Canada’s federal government is in discussions with Alberta and the country’s energy sector over the possibility of withdrawing a proposed cap on emissions from oil and gas production, if industry and provincial leaders agree to other climate commitments, according to sources cited by Reuters.The emissions cap, introduced under former Prime Minister Justin Trudeau, has not yet been enshrined in law. Trudeau’s government published draft regulations in late 2023, with the cap scheduled to take effect in 2030. The measure was designed to ensure Canada’s largest emitting sector made measurable progress toward the country’s climate targets..Oil and gas companies, however, have criticized the plan, arguing it would effectively force production cuts and undermine investment. Alberta, which produces the majority of Canada’s oil, has also opposed the policy.Prime Minister Mark Carney campaigned on maintaining the cap but has since faced criticism for softening the government’s environmental stance. His administration has emphasized protecting the economy from U.S. tariffs, a shift from the previous Liberal government’s stronger focus on climate action.According to Reuters sources, talks are underway that could see the cap scrapped as part of a new “climate competitiveness strategy,” expected to be unveiled later this year..Any such move would be contingent on Alberta and the energy industry making firm, verifiable commitments to reduce emissions. These could include advancing projects such as the Pathways Alliance carbon capture and storage initiative, alongside other large-scale environmental measures.The government has signaled that it is less concerned with the specific tools used to cut emissions than with achieving measurable results. This approach could give the oil sector and provincial governments greater flexibility in meeting climate objectives, while allowing Ottawa to position itself as both an economic and environmental steward.The Prime Minister’s Office referred Reuters’ request for comment to the federal environment department, which has not yet issued a statement. Natural Resources Minister Tim Hodgson acknowledged ongoing discussions but did not provide details, saying only that the government’s focus is on ensuring Canada can deliver both clean and conventional energy responsibly..If finalized, the policy shift could mark a significant turning point in Canada’s climate strategy. Scrapping the cap may ease tensions with Alberta and oil producers, but it risks alienating environmental advocates who argue that binding regulations are essential to meeting national and international climate commitments.The negotiations highlight the broader challenge Canada faces in balancing its role as one of the world’s largest oil producers with its climate obligations. The outcome will likely play a key role in shaping the country’s energy and environmental policy in the years ahead.
