Policy Context

Under the Trudeau government, Canada has identified climate change as a standalone, strategic priority in its development cooperation agenda: Climate change has also been interconnected with other Canadian development priorities, notably gender equality. Canada's international efforts on climate change adaptation and mitigation are guided by its FIAP.

‘Environment and climate action’ is one of the six Action Areas outlined in Canada’s 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:

1. Supporting women’s leadership and decision-making in climate change mitigation and adaptation efforts, resilience-building, and sustainable natural resource management;
2. Promoting gender-sensitive climate policymaking and financing in partner countries; and
3. Boosting employment and business opportunities for women in the renewable energy sector.

ODA Spending

How much ODA does Canada allocate to climate projects?

In 2022, Canada allocated US$1.2 billion to commitments tagged as being principally or significantly related to climate change adaptation and/or mitigation, making it the making it the 10^th-largest OECD DAC donor to the issue, in absolute terms.

In relative terms, Canada was the 20^th-largest OECD DAC donor to climate.

How is Canada's climate ODA changing?

Canada’s funding commitments for climate have fluctuated in recent years, primarily due to irregularities in the timing of disbursements. Funding increased in 2021 to US$646 million and again in 2022 to US$1.2 billion, with 2021 being the first year of Canada's commitment to double its international climate finance to US$4.2 billion over 2021-2026.

How does Canada allocate climate ODA?

Bilateral climate-related ODA

In line with its policy, Canada's climate change-related ODA has a larger focus on adaptation than on mitigation measures. The prioritization of climate adaptation within its development policy increased under the current Trudeau government and is expected to continue as long as it remains in power.

Bilateral climate adaptation-related ODA

Both principal and significant funding have fluctuated over time, leading to a change in total adaptation-related ODA. After a peak in 2018 of US$485 million in principal funding, largely allocated to the energy sector in South and Central America, principal adaptation-related ODA dropped to a low in 2020. Significant funding was largest in 2019 and 2021, driven by contributions to the agriculture and energy sectors, mostly in sub-Saharan Africa.

More than half of Canada's adaptation-related ODA to agriculture has adaptation as a principal objective and focuses on rural development, agricultural land resources, and agricultural development. Significant funding to agriculture was largely channeled to agricultural water resources and food crop production. Funding to health is nearly exclusively significant funding, meaning that adaptation has been mainstreamed into health projects, including basic nutrition and COVID-19 control. Funding for environmental protection primarily targets environmental policy and management, while multi-sector funding prioritizes disaster risk reduction.

Multilateral Spending and Commitments

Canada contributes most of its climate financing through multilaterals, including CGIAR, IDA, FAO, WFP, IFAD, GCF, the Adaptation Fund, GEF, LDC Fund, and HIPCA.

Funding Outlook

What is the current government's outlook on climate ODA?

Canada’s budget for climate finance remained static between its Paris Agreement pledge in 2016 and FY2020/21. At the G7 Summit in June 2021, Canada announced it would double climate finance allocations from US$2.2 billion, its Paris Agreement Pledge, to US$4.2 billion. According to the Canadian government, 40% of this will be allocated to climate adaptation projects. 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.

On December 9, 2023, during COP28, Canada became part of an international coalition launched by the Netherlands to phase out fossil fuel subsidies, comprising 13 countries: Antigua and Barbuda, Austria, Belgium, Canada, Costa Rica, Denmark, Finland, France, Ireland, Luxembourg, the Netherlands, and Spain. The coalition noted three main pillars:

• Transparency: all member countries publishing an overview of their fossil fuel subsidies by COP29 in 2024;
• International agreements: identifying and addressing international barriers to phasing out fossil fuel subsidies; and
• National action: encouraging international dialogue to share knowledge, develop national strategies, and join action to minimize carbon leakage.
• In the coalition’s joint statement, various international organizations including the IMF, OECD, WTO, and World Bank were asked to develop a comprehensive methodological framework to identify the scope of international fossil fuel subsidies and to develop guidance for national phase-out strategies.

At the UN General Assembly in 2023, Canada committed an additional US$129 million to promote global climate adaptation and leadership with a focus on women and girls and US$13 million to accelerate climate adaptation and resilience across African countries.

Canada also announced new funding for climate change mitigation and adaptation in the Indo-Pacific region at the G7 Summit in June 2024, including CAD360 million ( US$277 million) in repayable contributions to the ADB to establish the Canadian Climate and Nature Fund for the Private Sector in Asia to mobilize private capital toward inclusive climate change mitigation and adaptation projects.

Key Bodies