integrate renewable energy into the grid. One aspect of Canada’s energy transition is its reliance on hydroelectricity, which also means its electricity is 83% non-emitting and among the cleanest in the world.⁷⁷ Many of the hydroelectric facilities, however, are located on or near Indigenous lands, which could affect the expansion of hydropower in these areas. Through careful planning, investment and community engagement, Canada could accelerate its transition towards a clean energy future and meet its GHG emissions goals. Other countries at similar levels of clean energy development could learn from Canada’s trajectory.