Environmentally harmful subsidies (EHS) are working against nature positive outcomes in Canada and are a systemic barrier to achieving the federal government’s nature commitments to halt and reverse biodiversity loss by 2030, including by protecting at least 30% of Canada’s land and ocean.
Furthermore, there is a significant financing gap to support nature. In 2020, a landmark international report, Financing Nature: Closing the Global Biodiversity Financing Gap, found that governments are currently spending two to four times more per year on environmentally harmful subsidies to agriculture, forestry and fisheries than they are spending on biodiversity conservation. Adding to the challenge is a big biodiversity financing gap, with the report identifying a global funding gap of approximately $800 billion per year to achieve biodiversity conservation goals. This financing gap, coupled with perverse conservation signals, points to the need to identify high priority EHS in Canada.
Identifying federal policies and financial flows that conflict with Canada’s nature goals, and reforming or redirecting these to support nature-positive actions, would not only help advance conservation action, it could also help fill the gap in long-term funding needed to deliver on Canada’s nature commitments (see Delivering on Canada’s land and ocean protection commitments, earlier in this document). This work would build on existing federal efforts to remove or re-direct climate-unfriendly subsidies, and also help advance Canada’s climate-related commitments.
Example: Canada’s GHG Accounting System
Canada’s primary boreal and temperate forests have globally significant climate and biodiversity values. Yet scientists and environmental groups have highlighted that Canada’s current greenhouse gas (GHG) accounting system fails both to fully account for, and put a price on, GHG emissions associated with industrial logging of these ecosystems, effectively subsidising forestry practices that harm nature and the climate. Reforming this accounting framework to incent climate-friendlier logging practices like avoiding primary forests and longer harvest rotations would support globally significant nature and climate-related outcomes, and help Canada deliver on its nature and climate commitments.
Existing federal commitments
Canada has already committed to better align its policies and investments with the goal of halting and reversing biodiversity loss:
- The G7 2030 Nature Compact (June 2021) recognizes “the harmful effect of some subsidies on the environment and the need to reform policies with recognized negative impacts on nature” and commits “to lead by example by reviewing relevant domestic policies as soon as possible… and will take action as appropriate to develop replacements that are nature positive.”
- The Leaders’ Pledge for Nature (September 2020) commits signatories to “eliminate or repurpose subsidies and other incentives that are harmful to nature, biodiversity and climate while increasing significantly the incentives with positive or neutral impact for biodiversity across all productive sectors.”
- UN Convention on Biological Diversity (CBD):
- The draft Global Biodiversity Framework, currently under negotiation, includes integrating biodiversity into policies across governments, aligning financial flows with biodiversity goals, reforming harmful subsidies, and scaling up nature-positive incentives.
- Target 3 of the Strategic Plan for Biodiversity 2011-2020 committed governments to ensure that “By 2020, at the latest, incentives, including subsidies, harmful to biodiversity are eliminated, phased out or reformed in order to minimize or avoid negative impacts, and positive incentives for the conservation and sustainable use of biodiversity are developed and applied…”
- In 2023, initiate a whole-of-government review to identify expenditures, including subsidies, and fiscal policies that undermine the federal government’s nature commitments. By 2024, remove, reform or repurpose these expenditures/policies to align with and incent progress towards Canada’s nature and climate commitments. [FIN]
- Invest $3 million over two years to improve the accuracy of measurement, accounting and reporting of GHG emissions from the forestry sector (e.g., improved on-the-ground emissions monitoring), and to move towards bringing forestry emissions into Canada’s carbon pricing framework by requiring corporate level reporting of forest sector emissions. [ECCC, NRCan/CFS]