A yellow sign that reads "Green ECOnomy not greed economy."
A yellow sign that reads "Green ECOnomy not greed economy." Credit: Lily Rhoads / Flickr Credit: Lily Rhoads / Flickr

Canada has a long way to go before meeting its climate goals and transitioning to a low-carbon economy.

In 2021, Canada set a new goal, the Paris Climate Agreement—by 2030, they committed to reducing greenhouse gas (GHG) emissions by 40 to 45 per cent below 2005 levels. Relative to meeting their Paris Agreement goals, Climate Action Tracker rated Canada’s overall effort to be “highly insufficient”.

Since implementing the climate policy agenda, Canada’s emissions have been trending downwards according to Climate Action Tracker. But it’s not enough to address the current climate crisis.

Environmental Defence, a Canadian environmental advocacy organization, has expressed that legislation, such as the Climate-Aligned Financial Act (CAFA) and the Sustainable Jobs Act, is necessary in securing a sustainable future for the environment and the economy.

Aligning financial institutions to climate action


“CAFA is an essential missing piece of Canada’s climate plan. Canada started on climate plans throughout the economy, but does not yet have rules to align the financial sector with climate action,” said Julie Segal, senior manager climate finance at Environmental Defence in an interview with rabble.ca.

Environmental Defence found that in 2023, the federal government invested about $18.5 billion to support fossil fuel and petrochemical companies. Additionally, Canada’s top five banks accounted for $1.1 trillion in fossil fuel financing since 2016. 

As for investments into clean and renewable energy, Canadian banks and pension funds statistically under invest. On average, financial institutions are four times less likely to invest into the renewable energy sector according to Segal.

“That paints a picture of where Canada’s banks, pension funds and insurance companies are at—It shows, regrettably, they are not yet aligned with the climate action we need to see. Canada will only meet its climate commitments if these big investors move money in line with the climate transition and stop locking us into the problem of fossil fuels,” Segal said.

“We’ve seen significant human and economic damages from climate change. Not only are they investing in ways that make climate change worse, but it’s also making a riskier economy for future Canadians,” Segal added.

According to the Intergovernmental Panel on Climate Change’s (IPCC) 2023 Climate Change Report, about 3.3 to 3.6 billion people live in areas that are highly vulnerable to climate change. Severe weather events, from drought to flood, have exacerbated food and water insecurity for millions of people. These extreme weather events also resulted in economic damages, especially climate-affected sectors such as agriculture, tourism, fishery, forestry and energy.

Canada can be a key player in the low-carbon economy—but with continued investment into the fossil fuel industry, the country could be left behind.


“Where climate and finance overlap is a regulatory void—this creates a huge liability for Canada’s climate action and financial stability. CAFA is really both a roadmap and a lifeline to fix climate finance and to reorient our financial system for climate action that’s in the best interest of people,” said Segal.

Transitioning the labour force

While CAFA would align the country’s financial sector with needed climate action, Bill C-50 or the Sustainable Jobs Act would help ease the labour force’s transition into a low-carbon economy.


“It’s really a law about what the government should do … what it does is it mandates the government to provide a certain level of support for workers and communities who are going to be impacted by the energy transition and more generally by, the economic transition that’s resulting from our global transition away from fossil fuels,” said climate and energy program manager at Environmental Defence, Aliénor Rougeot.

According to a 2022 report from the Centre for Future Work, Canada’s labour market has already been transitioning out of the fossil fuel industry. Since 2014, fossil fuel employment in Canada’s total labour market declined by one-fourth.

In 2019, under one per cent of Canada’s workforce was directly employed in the fossil fuel industry. While the total number of fossil fuel positions is relatively small compared to other sectors, it still accounted for about 170,000 workers.


“It’s just not fair to leave these workers to defend for themselves as global markets shift when we have the data that tells us these jobs are going to go away. We should be preparing workers,” said Rougeot.

“The Sustainable Jobs Act is essential because it says we know that there’s going to be a massive labor transition from people who are either going to lose their jobs or see their jobs change. With the energy transition, how are governments putting in place the supports to make that transition as smooth, orderly and compassionate as possible through direct supports to communities and workers,” Rougeot added.

The implementation of the Sustainable Jobs Act would help ensure that fossil fuel industry workers are protected throughout this labour market shift. 

Rougeot noted that the bill would result in the creation of two governing bodies. The Sustainable Job Secretariat would be responsible for delivering policies and programs including skills training and connecting employers and workers.

It would also offer income support for workers’ revenue if there were a transitional period between employment, or other options for early retirement for senior workers that do not want a new role. Other policies could include supporting clean energy projects to hire apprentices or unionized workers

Then there’s the Sustainable Jobs Partnership Council. It would encourage collaboration from various stakeholders outside of the government, including industry, workers Indigenous peoples and energy transition experts.

CAFA and the Sustainable Jobs Act are part of a bigger picture, need for political will

Despite strong public support, there have been significant delays for both legislative pieces.

CAFA has garnered five petitions of public support in the House of Commons along with hundreds of endorsements from academics, civil society groups and climate experts.

Rougeot also acknowledged that there are still some gaps in the legislation.

“From an Indigenous rights perspective, [Bill C-50] misses the mark … how are we going to make the energy transition so that it does not perpetuate the colonial injustices on Indigenous folks—that is not addressed in this bill at all,” said Rougeot.

Although more refinement to these legislative pieces or even the addition of more climate action legislation, CAFA and Bill C-50 would be steps in the right direction—it’s necessary for Canada to adopt these legislations to build a sustainable economy and environment.

Segal and Rougeot both mentioned a level of political will that needs to take place in order for these legislations to be pushed forward.

“There hasn’t been any progress on this from the government itself, which is why from the elected officials, there’s been no progress. There’s been no meaningful progress demonstrated yet on holding banks and pension funds accountable to align with the climate transition that’s being pushed in other sectors of the economy,” added Segal.

“CAFA’s really the missing piece. If you think about the way things happen, its the banks and pension funds who are allocating money on our behalf are often at the top of this decision-making tree,” Segal added.

Kiah Lucero smiling and holding a camera.

Kiah Lucero

Kiah Lucero is a multimedia journalist based out of Calgary, Alta. Back in April 2020, she completed her Bachelor of Communication, majoring in journalism from Mount Royal University. Her published work...