Prime Minister Mark Carney intends to maintain his predecessor’s cap on oil and gas production. The cap was introduced with regulations drafted by the Liberals last November, which require producers to reduce their emissions by about one-third.
Critics of the cap argue that it will kill Canada’s energy sector and contribute to a decline in Canada’s GDP. Newly appointed Environment Minister Terry Duguid confirmed Carney’s plans to keep former prime minister Justin Trudeau’s policy in an interview with The Canadian Press on Thursday.
The Liberals’ cap forces energy producers to cut their emission levels by about one-third over the next eight years.
A report published by the Parliamentary Budget Officer last week estimates that the required reduction in energy production levels will lower Canada’s real gross domestic production by “0.39 per cent in 2032 and reduce nominal GDP by $20.5 billion.”
The report also projects massive job losses across the economy of some 54,400 Canadians by 2032.
Additionally, the Carney government is proposing a cap-and-trade system, something that Alberta Premier Danielle Smith and members of the energy sector have been outspoken critics of.
Conservative Leader Pierre Poilievre has vowed to eliminate the emissions cap, pledging that under his “Canada First” government, Canada would be able to tap into its vast natural resources.
He ensured that under his leadership, regulatory delays would no longer encumber projects like mines, pipelines, and LNG terminals.
News that Carney will maintain the emissions cap comes on the heels of some of Canada’s top energy executives penning an open letter to the federal government and opposition party leaders, urging them to declare a “Canadian energy crisis.”
The group is calling for an overhaul of regulations to ensure major infrastructure projects receive approval within six months of filing an application.
In the letter addressed to leaders of the top federal political parties, the CEOs of Canada’s largest petroleum and pipeline companies outlined their demands to accelerate energy development.
These demands include scrapping the planned emissions cap, repealing the carbon levy on major industrial emitters, and lifting regulatory barriers that have slowed the sector.
“By declaring a Canadian energy crisis and key projects in the ‘national interest,’ the federal government will be able to use all its available emergency powers to ensure that the dramatic regulatory restructuring required to expand the oil and natural gas sector is rapidly achieved,” reads the letter.
The energy leaders said that Canada is at a turning point in its history. As public support grows for the energy sector and its infrastructure, the group said Canada can defend its sovereignty and become a key player in determining the world’s future.
The Liberals and various provincial leaders have recently emphasized a more pro-energy approach amid U.S. President Donald Trump’s tariff threats.
Fourteen heads of Canada’s largest energy companies, including Cenovus, Suncor, Enbridge, and TC Energy, signed the letter addressed to Mark Carney, Yves-François Blanchet, Pierre Poilievre, and Jagmeet Singh.