Funding gov’t climate change programs costly for Canadians

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Finding out how much Canadians pay government programs on climate change This is difficult because information is spread across three levels of government in Canada.

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However, the estimated cost of federal, provincial and territorial programs alone (excluding municipal governments) is $503 billion, or $12,062 per Canadian.

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To arrive at this figure, I use former federal Environment Minister Stephen Guilbault's April 14, 2023 statement that that year's federal budget, “representing the largest package of climate commitments in Canadian history, will require a total federal investment of more than $200 billion” since the Liberals were elected in 2015.

This will fund 149 programs administered by 13 federal departments.

Provincial/territorial spending on the 364 programs is estimated at $303 billion, based on data from the Canadian Climate Institute and Navius ​​Research, cited by former energy consultant Robert Lyman in a May 15, 2024 Financial Post column.

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(This estimate would put total federal spending on climate change programs at $172.8 billion, slightly below Guilbeault's $200 billion figure. In this case, combined federal and provincial/territorial spending would be $475.8 billion, or $11,410 per Canadian, with the exact amount depending on which province a person lives in.)

But these numbers are just the cost of funding government programs, not the cost of the impact of those programs on the economy.

In a report from the Fraser Institute In January 2025, University of Guelph economics professor Ross McKitrick estimated that the federal policy to reduce industrial greenhouse gas emissions in Canada to net zero by 2050 would cost each Canadian worker $8,000 per year in 2050 due to its negative impact on the economy, resulting in a 6.2% reduction in Canada's GDP and the loss of 254,000 jobs.

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In July 2024, McKittrick estimated that the government's interim goal of cutting emissions at least 40% below 2005 levels by 2030 would cost the average Canadian worker $6,700 per year.

While Prime Minister Mark Carney is committed to achieving net-zero emissions by 2050, he has not committed to meeting former Prime Minister Justin Trudeau's 2030 goal.

Carney will present the strategy soon

After repealing Trudeau's consumer carbon tax in March, Carney is set to unveil a “climate competitiveness strategy” that he says will center around an expanded and improved industrial carbon tax.

With Canada's emissions 8.5 per cent below 2005 levels as of last year, two major monitoring agencies – the Canadian Climate Institute and the Trottier Institute of Energy at Montreal Polytechnique – recently concluded that the 2030 target is unattainable and that emissions reductions will be about half of the 40 per cent target.

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In terms of total public and private sector investment required to achieve the Canadian target net zero emissions by 2050In their April 2022 budget, the Liberals said Canada would need an annual investment of $125 billion to $140 billion, up from $15 billion to $25 billion today.

The cost is estimated at about $2 trillion over three decades.

In October 2021, RBC estimated the cost to be approximately $2 trillion over the next three decades, requiring investment of at least $60 billion annually from governments, businesses and communities.

Proponents of these initiatives argue that focusing only on costs does not take into account the damage that increasingly severe weather will cause to the economy if we do not address climate change, as well as the new jobs and economic activity that will be created by investing in green technologies.

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However, as a parliamentary budget official noted in October 2024, “Canada's own emissions (about 1.4% of the global total) are not large enough to have a significant impact on climate change, and therefore reductions would not have a significant impact on the Canadian economy” without global action.

Global energy-related greenhouse gas emissions will reach a record high of 37.8 billion tons in 2024, according to the International Energy Commission.

In a report released last month, the United Nations estimated that global emissions would fall 17% below 1990 levels by 2035, well below the 60% target.

In terms of stimulating Canada's economy, the federal government said last year the annual hit to the Canadian economy would reach nearly 1% of GDP by 2030, or $25 billion.

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