2021 Reports 3 to 7 of the Commissioner of the Environment and Sustainable Development to the Parliament of Canada—The Onshore Program of the Emissions Reduction Fund was not designed to achieve credible and sustainable emissions reductions

2021 Reports 3 to 7 of the Commissioner of the Environment and Sustainable Development to the Parliament of CanadaThe Onshore Program of the Emissions Reduction Fund was not designed to achieve credible and sustainable emissions reductions

Ottawa, 25 November 2021—A report released today by the Commissioner of the Environment and Sustainable Development Jerry V. DeMarco concludes that Natural Resources Canada did not design the Onshore Program of the Emissions Reduction Fund to ensure credible and sustainable reductions of greenhouse gas emissions in the oil and gas sector. The audit found that the department overestimated the reductions expected by the program.

The Onshore Program, which was part of Canada’s COVID‑19 Economic Response Plan, was intended to reduce harmful emissions while maintaining employment and encouraging investments in land‑based, oil and gas companies. The audit found that it was poorly designed because it did not link funding to net emissions reductions. For example, some companies stated in their application that they would increase their production level which would, in turn, increase emissions and play against Canada’s commitment to reducing greenhouse gas.

Also, recipient companies were not required to apply the concept of additionality—a term used to describe reductions attributed to a program that would not have happened without this program. As a result, more than half of the reductions targeted by the program had already been accounted for under the federal methane regulations. This practice misstates what the program can achieve.

“It is important that programs aimed at oil and gas companies be efficient and effective at delivering emission reductions,” said Mr. DeMarco. “Otherwise, such programs risk undermining Canada’s efforts to fight climate change.”

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The 2021 Reports of the Commissioner of the Environment and Sustainable Development, Report 4—Emissions Reduction Fund—Natural Resources Canada is available on the Office of the Auditor General of Canada website.

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