Horizontal Initiative - Natural Climate Solutions Fund

General Information
Name of horizontal initiative	Natural Climate Solutions Fund (NCSF)
Lead department	Natural Resources Canada (NRCan)
Federal partner departments	Environment and Climate Change Canada (ECCC) Agriculture and Agri-Food Canada (AAFC)
Start date of the horizontal initiative	2021-22
End date of the horizontal initiative	2030-31^{Footnote 1}
Description of the horizontal initiative	Canada’s Natural Climate Solutions Fund (NCSF) is a horizontal initiative established to leverage the inherent ability of natural ecosystems to sequester carbon and reduce atmospheric greenhouse gas (GHG) concentrations. This initiative includes three separate but related, programs: Natural Resources Canada’s (NRCan) 2 Billion Trees program, Environment and Climate Change Canada’s (ECCC) Nature Smart Climate Solutions Fund, and Agriculture and Agri-Food Canada’s (AAFC) Agricultural Climate Solutions. NRCan is the lead department for the Horizontal Initiative Framework, supported by ECCC and AAFC.
Total federal funding allocated (from start to end date) (dollars)	$5,121,392,116^{Footnote 2}

Strategic Outcomes and Funding
Planning highlights	As lead department for the Natural Climate Solutions Fund (NCSF) Horizontal Initiative, Natural Resources Canada (NRCan) works with Environment and Climate Change Canada (ECCC) and Agriculture and Agri-Food Canada (AAFC) to coordinate implementation and reporting on the three NCSF programs: 2 Billion Trees, Nature Smart Climate Solutions Fund, and Agricultural Climate Solutions. Budget 2025 announced the wind down of the 2 Billion Trees program, which impacts the NCSF Horizontal Initiative. As a result, some reporting information (e.g., indicators, targets) will be adjusted to reflect this direction. Due to the time required to review impacts, these changes will be reflected in a future Departmental Results Report. Key planning highlights for 2026-27 include: NRCan will transition to maintaining and honouring existing agreements under the 2 Billion Trees program to continue planting incremental trees over the life of the program. Existing agreements will be honoured, contributing to Canada’s GHG emissions reduction target in 2030 and net-zero emissions reduction target in 2050. Other benefits to communities and the environment include the restoration of forests for wildlife and biodiversity, improved mental well-being, reduction in urban heat, and increased resilience to wildfires and flooding. The program will continue to execute existing multi-year tree planting projects with provinces and territories, for profit and non-profit organizations and Indigenous governments and organizations. ECCC’s Nature Smart Climate Solutions Fund will be pursuing the emission reductions program, including delivery through the Indigenous-led Natural Climate Solutions strategy. The Nature Smart Climate Solutions Fund will also continue to advance science projects aiming to improve the knowledge base on natural climate solutions in Canada. Through the Agricultural Climate Solutions program, AAFC has implemented a multi-stream program to develop and implement farming practices to tackle climate change. By co-developing, evaluating, and supporting the adoption of agricultural technologies and practices, the Agricultural Climate Solutions is focused on sequestering carbon, reducing greenhouse gas emissions and delivering environmental benefits on soil health, water quality and biodiversity. In 2026-27, the work of the nationwide network of 14 living labs under the Agricultural Climate Solutions – Living Labs stream, a collaborative approach with producers, partners, and scientists, will continue to co-design and test beneficial management practices on producers’ land in support of this program’s objectives. Note: 2026-27 marks the final year for 9 of 14 Living Labs. The Agricultural Climate Solutions On-Farm Climate Action Fund will continue to help producers adopt Beneficial Management Practices (BMPs) that increase their economic and environmental sustainability, including nitrogen management, cover cropping, rotational grazing, and selected merit-based BMPs.

Performance Information^{Footnote 3}

Name of horizontal initiative: Natural Climate Solutions Fund

Total federal funding allocated (dollars): $5,121,392,116

2026-27 Planned spending (dollars): $692,093,048

Horizontal Initiative Overview^{Footnote 4}
Horizontal initiative shared outcome(s)	Performance indicator(s)	Target(s)	Date to achieve target
Reduce GHG emissions in Canada through natural climate solutions	Annual GHG emission reductions through NCSF	Annually increasing emissions reductions, reaching 7-10 megatonnes (Mt) CO2e per year by 2030	March 31, 2031 (final results to be reported in 2032-33 Departmental Results Report)
	Projected long-term (2050) GHG emission reductions through NCSF	Projected emission reduction of 16-20 megatonnes (Mt) CO2e per year by 2050	March 31, 2031 (final results to be reported in 2032-33 Departmental Results Report)
Achieve environmental co-benefits through natural climate solutions	Cumulative total land area restored through NCSF	Annually increasing, with interim target TBD by March 31, 2026^{Footnote 5}; final target of 1.32 Mha restored	Interim target by March 31, 2026; final target by March 31, 2031
	Cumulative total land area under improved management through NCSF	Annually increasing, with interim target TBD by March 31, 2026; final target of 0.2-0.36 Mha under improved management
Achieve human well being co-benefits through natural climate solutions	Number of aggregate direct jobs created through NCSF	2285-2771 people directly employed each year	Annual, starting in 2024

Shared outcomes^{Footnote 6}

Horizontal initiative framework: departmental funding by theme (dollars)^{Footnote 7}
Natural Climate Solutions Fund (NCSF)	T1: 2 Billion Trees (2BT)	T2: Nature Smart Climate Solutions Fund (NSCSF)	T3: Agricultural Climate Solutions (ACS)	Internal Services
Shared outcome(s)	Reduce GHG emissions in Canada through planting 2 billion incremental trees while achieving environmental and human wellbeing co-benefits	Reduce GHG emissions in Canada by conserving, restoring and improving the management of ecosystems while achieving biodiversity and human wellbeing co-benefits	Reduce GHG emissions in Canada through climate smart ecosystems. Increase land area supporting reduced GHG emissions. Reduce greenhouse gas (GHG) emissions in the Canadian agriculture sector
Natural Resources Canada (NRCan)	$2,913,934,940			$10,099,426
Environment and Climate Change Canada (ECCC)		$1,361,092,147^{Footnote 8}		$27,074,434
Agriculture and Agri-Food Canada (AAFC)			$846,365,029	$21,569,903
Total	$2,913,934,940	$1,361,092,147^{Footnote 9}	$846,365,029	$58,743,763

Total Spending, All Themes
Theme	Total federal funding allocated (dollars)	2026-27 Total federal planned spending (dollars)
2 Billion Trees	$2,913,934,940	$361,164,732
Nature Smart Climate Solutions	$1,361,092,147^{Footnote 10}	$196,949,682
Agricultural Climate Solutions	ACS – Living Labs: $142,265,029 ACS – OFCAF: $704,100,000 TOTAL: $846,365,029	ACS – Living Labs: $24,499,680 ACS – OFCAF: $109,478,954 TOTAL: $133,978,634
Total	$5,121,392,116	$692,093,048

Theme 1 Details^{Footnote 11}

Name of theme: 2 Billion Trees

Theme outcome(s)	Theme performance indicator(s)	Theme target(s)	Date to achieve theme target
Reduce GHG emissions in Canada through planting 2 billion incremental trees	Cumulative total number of incremental trees planted	Annually increasing, reaching cumulative total of 2 billion trees	March 31, 2031
	Cumulative total area planted with incremental trees	Annually increasing, reaching cumulative total of 1.1 million hectares	March 31, 2031
	Annual GHG emission reductions	Annually increasing emission reductions, reaching up to 2 megatonnes (Mt) CO2e per year by 2030	March 31, 2031 (final results to be reported in 2032-33 Departmental Results Report)
	Projected long-term (2050) GHG emission reductions	Projected emission reduction of up to 11-12 megatonnes (Mt) CO2e per year by 2050	March 31, 2031 (final results to be reported in 2032-33 Departmental Results Report)
Achieve environmental co-benefits through tree planting	Cumulative total area planted that contributes to forest habitat restoration for species at risk and other species of interest	Annually increasing, reaching cumulative total of 70,000-90,000 hectares (target to be confirmed by March 31, 2026)	March 31, 2031
Achieve environmental co-benefits through tree planting	Cumulative total area planted that contributes to increased forest resilience to climate change	Annually increasing, with final target to be determined by March 31, 2026	March 31, 2031
Achieve human wellbeing co-benefits through tree planting	Number of aggregate direct, indirect and induced jobs created	3600-4300 people employed each year due to 2BT, starting in 2024	Annual, starting in 2024
	Percent of large (500+ FTEs) and medium (100-499 FTEs) organization funding recipients that have Diversity and Inclusion Plans	Annually increasing, with 100% of large and medium organization funding recipients having Diversity and Inclusion Plans by March 31, 2031	March 31, 2031
	Percent of under-represented groups in the tree planting and related activity workforce of large and medium organization funding recipients	Annually increasing; final targets of: 45% women, 9% immigrants, 6% visible minorities, 3% Indigenous women in tree planting and related activity workforce supported by 2BT	March 31, 2031

Theme 2 Details^{Footnote 12}

Name of theme: Nature Smart Climate Solutions Fund

Theme outcome(s)	Theme performance indicator(s)	Theme target(s)	Date to achieve theme target
Reduce GHG emissions in Canada through NSCSF	Annual GHG emission reductions (Mt)	Annually increasing emission reductions, reaching 5-7 megatonnes (Mt) CO2e per year	March 31, 2031 (results to be reported in 2032-33 Departmental Results Report)
Reduce GHG emissions in Canada through NSCSF	Projected long-term (2050) GHG emission reductions	Projected emission reduction of 5-7 megatonnes (Mt) CO2e per year by 2050	March 31, 2031 (results to be reported in 2032-33 Departmental Results Report)
Land area supporting reduced GHG emissions is increased	Cumulative total area restored	Annually increasing, reaching a cumulative total of 0.22 Mha of area restored	March 31, 2031
Land area supporting reduced GHG emissions is increased	Cumulative total area under improved management	Annually increasing, reaching cumulative total of 0.06-0.16 Mha of area under improved management	March 31, 2031
Achieve human wellbeing co-benefits through climate smart activities	Number of direct jobs	41 direct jobs in 2021, 55 in 2022, 10-year target of 1626-2717 jobs; 185-271 people directly employed each year due to NSCSF, starting in 2025 (to be confirmed by March 31, 2026)^{Footnote 13}	Annual, starting in 2023
Achieve human wellbeing co-benefits through climate smart activities	Percentage of under-represented groups in the climate smart and related activity workforce of funding recipients	Annually increasing; final targets of 28% immigrants, 30% visible minorities, 7.5% Indigenous peoples, with at least 1/4 of them Indigenous women, in climate smart and related activity workforce supported by NSCSF	March 31, 2031

Theme 3 Details^{Footnote 14}

Name of theme: Agricultural Climate Solutions

Theme outcome(s)	Theme performance indicator(s)	Theme target(s)	Date to achieve theme target^{Footnote 15}
Reduce GHG emissions in Canada through climate smart ecosystems	Annual GHG emission reductions in 2030 (Mt)	Annually increasing emission reductions, reaching 0.2-1.78 megatonnes (Mt) CO₂e per year	March 31, 2031 (results to be reported in 2032-33 Departmental Results Report)
	Projected long-term (2050) GHG emission reductions	Projected emission reduction of 0.2-1.78 megatonnes (Mt) CO₂e per year by 2050	March 31, 2031 (results to be reported in 2032-33 Departmental Results Report)
Land area supporting reduced GHG emissions is increased	Cumulative total area under improved management	Annually increasing, reaching cumulative total of 0.14-0.2 Mha under improved management	March 31, 2031

Evaluations
Fiscal year of planned completion of next evaluation	2026-2027, led by NRCan with support from ECCC and AAFC

Legacy Data
Date of last renewal of the horizontal initiative	Not applicable
Total federal funding allocated at the last renewal, and source of funding (dollars)	Not applicable
Additional federal funding received after the last renewal (dollars)	Not applicable
Total planned spending since the last renewal	Not applicable
Total actual spending since the last renewal	Not applicable

Footnotes

Footnote 1

AAFC’s On-Farm Climate Action Fund (OFCAF) stream is seven years (2021-22 to 2027-28). Funding allocated in Budget 2022 to expand ECCC’s Nature Smart Climate Solutions Fund is five years (2022-23 to 2026-27).

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Footnote 2

Total federal funding includes AAFC’s ACS-OFCAF program, which will be reported through the NCSF Horizontal Initiative, and additional funding allocated in Budget 2022 to expand ECCC’s Nature Smart Climate Solutions Fund.

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Footnote 3

Financial information represents the total federal funding allocated to the Horizontal Initiative for all applicable fiscal years and planned spending for the 2026-27 fiscal year. The financial information includes all funding related to that outcome, new and existing.

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Footnote 4

This information is currently under review and will be updated where required in a future Departmental Results Report, in line with the 2025 Budget announcement.

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Footnote 5

The deadline for finalizing the remaining targets for horizontal and program indicators was moved to March 31, 2026 to ensure alignment with program implementation. This footnote applies to all instances where the deadline to develop missing interim and final targets was changed from March 31, 2025 to March 31, 2026.

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Footnote 6

This information is currently under review and will be updated where required in a future Departmental Results Report, in line with the 2025 Budget announcement.

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Footnote 7

Financial information presented under each theme represents the total federal funding allocated to each theme for all applicable fiscal years. The financial information includes all funding related to that theme, new and existing.

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Footnote 8

The NSCSF total federal funding allocated to date was reduced due to a contribution transfer of $50M to the Northwest Territories Project Finance for Permanence.

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Footnote 9

The NSCSF total federal funding allocated to date was reduced due to a contribution transfer of $50M to the Northwest Territories Project Finance for Permanence.

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Footnote 10

The NSCSF total federal funding allocated to date was reduced due to a contribution transfer of $50M to the Northwest Territories Project Finance for Permanence.

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Footnote 11

This information is currently under review and will be updated where required in a future Departmental Results Report, in line with the 2025 Budget announcement.

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Footnote 12

This information is currently under review and will be updated where required in a future Departmental Results Report, in line with the 2025 Budget announcement.

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Footnote 13

Confirmation of target is delayed to 2026 as additional project reporting is required to inform development of an accurate projection.

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Footnote 14

This information will be updated where required in line with the 2025 Budget announcement.

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Footnote 15

Because the requirement to begin reporting on each indicator varies, not all indicators will have results each year.

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Horizontal Initiative - Natural Climate Solutions Fund