Canada's GHG Disclosure Standard: What It Means for Businesses and Their Suppliers

Canada's federal government is one of the largest buyers in the country, and it is using that buying power to move the market on emissions. Its Standard on the Disclosure of Greenhouse Gas Emissions and the Setting of Reduction Targets, usually shortened to the GHG Disclosure Standard, ties eligibility for large government contracts to measuring emissions and committing to net zero. 

Most of the effect lands on major suppliers, but the requirements reach further down the supply chain than many businesses expect, and a change taking effect on 1 January 2027 widens that reach again. Here is what the Standard is, who it affects, the detail of the 2027 change, and why carbon data sits at the centre of it. 

‍What is Canada's GHG Disclosure Standard?

The GHG Disclosure Standard is a federal procurement standard issued by the Treasury Board of Canada Secretariat under the Policy on Green Procurement, as part of the wider Greening Government Strategy. It came into force on 1 April 2023.

It helps to be clear on one point early: this is a procurement standard, not a blanket law. It does not place a direct legal duty on every business in Canada. Instead, it works through the contracts the government awards. For any federal procurement valued over CA$25 million (including applicable taxes, fees, and options), the buying process must prompt suppliers to do two things: measure and disclose their greenhouse gas emissions, and adopt a science-based target to reduce those emissions to net zero by 2050, in line with the Paris Agreement.

In practice, departments build this into the instructions and evaluation criteria for a tender. Below the $25 million threshold, the Standard is not mandatory, though participation is encouraged. A handful of procurement types are exempt, including agreements between governments, Foreign Military Sales, and contracts using emergency authorities. The Standard sits alongside a companion measure, the Standard on Embodied Carbon in Construction, which applies similar thinking to materials such as concrete and steel on major federal building projects.

How do federal suppliers comply? The Net-Zero Challenge explained

The Standard does not prescribe a single methodology. The main route to meet it is the Net-Zero Challenge, a voluntary federal programme launched in 2022, or an equivalent initiative or standard accepted by the contracting authority. Evidence of participation in recognised schemes such as the Science Based Targets initiative can be put forward and assessed on a case-by-case basis.

To meet the Net-Zero Challenge minimum requirements, a participant must:

• Make a public commitment to net zero by 2050 or earlier.
• Build a base year emissions inventory covering Scopes 1 and 2 in absolute terms. Every participant must include Scopes 1 and 2. The requirement for Scope 3, the value chain emissions that sit with a company's suppliers, depends on the type of business:
  
  • Financial institutions must include Scope 3 Category 15 (emissions from their investments), plus lending portfolio emissions where applicable.
  • All other larger businesses must include at least their single most relevant Scope 3 category.
  • SMEs and large industrial emitters are encouraged, but not required, to include Scope 3. The one exception is businesses with no Scope 1 or 2 emissions, which must report at least one Scope 3 category.
• Set interim reduction targets.
• Submit a preliminary plan within 12 months of joining, and a comprehensive plan within 24 months. The comprehensive plan is built around a published first interim target, mitigation strategies, and offset-credit reporting, with scenario analysis feeding into the mitigation strategy work, and climate-related financial disclosures encouraged but not required.

Including more Scope 3 than the minimum is also one of the routes to a higher participation tier, which is where supplier data starts to matter, as we come to below.

What is changing in the Net-Zero Challenge in January 2027?

In October 2025 the Net-Zero Challenge published version 2.0 of its Technical Guide, which introduced a new participation tier system. The tiers recognise how ambitious a participant's net-zero plan is. The new system has three levels, Bronze, Silver, and Gold, simplified from the previous five.

The system is being phased in:

• Through 2025 and 2026, existing participants can choose to stay on the previous tier system or move to the new one.
• Any business joining during this window is assessed under the new system from the outset.
• From 1 January 2027, the new tier system applies to every participant. There is no opt-out.

The tiers ask for progressively deeper reductions and tighter rules on the use of offsets. The main difference between a smaller and a larger business is how Scope 3, the value chain emissions that sit with a company's suppliers, is treated. The table below sets out the main route for each. Financial institutions and heavy industry follow their own variations, left out here to keep the picture clear.

Tiers are assigned only after the comprehensive plan is assessed, and are re-evaluated each year, with each participant's status published on the Net-Zero Challenge website. Two themes run through the upper tiers: deeper, more credible reductions rather than reliance on offsets, and broader treatment of Scope 3, the value chain emissions that sit with a company's suppliers. The practical takeaway is that from January 2027, every participant is held to the same, clearer ambition framework, and the route to recognition increasingly runs through supplier data.

Key timelines for the GHG Disclosure Standard and Net-Zero Challenge

1 April 2023: The GHG Disclosure Standard came into force for federal procurements over CA$25 million.

October 2025: Version 2.0 of the Net-Zero Challenge Technical Guide introduced the new Bronze, Silver, and Gold tier system.

2025 and 2026: Transition period. Existing participants choose the old or new tier system; new joiners use the new one.

1 January 2027: The new tier system applies to all participants, with no opt-out.

‍Who does the GHG Disclosure Standard directly affect?

The businesses directly in scope are suppliers and bidders on federal procurements over CA$25 million, whether they provide goods, services, or construction. In practice these tend to be larger prime contractors and major suppliers. For them, measuring emissions and setting a credible net-zero target is becoming part of staying eligible and competitive for significant government work.

This includes businesses based outside Canada. A UK, US, or EU company bidding on a qualifying Canadian federal contract is treated the same way as a domestic one, so the Standard is worth understanding well beyond Canada's borders.

How the GHG Disclosure Standard affects the supply chain

This is where smaller and mid-market businesses come in, including those that will never bid for a government contract themselves.

A prime contractor's Scope 3 emissions are made up of its suppliers' emissions. As prime contractors work to disclose their own footprint and strengthen their Net-Zero Challenge position, they increasingly need emissions data from the businesses in their supply chain. The exact requirements for subcontractors depend on the procurement and the instructions a contracting officer sets, but the direction of travel is consistent: the data request flows downstream.

The January 2027 change sharpens this. Once every participant is on the new tier system, and Silver and Gold reward reductions in meaningful Scope 3 categories, prime contractors have a clear incentive to gather supplier-level data rather than estimate it. A business supplying a Canadian primary contractor, wherever it is based, may find that providing emissions data becomes a condition of the relationship.

‍How Seedling can help 

Every part of the Standard runs on emissions data. You cannot disclose a footprint you have not measured, and you cannot set a credible target without a baseline. For the businesses caught up in it, directly or indirectly, the question is not whether to measure emissions but how well, and that is where Seedling comes in.

Seedling combines carbon accounting software with one-to-one support from a dedicated expert, so you can produce the disclosure and the target the Standard asks for without needing a carbon specialist in-house. Here is how that maps to what the Net-Zero Challenge and its equivalents require:

• A full-scope, GHG Protocol-aligned footprint. We measure Scopes 1, 2, and 3, assured by our team, in the format recognised schemes expect. That covers the base year inventory at the heart of any disclosure.
• Accurate data that reflects real change. We don't rely on spend-based estimates alone. We help you collect activity data, drawn from energy use, mileage, materials, and supplier figures. Spend data tracks what you pay, not what you emit, so it struggles to show reductions over time. Activity data reflects genuine progress and stands up when a buyer reviews it.
• Supplier data, collected for you. If you need Scope 3 from your own suppliers, our supplier engagement tool sends a simple data request and pulls the responses straight into your footprint, with no copying between tools or converting revenue-based figures.
• Science-based targets and a plan to reach them. Our target-setting tool helps you set an SBTi-aligned Net Zero target and the interim targets the Challenge requires, with hotspot analysis behind a credible reduction plan.
• One footprint, many frameworks. A single, well-built footprint can serve the Net-Zero Challenge, an SBTi target, a CSRD or SECR disclosure, an EcoVadis submission, or a client RFP, without starting from scratch each time. Measure once, report everywhere.

For SMEs and mid-market suppliers, this is where carbon data shifts from cost to advantage. Scope 3 typically accounts for over 90% of a company's total emissions, so large buyers cannot complete their own picture without reliable figures from their suppliers. The business that can hand over robust, assured data makes the buyer's reporting easier and becomes the lower-friction choice when contracts come up for review.

More than 500 businesses already trust Seedling to measure and reduce their emissions, with over 500,000 tonnes of CO2e measured on the platform. If the GHG Disclosure Standard, or a buyer asking for your emissions data, has put carbon reporting on your agenda, we can help you get it right. 

FAQs

Is the GHG Disclosure Standard a law?

‍No. It is a procurement standard under Canada's Policy on Green Procurement. It does not place a statutory duty on every business. It works through the conditions attached to federal contracts over CA$25 million.

Does the GHG Disclosure Standard apply to my business if I'm based outside Canada?

‍Directly, only if you bid on a qualifying Canadian federal procurement. Indirectly, it can reach you if you supply a business that does, since that company may need your emissions data for its own Scope 3 reporting.

Do I have to use the Net-Zero Challenge specifically?‍

No. The Net-Zero Challenge is the main route, but an equivalent initiative or standard can be accepted. Evidence from schemes such as the Science Based Targets initiative may be considered on a case-by-case basis.

What is the GHG Disclosure Standard contract value threshold?‍

CA$25 million, including applicable taxes, fees, and options. Below that, the Standard is encouraged but not mandatory.

What exactly changes for the GHG Disclosure Standard on 1 January 2027?‍

All Net-Zero Challenge participants move onto the new Bronze, Silver, and Gold tier system, with no option to remain on the old one. The Silver and Gold tiers reward deeper reductions and broader Scope 3 coverage, which gives prime contractors more reason to collect data from their suppliers.

Where can I read the GHG Disclosure Standard official details?‍

The Treasury Board Standard and the Net-Zero Challenge Technical Guide are the primary sources.

‍