Canada - Climate
At a glance
Canada focuses on the intersection between climate change and gender equality
In 2020, Canada committed US$459 million of its bilateral allocable ODA to projects that targeted action against climate change as a principal or significant objective, making it the 11th-largest Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donor to the issue, in absolute terms.
Canada spent 18% of its allocable bilateral ODA on climate finance in 2020 (DAC average: 23%). This puts it in 17th place among DAC donors in terms of relative spending.
Canada’s funding commitments for climate have fluctuated in recent years, primarily due to irregularities in the timing of disbursements. A funding spike in 2016 (US$664 million) followed Canada’s pledge made ahead of the Paris Agreement to spend CA$2.7 billion (US$2.0 billion) in climate finance over five years.
Canada’s budget for climate finance remained static between its Paris Agreement pledge and FY2020/21. Then at the June 2021 G7 Summit, Canada announced it will double climate finance allocations from CA$2.7 billion (US$2.0 billion; Paris Agreement Pledge) to CA$5.3 billion (US$4.0 billion). However, as analysis by the Canadian International Development Platform suggests, the impact of this increase will depend greatly on how effectively Canada spends these additional funds.
The government announced that CA$315 million (US$235 million) of its new pledge be channeled through an initiative called “Partnering for Climate”. The program will have two funding envelopes: 1) CA$300 million (US$224 million) will go to non-governmental organizations (NGOs) in Canada engaging in international climate programming in African countries, including CA$20 million (US$15 million) to advance women’s rights and climate change adaptation and 2) CA$50 million (US$37 million) to support Indigenous peoples and organizations in Canada to advance climate action alongside Indigenous partners in low-income countries.
‘Environment and climate action’ is one of the six ‘Action areas’ outlined in Canada’s Feminist International Assistance Policy (FIAP). The government is particularly concerned with the ways women and girls are disproportionately affected by climate change. The FIAP outlines three areas of focus:
- Supporting women’s leadership and decision-making in climate change mitigation and adaptation efforts, resilience-building, and sustainable natural resource management;
- Promoting gender-sensitive climate policymaking and financing in partner countries; and
- Boosting employment and business opportunities for women in the renewable energy sector.
Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.
Each marker has three possible scores:
- Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
- Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
- Not targeted, meaning the project does not address climate change mitigation or adaptation.
Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.
Most of Canada’s financing to address climate change targets mitigation
In 2020, 81% of Canada’s climate-related bilateral ODA commitments focused on climate change mitigation. Climate change adaptation accounted for 32%. As is apparent from the relative size of these percentages, there is also a significant overlap between the two markers since projects can target both adaptation and mitigation. In 2020, 14% of Canada’s climate-related ODA was channeled toward projects tagged with both mitigation and adaptation markers (see box).
In 2020, Canada committed US$102 million, or 4% of its bilateral allocable ODA on significant funding in this sector (DAC average: 14%). 14% (US$357 million) was committed to projects which included climate change as a principal objective (DAC average: 9%). In 2020, 82% of Canada’s bilateral allocable ODA still did not target climate change or was not screened against the climate change marker.
Of the US$459 million in bilateral climate commitments in 2020, 47% went to projects in the energy sector. 32% went to projects in the agricultural sector (including forestry, fishing, and rural development; down from first place in 2019). Environmental protection and government and civil society accounted for 6% and 5% respectively.
Most of Canada’s climate financing is channeled through multilaterals
Canada contributes most of its climate financing through multilaterals. This includes contributions to the following organizations:
- Multilateral development banks (MDBs): Canada works with MDBs including the African Development Bank (AfDB), Asian Development Bank (ADB), and Inter-American Development Bank (IADB) on gender-responsive climate action and private sector investment. Recent pledges include CA$15 million (US$11 million) to the World Bank to support women-led coal transition mechanisms (March 2022) and CA$133 million (US$100 million) to the Canada-AfDB Climate Fund (March 2021).
- UN’s International Fund for Agricultural Development (IFAD): In December of 2021, Canada pledged CA$113 million (US$85 million) over 3 years to help small-scale farmers, at least half of which are women, adapt to climate change and committed a CA$340 million (US$256 million) loan to support climate-smart and gender-sensitive agriculture approaches.
- Global Environment Facility (GEF): The government considers the GEF a key mechanism to address climate change-related issues in international development. At its seventh replenishment, Canada pledged CA$229 million (US$172 million) for FY2018/19-FY2022/23.
- Green Climate Fund (GCF): The GCF supports low- and middle-income countries in reducing their greenhouse gas emissions and adapting to the impacts of climate change. In August 2019, Canada announced CA$$300 million (US$226 million) in funding for the GCF for 2020-2023.
- International Finance Corporation (IFC): In 2019, the IFC-Canada Climate Change Program was expanded to include the IFC Blended Climate Finance Program (CA$250 million or US$188 million) and the Canada-IFC Renewable Energy Program for Africa (CA$150 million or US$113 million).
Canada funds several additional climate-focused multilaterals through Environment and Climate Change Canada (ECCC). These include UN agencies such as the Multilateral Fund for the Implementation of the Montreal Protocol on Substances that Deplete the Ozone Layer, research institutions, and climate risk assessment initiatives.
GAC sets development policy, including for climate financing; Canada’s Ambassador for Climate Change plays a coordinating role
Global Affairs Canada (GAC), headed by the Minister of Foreign Affairs and the Minister of International Development under the overall guidance of the Prime Minister’s Office, leads Canada’s international development. Canada’s Ambassador for Climate Change is responsible for coordinating Canada’s efforts to promote green growth and tackle climate change internationally.
GAC works in collaboration with ECCC on international climate change-related issues. ECCC provides technical and environmental advice on GEF programming and priorities and disburses ODA to various multilateral organizations working on environmental issues.