Mark Carney will maintain oil and gas emissions cap, environment minister says

Minister of Environment and Climate Change Terry Duguid, right, embraces Steven Guilbeault, minister of Canadian Culture and Identity, after being sworn in at a cabinet ceremony at Rideau Hall in Ottawa on March 14, 2025. THE CANADIAN PRESS/Justin Tang

A Mark Carney government will maintain the cap on emissions from the production of oil and gas, Environment Minister Terry Duguid said in a recent interview.

Under former prime minister Justin Trudeau, the Liberals promised in the 2021 election to cap emissions from oil and gas and began the process to regulate the cap a year later.

In November, they introduced draft regulations — two years behind schedule — that require producers to cut emissions by about one-third over the next eight years, and said that the regulations did not place a cap on production.

The federal government also proposed a cap-and-trade system where each company would be given an emissions allowance equating to one unit per tonne of carbon pollution. Companies that pollute less would be able to sell their leftover allowance units for profit, while companies that don’t reduce their emissions enough would have to buy allowance units from other companies to stay in compliance.

“We want that energy. What we don’t want is that pollution,” Duguid said in an interview with The Canadian Press.

The Liberals have said repeatedly they aren’t capping production, just the emissions that come from it - a bid to force companies to invest in technology to produce the fuels more cleanly. But industry leaders and conservative politicians insist the targets are too stringent and can’t be met without capping production.

Alberta Premier Danielle Smith has heavily criticized the emissions cap regulations, saying it sets “unrealistic targets” and vowing to challenge the regulations in court.

Conservative Leader Pierre Poilievre has promised to scrap the emissions cap if elected, and criticized Carney’s stance on the topic in a social media post last week.

The Canadian Association of Petroleum Producers — which represents companies responsible for three-quarters of Canada’s annual oil and natural gas production — said the proposed changes would deter investment and undermine employment in the sector.

This week, a group of top energy executives called on the leaders of the four main federal political parties to declare a Canadian energy crisis and scrap the emissions cap.

Upstream oil and gas operations, including production and refining, accounted for about 31 per cent of Canada’s total emissions in 2022.

The regulations would compel upstream oil and gas operations to reduce emissions to 35 per cent below where they were in 2019 by some point between 2030 and 2032.

Emissions from the sector fell four per cent between 2019 and 2022 — the most recent year for which statistics are available — with similar levels of production.

In announcing the draft regulations, then-environment minister Steven Guilbeault said government modelling suggested half of the cuts would come from reductions to methane — cuts that are underway already as oil producers install equipment to prevent methane leaks, a major source of emissions.

This report by The Canadian Press was first published March 20, 2025.

This is a corrected story. A previous version referred to caps on production.