Response to parliamentary committees an external audits
Response to audits conducted by the Office of the Auditor General of Canada (including audits conducted by the Commissioner of the Environment and Sustainable Development)
Report 1—The Zero Emission Vehicle Infrastructure Program—Natural Resources Canada
The objective of this audit was to determine whether Natural Resources Canada designed and implemented the Zero Emission Vehicle Infrastructure Program to support the deployment of accessible and reliable electric vehicle charging infrastructure for light-duty vehicles throughout Canada.
The responses to the recommendations are included in the CESD report.
The objective of this audit was to determine whether the selected federal entities contributed to meeting the target of zero-emission vehicles in the federal administrative fleet under the Greening Government goal in the 2019–2022 Federal Sustainable Development Strategy and related to target 12.7 (to promote public procurement practices that are sustainable) under the United Nations’ Sustainable Development Goal 12 (Responsible Consumption and Production), as applicable to each entity.
There were no recommendations for Natural Resources Canada.
Report 3—Canadian Net-Zero Emissions Accountability Act—2030 Emissions Reduction Plan
The objective of this audit was to determine whether Environment and Climate Change Canada, in consultation with key federal organizations, designed a credible and inclusive 2030 Emissions Reduction Plan and whether responsible organizations had implemented selected measures to meet the greenhouse gas emission reduction targets.
There were no recommendations for Natural Resources Canada.
Report 4—Greening of Building Materials in Public Infrastructure
The objective of this audit was to determine whether Public Services and Procurement Canada, the Treasury Board of Canada Secretariat, Natural Resources Canada, and Infrastructure Canada had used the Government of Canada’s purchasing power effectively to support and prioritize the use of low embodied carbon construction materials, in particular steel, aluminum, and concrete, in public infrastructure projects in order to contribute to environmental protection and sustainable development.
There were no recommendations for Natural Resources Canada.
Response to audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages
There were no audits in 2023–24 requiring a response.
Response to parliamentary committees
Summary
In October 2023, the Environment and Sustainable Development (ENVI) Committee of the House of Commons tabled a report with recommendations on how to improve on efforts to support the decarbonization of Canada’s economy, and the commercialization and adoption of Canadian clean energy technologies.
On behalf of the Government of Canada, NRCan coordinated the Government Response to the seventeen recommendations in this report. This information was captured in the Government Response that was tabled in Parliament in February 2024.
The information in this Departmental Results Report captures actions taken by NRCan in FY 2023/24 that are relevant to one or more of the Committee’s recommendations from October 2023.
Actions taken to address Recommendation #1:
NRCan undertook three types of activities to support the deployment of renewable and non-emitting energy sources to optimize the electricity grid, as well as collaboration and funding related to interprovincial electricity transmission:
- Convening: Launching regional dialogue processes, Canada Electricity Advisory Council, Nuclear Energy Leadership Table.
- Investment: Supported Finance Canada to design various clean economy investment tax credits while managing a range of programs to support a clean, resilient and affordable electricity system (e.g. Smart Renewables and Electrification Pathways Program; Clean Energy for Indigenous, Rural and Remote Communities Program; Smart Grid Program; Enabling Small Modular Reactors Program; etc.)
- Regulation: Supported various federal regulatory initiatives with technical and policy expertise (e.g. proposal for Clean Electricity Regulations).
Actions taken to address Recommendation #2:
NRCan’s Smart Renewables and Electrification Pathways Program (SREPs) provides approximately $4.5 billion until 2035 for smart renewable energy and electrical grid modernization projects. Projects must use market-ready technologies whose impact on GHG emissions is well documented and well understood.
Actions taken to address Recommendation #5:
NRCan supported a number of economy-wide initiatives to support deployment and uptake of proven technologies to decarbonize the Canadian economy, including work with Finance Canada to design various Clean Economy Investment Tax Credits that support clean technology adoption across several areas. As well, the department delivers on programs like the $1.5 billion Clean Fuels Fund. NRCan also supported provincial and territorial efforts through the regional dialogue processes and a range of established federal, provincial and territorial collaboration mechanisms (e.g. Energy and Mines Ministers Conference, Council of Energy Ministers, etc.).
NRCan led efforts to decarbonize specific economic sectors through initiatives like Canada’s Methane Strategy, the provision of funding for the infrastructure needed by zero-emission vehicles and building decarbonization programs such as the Oil to Heat Pump Affordability Grant.
Actions taken to address Recommendation #6:
NRCan’s Local Energy Efficiency Partnerships (LEEP) accelerates energy efficient construction by enabling builders to reduce their time and risk finding and trying innovations that can help them build higher performance homes better, faster and more affordably.
NRCan’s Green Construction through Wood program (renewed in Budget 2023) supports decarbonization efforts in Canada’s built environment. The program launched an Expression of Interest (EOI) for innovative, low-carbon demonstration projects starting in August 2023 and received 140 EOIs to demonstrate novel low-carbon housing, prefabricated and modular buildings, retrofits and advanced bio-based products.
Actions taken to address Recommendation #7:
Two NRCan programs made significant efforts to offer more flexibility and strive for faster approval times, without compromising on due diligence processes and sound financial stewardship of public funds: the Energy Innovation Program and Wah-ila-toos.
Actions taken to address Recommendation #8:
The Oil to Heat Pump Affordability Program, launched in spring 2023, provided upfront grants to help low- to median-income households switch from oil heating to electric cold climate air source heat pumps. All eligible homeowners across Canada could receive up to $10,000 in federal support towards their heat pump conversion.
Funds were co-delivered via provincial programs in Nova Scotia, Prince Edward Island, and Newfoundland and Labrador, and delivered via an NRCan-run national portal in the rest of Canada.
Actions taken to address Recommendation #9:
For the Emissions Reduction Fund Onshore Program, proponents were required to provide detailed information to NRCan upon project completion, including direct and indirect jobs associated with the project (as well as employment diversity) through the project completion report.
NRCan’s SREPs program went further, incorporating job-creation and/or equity, diversity and inclusion elements into the contribution agreement with funded recipients.
Actions taken to address Recommendation #10:
The Canadian Critical Minerals Strategy supported efforts to build sustainable infrastructure and grow a diverse workforce and prosperous communities as two of its five focus areas. Under this Strategy, the Strategic Innovation Fund and the Critical Minerals Research, Development and Demonstration Program have supported projects that contribute to developing the value chain for clean technologies such as electric vehicles, advanced batteries and solar and wind energy.
Actions taken to address Recommendation #13:
In collaboration with ECCC and other departments and agencies, NRCan developed the Open Science and Data Platform (OSDP), a single-window tool, providing access to over 170,000 records of information (as of 2023-2024). This has allowed Canadians to better understand cumulative effects and the impact of development activities or major development projects in Canada, in recognition of the need to advance the implementation of the Impact Assessment Act and enhance regulatory efficiency, especially for clean growth projects.
NRCan also worked with the Impact Assessment Agency of Canada, as well as the provinces and territories, on regulatory efficiency. It is also the lead for the Critical Minerals Concierge Service for Federal Regulations, which helped project proponents navigate the federal regulatory process.
Under the Regulatory and Permitting Efficiency Action Plan, NRCan was responsible for four key areas of work including:
- Reduce Duplication: NRCan led a pilot collaboration with provinces and Indigenous groups using Regional Environmental and Resource Tables (RERTs)
- Increase Permitting Efficiency: NRCan led the delivery of explosives licences and permits in a coordinated and timely manner (within two years)
Actions taken to address Recommendation #14:
NRCan conducted an assessment of potential competitive impacts of the U.S. Inflation Reduction Act after its passage in 2022, which provided an initial view of how Canadian industries, including but not limited to clean tech, may be impacted by this historic measure.
Actions taken to address Recommendation #16:
NRCan ran the Science and Technology Internship Program (STIP)-Green Jobs, which provides funding to employers in the natural resources sector, including in clean technology, to create green jobs and training opportunities for youth (15-30).
In 2023-24, the program delivered $14.4M and created 653 green jobs and training opportunities for youth. Over 80% of participants were from at least one employment equity group, including 52% participation by women.
Actions taken to address Recommendation #17:
NRCan participated in two relevant interdepartmental initiatives, the Indigenous Off-Diesel Initiative and Clean Energy for Rural and Remote Communities.
There were no actions for NRCan related to Recommendations 3, 4, 11, 12 or 15.
The complete government response is available online.
Summary
In 2023, the Standing Committee on Natural Resources (the Committee) initiated an in-depth study on the issue of Canada's energy transformation, with a focus on ensuring that the shift towards a net-zero economy is both fair and equitable. The Committee consulted extensively with industry leaders, Indigenous communities, environmental organizations, and workers from across the country. In 2024, additional testimonies were gathered, particularly from those whose livelihoods are directly impacted by the ongoing changes in the energy sector.
The transformation of Canada’s energy sector is already underway, with significant implications for workers, communities, and industries across the country. This report provides a detailed account of the impacts observed so far and presents specific policy recommendations that the Committee believes are necessary to achieve a fair and equitable energy transition. The report emphasizes the need for targeted support for affected workers, investment in clean energy infrastructure, and meaningful engagement with Indigenous communities to address the social and economic challenges associated with this transition.
Corrective Actions
The Government of Canada is advancing systemic changes to support the transition to a low-carbon economy and to ensure that Canadian workers and communities are positioned to thrive in a net-zero emissions future.
Following the Royal Assent of the Canadian Sustainable Jobs Act in June 2024, the Government has taken concrete steps to implement the Act through the establishment of the governance, accountability, and engagement framework to better position the Government to take continued action to support workers and communities in the move towards a low-carbon economy. Following an Order-in-Council decision that the Minister of Natural Resources be the responsible minister under the Act, a Sustainable Jobs Secretariat has been established within Natural Resources Canada (NRCan) to coordinate the implementation of the Government’s interim Sustainable Jobs Plan and to facilitate the development of the 2025 Sustainable Jobs Action Plan. The Secretariat is also working to establish the Sustainable Jobs Partnership Council; the notice of opportunity has launched and there are ongoing information sessions underway to support stakeholder interest.
The Sustainable Jobs Secretariat is coordinating labour market and industry analyses to assess the implications of the net-zero transition. This work is informed by evaluations of initiatives like the Canadian Coal Transition Initiative and aims to address the impacts on communities, including coal-dependent regions.
The Government of Canada is also advancing nationally driven, regionally focused efforts to identify and accelerate shared economic priorities for a low-carbon future in the energy and resource sectors through the Regional Energy and Resource Tables (Regional Tables).
Significant investments have been made to support clean growth and workforce development. Following the release of Budget 2024, the Government of Canada has now committed over $160 billion in investments in clean growth and emissions reduction measures since 2015. Budgets 2023 and 2024 make transformative investments to deliver cleaner and more affordable energy, support investment in our communities and the creation of good-paying, high-quality jobs, and ensure Canadian workers are able to produce and provide the goods and services that Canadians and our global partners need.
Additionally, the Sustainable Jobs Training Fund and the Sustainable Jobs Stream under the Union Training and Innovation Program were launched in 2024 to help workers gain the necessary skills for the low-carbon economy, building on previous skills development initiatives and investments, including for the low-carbon economy.
On Indigenous participation in – and ownership of – clean energy and natural resources projects, Budget 2024 proposed to build on previous investments for the National Benefits-Sharing Framework and development of an Economic Reconciliation Framework, including through the launch of the Indigenous Loan Guarantee Program with up to $5 billion in loan guarantees to unlock access to capital for Indigenous communities.
The Sustainable Jobs Secretariat is evaluating further policy measures to be included in the 2025 Sustainable Jobs Action Plan, which will be informed by ongoing stakeholder engagement, including with Indigenous partners.
The complete government response to is available online.
Summary
Canada’s natural resources sectors contribute significantly to economic growth and play a vital role in creating jobs and prosperity for Canadians. Looking ahead, decarbonizing natural resources sectors is essential for meeting Canada’s climate targets, environmental sustainability, and new economic opportunities.
The ability of Canada’s natural resources sectors to compete in global markets will require adapting to shifting global demand patterns, especially in emerging markets, as well as responding to incentive structures by other governments. An example is the 2022 U.S. Inflation Reduction Act (IRA) that authorized significant incentives and investments for the U.S. energy transition.
Actions Taken to Address Recommendation 1
Since 2022, the Government has announced significant investments to support clean energy and secure Canada’s competitiveness in light of the U.S. IRA. Canada’s approach to clean energy involves a broad mix of tools, including regulatory tools; Investment Tax Credits (ITCs); strategic finance; and targeted programming.
For Budget 2023, the federal government is delivering, on a priority basis, a suite of major economic Investment Tax Credits (ITC), namely the Carbon Capture, Utilisation and Storage ITC, Clean Technology ITC, Clean Technology Manufacturing ITC and Clean Hydrogen ITC. The suite of ITCs represent $93 billion in federal incentives by 2034–35, and will play an essential role in attracting investment, supporting Canadian innovation, creating jobs and driving Canada’s economy toward net zero by 2050.
Budget 2024 announced the proposed Clean Electricity ITC for investments in certain systems and equipment used for electricity generation, stationary electricity storage, and transmission of electricity between provinces and territories and the recapitalization of the Smart Renewables and Electrification Pathways Program (SREPs). Combined with previously announced tax measures (i.e., the Carbon Capture, Utilisation and Storage ITC, Clean Technology ITC, Clean Hydrogen ITC, and Corporate Income Tax Rate Reduction for Zero-Emission Technology Manufacturers) and other targeted programs, such as the aforementioned SREPs, Canada has made significant progress in responding to the competitiveness impact of the IRA.
Finally, Budget 2024 provided a mandate for Crown corporations to better address market gaps by taking on more risk for high-growth businesses and emerging sectors (such as clean technology and critical minerals), among other areas. Budget 2024 also provides for an EV Supply Chain investment tax credit and improves access to the CTM-ITC for critical mineral projects.
Actions Taken to Address Recommendation 2
The Government of Canada is advancing nationally driven, regionally focused efforts to identify and accelerate shared economic priorities for a low-carbon future in the energy and resource sectors through the Regional Energy and Resource Tables (Regional Tables).
Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) supports Indigenous engagement in policy development through various tools, information systems, and guidance on engagement, consultation, and accommodation with Indigenous peoples, enhancing project scoping, relationships, approvals, and government response to Indigenous rights impacts.
Budget 2023 committed to improving the efficiency of impact assessment and permitting processes for major projects by clarifying and reducing timelines, mitigating inefficiencies, and strengthening engagement and partnerships. It also supported enhancing Northern regulatory processes, creating a First Nations-led National Land Registry, and deepening engagement with Indigenous partners.
The Government of Canada has also recently intensified its efforts to provide greater certainty for investors including through the establishment of the Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects in 2023. The Ministerial Working Group aims to support the development of clean growth projects, bolster Canada’s net-zero commitments, and enhance investor confidence.
In conjunction with the Action Plan, a new "Cabinet Directive on Regulatory and Permitting Efficiency for Clean Growth Projects" was released. This directive intends to drive a cultural shift in federal regulatory processes, ensuring that assessment and permitting procedures are more efficient and timelier. By doing so, we aim to secure investments, attract and accelerate clean growth projects, and lay the foundation for long-term success for future generations.
Actions Taken to Address Recommendation 3
To support Indigenous knowledge-gathering about natural resources in their territories, the Government leads several initiatives to support Indigenous-led environmental protection and conservation measures, including:
- the Indigenous Guardians, to support environmental protection through Indigenous-led governance;
- the Indigenous-Led Area-Based Conservation, which provides funding for the implementation of conservation measures; and
- the Indigenous Protected and Conserved Areas (IPCAs), or another preferred term (e.g., Inuit Protected Area) where Indigenous governments have the primary role in protecting and conserving ecosystems through Indigenous laws, governance, and science.
Budgets 2023 and 2022 designated funding for Indigenous-led conservation, strengthening relationships with and providing loans to Indigenous Partners.
Budget 2023 also renewed the Indigenous Forestry Initiative (IFI), which supports Indigenous awareness, influence, inclusion, and leadership in the forest sector through Grants and Contributions funding in the mining sector.
There were no recommended actions for NRCan within Recommendation 4.
Actions Taken to Address Recommendation 4
In July 2023, the Government of Canada announced the publication of the Inefficient Fossil Fuel Subsidies Self-Review Assessment Framework and Guidelines, delivering on the Government’s G7 and G20 commitments to phase out inefficient fossil fuel subsidies.
In addition to the Assessment Framework, Guidelines were published to achieve two objectives related to Canada's G7 and G20 commitments to eliminate inefficient fossil fuel subsidies: avoid creating new measures that would be considered inefficient fossil fuel subsidies; and ensure existing policies and programs no longer support the fossil fuel sector unless they are aligned with the Assessment Framework.
These Guidelines now apply to all federal departments and agencies and will avoid the creation of any new inefficient fossil fuel subsidies.
Canada has committed to undertake a peer review of its assessment of federal inefficient fossil fuel subsidies through the G20 process. As part of the peer review process under the G20, Canada will prepare a self-review report, which will be examined by an international review panel.
As part of the peer review under the G20 process, Canada will prepare a self-review report which will be examined by an international peer review panel, which generally includes the partner country and potentially other countries and international organizations, including the Organisation for Economic Co-operation (OECD).
Regarding additional work to eliminate support for the fossil fuel energy sector, Canada plans to develop an implementation plan to phase out public financing of the fossil fuel sector, including by federal Crown corporations, by Fall 2024.
The complete government response to is available online.
Standing Committee on Science and Research: Report 3 – Small Modular Nuclear Reactors
Summary
In February 2023, the Standing Committee on Science and Research issued a report on Small Modular Nuclear Reactors (SMRs). The Report examines various aspects of SMR development in Canada, with particular focus on the areas of science and research. The report also examines SMRs in relation to environmental considerations, its economic model and labour needs, as well as community engagement.
The Government of Canada recognizes the value nuclear innovation such as SMRs will bring to Canada’s economy and net zero goals, and broadly agrees with the recommendations made in the report.
Canada has offered funding through several programs to support SMR projects through the research, development, and deployment phases and is committed to ensuring SMRs are responsibly fueled and decommissioned, and that waste is responsibly managed.
To support these endeavors, Natural Resources Canada (NRCan) is working with Indigenous communities and organizations, provinces and territories, industry stakeholders, utilities, academia, and other interested parties to make sure our approach to nuclear energy development is responsible and well-informed.
Actions By Theme:
Theme 1: Funding support towards small modular nuclear reactors (Recommendations 1,2, and 5)
The Government of Canada is continuing to support SMR development and deployment through several policy and funding actions, by working to maximize eligibility for nuclear technology (including SMRs) under the clean economy Investment Tax Credits, notably the Clean Technology ITC, the Clean Technology Manufacturing ITC, and the Clean Electricity ITC, the first two of which have now been passed into law.
In February 2024, Canada became the first sovereign borrower to make certain nuclear energy expenditures eligible to receive green bond proceeds under Green Bond Framework.
Theme 2: Nuclear research and development for small modular nuclear reactors, including waste management (Recommendations 3 and 4)
Canadian Nuclear Laboratories (CNL) is undertaking work to monitor the research and development of technologies related to the reprocessing of spent CANDU fuel, and the Government of Canada remains receptive to exploring the science, benefits, and risks associated with potential technologies.
Theme 3: Engagement with Provinces and Indigenous Peoples (Recommendations 6, 7 and 8)
NRCan’s work on nuclear energy deployment will continue to include meaningful engagement and consultation with Indigenous communities, interested provinces, territories, private industry, and utilities.
The complete government response is available online.
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