Canada Infrastructure Bank looks like a keener, while federal departments delivering programs to Indigenous communities are lagging performance expectations for reducing greenhouse gas (GHG) emissions. A newly released audit of 20 select initiatives in the Canadian government’s 2030 Emissions Reduction Plan concludes that just nine of them are on track to meet the targets that were set in the circa 2022 document.

There are now about six remaining years to recover lost ground and accomplish some very ambitious objectives in line with Canada’s commitment to cut GHG emissions by 40 to 45 per cent below 2005 levels by 2030. The most recently available data, as of 2022, pegs the annual emissions output at about 7 per cent lower than that baseline — or roughly 708 megatonnes (MT) versus 761 MT in 2005.

“Implementation of measures in the 2030 Emissions Reduction Plan remains insufficient to meet Canada’s target,” the independent auditor’s report states. “The federal government must pick up the pace in implementing effective measures.”

This is the second annual report since the Auditor General of Canada was tasked with scrutinizing emissions reduction progress under the Canadian Net-Zero Emissions Accountability Act. The Auditor General’s office, in alliance with the Commissioner of the Environment and Sustainable Development, also regularly conducts audits on many of the government’s affiliated activities.

In total, six different federal departments or agencies deliver the 20 initiatives, with the largest share assigned to Natural Resources Canada (8) and Environment and Climate Change Canada (5). The audit report directly links three of these to reducing emissions from buildings, including a package of policies and incentives lumped under the Canada Green Buildings Strategy, model national building and energy codes and retrofit grants for homeowners.

Some of the other examined measures are also pertinent for commercial real estate, including: Canada Infrastructure Bank’s priority investment in green infrastructure, which encompasses funding for the Building Retrofits Initiative; incentives for zero-emission vehicles and charging infrastructure; and various programs to support renewable power and a smart electricity grid, which will be critical for enabling net-zero emissions from buildings.

Auditors primarily focused on actions and outcomes in the 12 months from August 2023 to July 2024 and applied nine different criteria to assess timeliness of implementation, environmental impact, cost-effectiveness, quality control, inter -jurisdictional workability and sensitivity to vulnerable groups and Indigenous peoples. From this, they derived ratings to indicate whether implementation of emissions-reducing measures is: on track; experiencing challenges that could hinder ability to attain the targeted reduction; or encountering significant obstacles.

The 20 initiatives are also categorized based on whether they are intended to facilitate reductions in excess of or less than 0.5 MT (500,000 tonnes) by 2030. Five of the eight measures projected to curb more than 0.5 MT of emissions are deemed to be on track, but just four of the 12 measures for lower-volume reductions receive that rating.

Inter-jurisdictional disconnect complicates program adoption and uptake

All three of the programs that Canada Infrastructure Bank (CIB) delivers are considered to be on track. This involves a total funding envelope of $35 billion intended to ultimately allocate $10 billion to finance green infrastructure investments, $10 billion to finance clean power investments and $5 billion to finance low-emission public transit fleets and infrastructure.

Even so, the auditors quibble with how CIB calculates its environmental impact — noting that it claims credit for the total emissions reduction or avoidance from the projects it finances even though it is only a partial contributor of the capital funding. As well, in some cases CIB and Natural Resources Canada provide funding for the same project and auditors found that both entities claimed the total expected reductions.

“This can lead to overestimating the measure’s contribution to emissions reductions,” the report states.

The auditors found that Canada’s ubiquitous federal-provincial disconnect creates obstacles for implementing both the Canada Green Buildings Strategy and building code requirements to address energy efficiency and carbon emissions. The slow pace of code development is also undermining the objective for model national codes to result in more than 0.5 MT of emissions avoidance by 2030 since updates that were originally foreseen for the 2022 edition have now been delayed until 2025.

Historically, there can be years of lag time between the publication of the model national code and provincial adoption of the document. The auditors acknowledge that “the federal government is supporting adoption through incentives and training materials”, but characterize this measure as experiencing challenges.

Similarly, the auditors note that provincial and municipal uptake are needed to effectively roll out many of the programs in the Canada Green Buildings Strategy. It is among the audited initiatives that are projected to garner less than 0.5 MT of emissions reduction or avoidance by 2030, but the auditors conclude it is currently experiencing challenges that could further diminish those expectations.

They are also critical of the delayed release of the overarching strategy document, which enunciates three main objectives to:

• motivate retrofits of existing buildings;
• ensure that new construction complies with low-carbon, high-performance criteria; and
• nurture the skills, technologies and financing mechanisms to support the first two objectives.

The strategy was originally promised for 2023, but wasn’t released until July 2024. However, the majority of programs contained in the strategy were already in progress at that time.

Looking at potential clean power sources for the built environment, auditors found that the program for small modular nuclear reactors is behind schedule. Meanwhile, implementation of four proposed new regulations has been delayed. One of those — related to oil, gas and methane emissions — is considered still on track to achieve targeted emissions reductions by 2030. However, three others — related to clean electricity; methane emissions from landfills; and an oil and gas emissions cap — are categorized as experiencing challenges.

Recommendations for administrative improvements

The auditors recommend a government-wide consistent formula for calculating program cost-effectiveness, or “value for money”, which can parse out the cost per tonne of the resulting emissions reduction or avoidance. Thus far, delivery agents have applied this type of analysis for just eight of the 20 audited measures.

Although the report concedes that it would be challenging to pin down that metric for capacity-building programs that indirectly lead to emissions reductions, it maintains “a common way of assessing the benefits and value derived is important to understand the effectiveness and the cost to Canadians of a measure”.

The auditors also call on delivery agents to more closely monitor how programming flows through to specified user groups such as Indigenous peoples and economically vulnerable communities and demographics. Just six of 20 audited measures had tracked this data.

As well, program rollout for Indigenous peoples is behind schedule in five of the audited measures. In particular, the initiative to replace diesel-fired power generation in remote Indigenous communities is deemed to be encountering significant obstacles.

“The federal organizations told us that the COVID-19 pandemic, as well as the unique circumstances and the remoteness of communities, impacted the timely delivery of projects as planned,” the audit report states.