What Canada’s pause on climate-disclosure requirements means

Key takeaways

• The intent is to lessen the financial burdens on domestic businesses in the wake of current tariff chaos.
• But at least 1,300 Canadian enterprises remain bound to submit reporting to the EU in the next three years.
• Opponents of the decision believe that the demand for credible sustainability information will continue.

Canada announced that it has paused all mandated corporate climate disclosures, citing the unstable global economy.

“In recent months, the global economic and geopolitical landscape has rapidly and significantly changed, resulting in increased uncertainty and rising competitiveness concerns for Canadian issuers,” said Stan Magidson, chair of the Canadian Securities Administrators and the Alberta Securities Commission. “In response, the CSA is focusing on initiatives to make Canadian markets more competitive, efficient and resilient.”

The announcement is in response to the slew of tariffs levied against Canada by President Trump, including a 25 percent tax on goods related to the fentanyl crisis and on steel and aluminum. Canada also announced $21 billion in retaliatory measures against U.S. goods. But whatever the cause of (potentially) thinner profit margins, the costs of climate disclosure have been deemed unaffordable, at least for now.

Not everyone in Canada, though, is fully aligned with the decision.

“We recognize that regulatory approaches may evolve in response to market conditions, but the demand for credible, comparable sustainability information continues to grow — both globally and at home,” said Wendy Berman, incoming chair of the Canadian Sustainability Standards Board. The Board finalized its sustainability disclosure standards in December 2024.

Canada’s pause is the latest in a global trend. In March, the U.S. Security and Exchange Committee (SEC) halted all court arguments in favor of its own corporate climate disclosures, and a month earlier the EU introduced an omnibus package that scaled back the reach of its own CSRD and Corporate Sustainability Due Diligence Directive.

How Canada’s decision will actually impact businesses is unclear. At least 1,300 Canadian businesses remain bound to submit reporting to the EU in the next three years. And as recently as the EU’s omnibus scale back, experts recommended that companies continue to gather emissions data for shareholders, and mandated corporate climate reporting in effect in California.

“Postponing requirements for businesses to get prepared for climate change and align with positive climate action will only leave businesses less prepared, investors less informed and Canada’s economy less competitive,” said Julie Segal, senior manager of climate finance at Environmental Defence Canada, in a statement.