Canada released a Climate Competitiveness Strategy that removes the proposed oil and gas emissions cap, begins a reset of the electric vehicle mandate, pares back new greenwashing provisions, revives accelerated writeoffs for LNG equipment, and cuts the marginal effective tax rate by more than two percentage points, which the government says will be the lowest in the G7.
Budget text says the emissions cap is no longer needed given other tools. The document states that “effective carbon markets, enhanced oil and gas methane regulations, and the deployment at scale of technologies such as carbon capture and storage would create the circumstances whereby the oil and gas emissions cap would no longer be required as it would have marginal value in reducing emissions.”
On the EV mandate, Ottawa already removed the 2026 target from the Electric Vehicle Availability Standard and conducted a 60 day review of the regulation. The government says it will announce next steps “in the coming weeks.”
The government also acknowledges that recent Competition Act changes created “investment uncertainty.” Budget 2025 will propose amendments to remove some elements of the new “greenwashing” provisions while keeping protections against false claims. The intent is to increase certainty while deterring misleading advertising.
Ottawa will reinstate accelerated capital cost allowances for LNG equipment and related buildings that expired at the end of 2024. It will also provide immediate expensing for manufacturing and processing buildings and accelerated CCA for low-carbon LNG facilities.
The “productivity super-deduction” measures reduce Canada’s marginal effective tax rate by more than two points. The government claims Canada will have the lowest METR in the G7 and below the OECD average.
On industrial carbon pricing changes, Ottawa will consult provinces and territories on a post-2030 carbon-price path that targets net zero by 2050. It will tighten the benchmark so all provincial systems provide a strong common signal and apply the federal backstop whenever a provincial system falls short.
The Canada Growth Fund will also continue issuing carbon contracts for difference to give investors price certainty on long-duration projects.
The government also committed to cooperation agreements under the Impact Assessment Act with every interested province and territory within six months, following the push of single assessment for all projects. Ottawa says the new authorities in sections 16 and 31 allow substitution to a single harmonized process, early assessment decisions, and where a provincial process meets both federal and provincial requirements, full substitution.
On Ottawa’s nation-building map of major projects, it featured previously announced projects which include LNG Canada Phase 2 in Kitimat, the Red Chris Mine expansion in northwest British Columbia, the McIlvenna Bay copper project in east-central Saskatchewan, the Darlington new nuclear project in Bowmanville, the Contrecoeur container terminal in Québec, and the Alto high-speed rail along the Ontario-Québec corridor. But new additions were also made, including Pathways Plus, Port of Churchill Plus in Manitoba, Wind West Atlantic Energy, and the Arctic Economic and Security Corridor.
The government notes several additions to the Major Projects Office list are at an early stage and require further development.
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One Response
Hurray for the end to the Oil and Gas Cap and the rewrite of the EV Mandate. These were delusional Trudeau Liberal policies which were handicapping the Canadian economy and contributing effectively nothing to solving the globe’s CO2 issues.