What has changed in Canada’s Climate Competitiveness Strategy?
Potential removal of the oil-and-gas emissions cap
One of the most significant changes in Budget 2025 was a signal that the federal government may eliminate the oil and gas emissions cap proposed under the previous government. That cap would have required oil and gas emissions to be at 27% below 2026 levels (or 35% below 2019) using a cap-and-trade system.
Following the release of Budget 2025, the federal government and the Province of Alberta announced the signing of an MOU on November 27th, which includes a commitment that the federal government won’t implement a federal oil and gas emissions cap. Instead, the MOU commits the two parties to working collaboratively to raise the minimum effective credit price in Alberta’s TIER carbon credit system to $130 a tonne. The federal government and Alberta have committed to concluding an agreement on industrial carbon pricing on or before April 1, 2026.
In addition, the federal government has committed to working with provincial and territorial governments in setting a carbon price trajectory to a net-zero target by 2050.
Amendments to Bill C-59 : Changes to Greenwashing Provisions
Included in the broader climate competitiveness strategy were amendments to Bill C-59 that significantly impact the Competition Act’s greenwashing provisions. These changes aim to reduce compliance burdens and remove barriers to business investment. Key amendments include:
- Removing the requirement that businesses substantiate environmental benefit claims using internationally recognized methodology standards.
- Eliminating the ability for third parties to bring greenwashing complaints directly to the Competition Tribunal.
These changes respond to criticism the previous government received that the “greenwashing” provisions were discouraging environmental initiatives.
Assuming Budget 2025 Implementation Act (Bill C-15) passes without amendments, the provisions are expected to receive Royal Assent and come into force early 2026.
Clean Economy Tax Credits
Budget 2025 expands clean economy tax credits to boost electricity grid investment and support digital infrastructure. Below is a table showing how Canada’s clean economy tax credits have changed:
