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SDG 9: Industry, innovation, and infrastructure

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The environmental perspective

This chapter's focus on fostering innovation and green infrastructure in Canada directly supports several SDG Global Indicator Framework targets including 9.1: Develop quality, reliable, sustainable and resilient infrastructure; 9.2: Promote inclusive and sustainable industrialization; and 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.

Canada's industrial sector is a major driver of economic activity, including income, jobs and exports. It is also a significant source of greenhouse gas emissions due to industrial processes and energy consumption. In 2019, heavy industry, such as smelting and refining, and the production and processing of industrial goods such as fertilizer, paper and cement, accounted for 11% of Canada's total emissions. However, many sectors in Canada are taking action to green their industries. For example, between 2008 and 2019, Canada's aviation industry improved its fuel efficiency by 17.8% by taking actions such as pre-heating and pre-cooling aircrafts or introducing sustainable fuels. Canadian ports are also taking a variety of actions to reduce emissions in their operations, including investing in green infrastructure that allows ships to plug into shore-power and pursuing the creation of green shipping corridors.

Some of Canada's infrastructure is aging and at risk. Investing in green infrastructure, such as low-carbon transportation, climate-resilient buildings and clean energy, helps build healthy and resilient communities, protects against a changing climate, promotes environmental sustainability and drives economic growth.

As climate change continues, green infrastructure will be increasingly important to sustain economic, environmental and social well-being. For instance, a growing network of electric vehicle chargers and natural gas and hydrogen refuelling stations will make low-carbon transportation options more accessible to Canadians. At the same time, natural infrastructure such as wetlands and marshes can help prevent climate change impacts like flash floods and support the conservation and recovery of wild species, including species at risk.

Meanwhile, investing in innovation supports Canada's transition to a net-zero economy while increasing our competitiveness. Innovation can have benefits in areas such as water, air quality, plastic waste and biodiversity, including through increased adoption of clean energy technology, increased resource efficiency and increased demand for low-carbon materials. Research, development and demonstration continues to be needed to develop new technologies and integrate them into existing systems, and to lower capital costs of solutions nearing commercial scale. Sustained innovation over the next decade and beyond will be critical to reduce the costs of technologies and processes that could enable substantial emissions cuts beyond 2030 and support future economic competitiveness.

Where the Government of Canada is going

Mandate letters released in December 2021 outline the Government of Canada's direction and policy priorities. Selected commitments related to Sustainable Development Goal 9 are listed below.

  • Implement the Net Zero Accelerator Initiative to support the strategic review of large-scale investments in order to drive industrial transition, significant reductions in greenhouse gas emissions and meaningfully transform Canadian industry (Minister of Innovation, Science and Industry; supported by the Minister of Environment and Climate Change and the Minister of Natural Resources).
  • Launch Canada's first National Infrastructure Assessment to help identify needs and priorities in the built environment and support long-term planning toward a net-zero emissions future (Minister of Intergovernmental Affairs, Infrastructure and Communities).
  • Introduce a new Buy Clean Strategy to support and prioritize the use of made-in-Canada low-carbon products in Canadian infrastructure projects (Minister of Public Services and Procurement; Minister of Intergovernmental Affairs, Infrastructure and Communities; Minister of Natural Resources).
  • Create open-access climate toolkits to help infrastructure owners and investors develop projects that contribute to Canada's path to net-zero emissions (Minister of Intergovernmental Affairs, Infrastructure and Communities).
  • Continue advancing the Social Innovation and Social Finance strategy, including fully implementing the Social Finance Fund and launching the Social Innovation Advisory Council (Minister of Families, Children and Social Development).
  • Establish a global centre for excellence on methane detection and elimination (Minister of Innovation, Science and Industry; with support from the Minister of Natural Resources).
  • Reduce pollution from transportation by adding 50,000 new electric vehicle chargers and hydrogen stations to Canada's network and supporting the installation of charging stations in existing buildings, and by making investments to retrofit large trucks currently on the road, and supporting the production, distribution and use of clean fuels, including low or zero carbon hydrogen (Minister of Natural Resources).

How the Government of Canada contributes

The federal government owns just 2.8% of the country's infrastructure. However, it plays a major role in funding, regulating and setting policies and standards for infrastructure projects. In March 2021, the government launched consultations on Canada's first-ever national infrastructure assessment. The assessment will identify needs and priorities in the built environment, and support long-term infrastructure planning. The Government of Canada is also supporting provinces, territories and municipalities with funding for green infrastructure initiatives.

Natural Infrastructure Fund

The Government of Canada is establishing a Natural Infrastructure Fund to support natural and hybrid infrastructure projects to further Canada's commitment to climate change resilience while contributing to national biodiversity goals and targets. This fund will help to improve well-being, mitigate the impacts of climate change, conserve natural landscape features, and prevent costly natural events.

The government has also launched the Green and Inclusive Community Buildings program, which aims to improve energy efficiency in existing buildings and support the construction of new net-zero ones, particularly in areas with populations with higher needs, while also making the buildings more resilient and higher-performing. This 5-year program will support green and accessible retrofits, repairs and upgrades of existing public community buildings and the construction of new publicly-accessible community buildings that serve high-needs, underserved communities across Canada.

Green bonds

As part of Budget 2021, the Government of Canada announced its plan to issue its first-ever green bond in 2021 to 2022. The inaugural green bond issuance will target $5 billion, subject to market conditions, and will be the first of many issuances. Green bonds are a specific type of bond in which the proceeds are used exclusively to fund projects with environmental and climate benefits. These investments will be used for projects such as green infrastructure, clean tech innovations and nature conservation. Work underway to design Canada's green bond framework is being led by the Department of Finance Canada and Environment and Climate Change Canada, in cooperation with Natural Resources Canada; Infrastructure Canada; Innovation, Science and Economic Development Canada; Transport Canada; Agriculture and Agri-Food Canada; Public Safety Canada; and other related Crown corporations with the support of TD Securities and HSBC as structuring advisors.

Industrial emission reduction is essential for Canada to stay competitive in an increasingly low-carbon global economy. Innovation requires investment, partnership from all levels of government, and the ability to realize the full value of intellectual property. As an example, the Strategic Innovation Fund'sNet Zero Accelerator is providing $8 billion in support of projects targeting technology adoption or development in 3 priority areas: decarbonization of large emitters, shifting Canada's industrial base in sectors such as automotive and aerospace towards a low-carbon model, and development of clean technologies, including a battery ecosystem. Further, at the COP26 climate summit in 2021, Canada joined 22 countries to commit to advance ambitious actions to reduce international aviation emissions and joined 19 countries committed to establish zero-emission green shipping corridors.

Carbon capture, utilization and storage (CCUS) offers a suite of technologies and processes that remove or capture carbon dioxide from the air or from industrial emissions in key sectors (for example, heavy industry, electricity, oil and gas), then store it underground or turn it into products such as cement or low-carbon synthetic fuels. To advance this critical pathway in Canada's transition to a net-zero economy, Canada is supporting the development and deployment of CCUS technologies, including through research, development, and deployment funding support and laboratory research as well as the development of a CCUS Strategy and a CCUS Investment Tax Credit.

Sustainable Development Technology Canada helps Canadian companies develop and deploy clean technology innovations by delivering critical funding support and promoting the development of a robust Canadian market. Since its inception in 2001, Sustainable Development Technology Canada has committed approximately $1.38 billion to almost 540 projects. The Strengthened Climate Plan included continued support to Sustainable Development Technology Canada with an additional $750 million to support startups and to scale-up companies to enable pre-commercial clean technologies to successfully demonstrate feasibility as well as to support early commercialization efforts.

Sustainable finance

Sustainable finance refers to the incorporation of climate and environmental considerations throughout financial decision making. In turn, this enables the mobilization and alignment of private sector investments towards climate and environmental objectives. In May 2021, the Government of Canada launched the Sustainable Finance Action Council (SFAC) to help lead the Canadian financial sector towards integrating sustainable finance into standard industry practice. SFAC will make recommendations on critical market infrastructure, with an initial focus on climate-related financial disclosure, green and transition investment standards, and climate data for the financial sector.

In Budget 2021, the Government of Canada announced its intention to strengthen public climate-related disclosure practices to ensure a stable and predictable transition to a net-zero economy. The government will engage with provinces and territories with the objective of making climate disclosures consistent with the Task Force on Climate-related Financial Disclosures (TCFD), as part of regular disclosure practices for a broad spectrum of the Canadian economy.

Canada's Crown corporations will also demonstrate climate leadership by adopting the TCFD standards, or complying with more rigorous and acceptable standards as applicable to the public sector at time of disclosure, as an element of their corporate reporting. To ensure Crown corporations are transparent about issues that matter to Canadians, Budget 2021 announced that Crown corporations will be required to implement gender and diversity reporting beginning in 2022.

Recognizing the importance of nature, the Government of Canada has joined the Task Force on Nature-related Financial Disclosures, which will provide a similar framework to the TCFD, but with an aim to support corporate and financial institutions to assess, manage and report on their dependencies and impacts on nature.

Thawing permafrost in Canada's Arctic coastal communities

Warming caused by climate change will have a disproportionate impact on infrastructure in Canada's Arctic coastal communities due to the thawing of permafrost. Permafrost is a layer of earth beneath the surface that remains frozen for more than 2 consecutive years. As permafrost thaws, it can cause the surface to shift and destabilize. This in turn causes the foundation of buildings and other forms of infrastructure such as roads and airports to sink and crack, impacts water flow and absorption, and leaves shorelines more susceptible to erosion from wave activity. In regions such as Nunavut, where infrastructure has been designed specifically for stable permafrost conditions, significant investments will be needed to meet the infrastructure challenges posed by climate change.

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2022-2026 FSDS

Draft Federal Sustainable Development Strategy 2022-2026