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Carbon policy in Canada went through an important transition in 2012.

The federal government began to fully assert its vision of carbon policy, while a number of provinces charted new directions in the post-Kyoto era. On paper, Canada is moving to reduce emissions, with more policy action in 2012 by the federal government than in any previous year. Yet policy trends suggest that federal and provincial GHG regulatory processes are becoming increasingly complex. A trend towards accommodating the historical patchwork of provincial policy is pushing the country down a path of further fragmentation, increasing the risk of high-cost compliance and decreasing the likelihood of meeting Canada's aspirational GHG targets. However, early signs of policy coordination and carbon bridges between jurisdictions have begun to emerge, holding promise for efficient policy in the longer term. In this note, IISD recaps Canada's carbon policy year in review, identifies four key trends and presents a series of policy recommendations for 2013.