Canada’s energy industry is emerging as one of the winners from the federal government’s latest budget, which projects a $78.3-billion deficit in 2025–26 but also commits to $280 billion in new investments over the next five years.A large share of that funding will go toward infrastructure, competitiveness, and clean energy growth, providing a significant boost to resource-heavy provinces such as Alberta. However, there was no mention on updates regarding major pipeline projects such as the Trans Mountain Expansion, Coastal GasLink, or Keystone XL in the budget. In a major policy shift, the government has scrapped the controversial industrial emissions cap and extended its net-zero target to 2050, giving the energy sector greater flexibility and long-term certainty as it moves toward lower emissions and away from original goal to reduce emissions to 40% below 2005 levels by 2030, a policy left over from the Trudeau government. “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 only marginal value in reducing emissions,” the budget states..The first major nation-building projects were first announced in Sept. 2025, which include LNG Canada Phase 2 in Kitimat, BC and the Red Chris Mine expansion, among others. The budget now states there are several other projects that could be "transformative" for Canada, these include the Alto High-Speed Rail, Port of Churchill Plus, Wind West Atlantic Energy, and the Arctic Economic and Security Corridor. Pathways Plus, is the only Alberta-based project, which is a carbon capture and storage network and pipeline project that will "substantially reduce emissions with additional energy infrastructure that will support a strong conventional energy sector while driving down emissions from the oil sands." The Liberals plan to spend $2 billion over five years to create a Critical Minerals Sovereign Fund.This is set to make strategic investments in critical minerals projects and companies, including equity investments and loan guarantees."The fund will make strategic investments in critical minerals projects and companies, including equity investments, loan guarantees, and offtake agreements," the budget reads.It also proposes to provide $50 million over five years, starting in 2026-27, to Natural Resources Canada "to support the delivery of this fund."The Mining Association of Canada (MAC) applauded the federal budget in an official statement, saying it "contains many measures that will enhance the competitiveness of Canadian mining and accelerate investments in critical minerals.".CTF urges Carney to cut spending and debt in 2025 budget ."Budget 2025 confirms the federal government's unwavering commitment to the Critical Minerals Strategy released three years ago," stated Pierre Gratton, MAC's CEO."These measures, taken together, send a powerful signal to the mining industry, global investors and Canada's allies that Canada is very serious about improving the competitiveness of Canada's mining industry. Today's budget promises to usher in a new era in mining investment, creating high paying jobs, boosting exports, creating major opportunities for indigenous Canadians and protecting Canadian sovereignty for years to come. We urge the government to implement these proposals expeditiously."The budget also outlines the government’s highly anticipated “Climate Competitiveness Strategy,” which has been framed as being more focused on “results” and not “objectives.”The government plans to maximize “carbon value for money” and will prioritize measures they see as having the most impact on emissions reductions at the lowest cost to Canadian taxpayers.The budget is also going to deliver an allotment of generous tax incentives that directly benefit energy producers and developers..These will include a clean electricity investment tax credit to support expansion of low-emission power generation, an extension of full credit rates for the carbon capture, utilization, and storage (CCUS) investment tax credit, and an expanded list of critical minerals eligible for the clean technology manufacturing investment tax credit.The government's plan of removing the 2026 target from the Electric Vehicle Availability Standard and launching a 60-day review of the overall regulation is also reiterated in the budget.Following this review, the government plans to announce next steps on electric vehicles in the coming weeks.
