The new federal Budget 2025 is being hailed as indicating “a change of tone” on natural-resource issues.
All in all, says Heather Exner-Pirot of the Macdonald-Laurier Institute, the budget shows signs of a better mix of “carrot and stick” than did the Justin Trudeau government. “The last budget was still in the ‘stick’ era. Finally, we’re in a ‘carrot’ era.”
Among the carrots, the budget speech on Nov. 4 made some promises that sound positive about LNG and other natural resources, as Ottawa spoke of making Canada a “clean-energy superpower.”
For example, the budget reinstates the accelerated investment incentive, which provides an enhanced first-year write-off for most capital investments. And it promises to bring back the accelerated capital-cost allowances (CCA), a tax incentive that had expired at the end of 2024, for LNG equipment and buildings.
The CCA incentive will apply only to future “low-carbon” LNG facilities: LNG facilities in the top 25% of emissions performance will be eligible for CCAs of 30% for equipment and 10% for non-residential buildings. Facilities in the top 10% of emissions performance will be entitled to CCAs of 50% and 10% for the same items.
This measure will apply only to property acquired on or after Nov. 4, 2025, and before 2035. The budget did not provide details on what those emissions requirements would be, but promised details down the road.
Prime Minister Mark Carney’s first budget promises business-tax measures to help jumpstart investment in the Canadian economy. It targets $500 billion in new private-sector investments over the next five years. The budget also proposes millions in backing for businesses working to develop new export markets.
The budget says these and other measures are aimed at making Canada more competitive with the US, in response to US President Donald Trump’s barrage of tariffs on Canada and its products.
In September, the prime minister listed five major projects that would be eligible for fast-track approvals as part of a campaign to diversify the economy and reduce our old reliance on the US: “We used to build big things in this country, and we used to build them quickly. It’s time to get back at it and get on with it.”
Among the five major projects was the plan, now under active consideration by the LNG Canada partners, to double production of LNG at their plant at Kitimat.
And now Carney has added seven more projects to the Major Projects Office (MPO) list of ventures to be accelerated. The seven new projects include the Nisga’a Nation’s Ksi Lisims LNG project in BC (and its PRGT pipeline), BC Hydro’s North Coast Transmission Line (NCTL) and the related “Northwest Critical Conservation Corridor,” plus mining projects in Ontario, Quebec and New Brunswick, and an Inuit-owned hydro project near Iqaluit in Nunavut.
In all, a federal news release said, Carney’s announcements “represent more than $56 billion in new investment.” That’s in addition to “$60 billion for in investments in nuclear power, LNG, critical minerals, and new trade corridors” that were announced in September.
Carney spoke of Ottawa putting up “huge financing” but, again, gave no further information. As he listed the additions to the MPO project list, though, the Canada Infrastructure Bank announced a $139.5-million loan to BC Hydro to support “the early works phase” of the NCTL power line.
PM Carney: “Referring to the MPO, or the Major Projects Office, does not mean the project is approved. It means that all the efforts are being put in place from the federal government in order to create the conditions so it could move forward. But those decisions are taken by many parties, including, very much, First Nations.”
The prime minister’s announcement was the first since the appointment of an Indigenous advisory council that is to help the MPO integrate the the United Nations Declaration on the Rights of Indigenous Peoples, UNDRIP, into its decision-making.
The prime minister said Ksi Lisims LNG will add $4 billion a year to the nation’s economy.And he added that the “huge financing” he promised is aimed at encouraging Indigenous equity ownership of resource projects.
Eva Clayton, Nisga’a president, said: “We’re showing BC, Canada, and the world what Indigenous economic independence and shared prosperity can look like.” She spoke of “meaningful opportunities” for the Nisga’a — and for all Nations and communities in northern BC.
The Nisga’a Nation, a partner in Ksi Lisims LNG and its PRGT pipeline, says it is working with Indigenous communities to strike agreements, including equity stakes in the pipeline. A final investment decision on Ksi Lisims is expected early next year.
Back to the budget: Carney;’s Budget 2025 also speaks of a plan to strengthen industrial carbon-pricing, finalize methane regulations, and extend tax credits on carbon capture. And Ottawa says all this could mean its long-proposed emissions cap on the oil and gas sector could be shelved.
Carney’s fiscal plan proposes making Canada a “clean energy superpower” by supporting development of low-emission energy projects such as nuclear reactors and low-carbon LNG.
At the same time, the government is pushing for the development of carbon capture and storage technologies, as well as enhanced methane regulations. It is also affirming its commitment to the industrial carbon tax, calling it a policy “that delivers more emissions reductions than any other”.
Ottawa still says that “to compete internationally, Canada will need to reduce its carbon intensity to meet the growing demand for global markets for products with low associated greenhouse gas emissions.”
But the budget said this: “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 marginal value in reducing emissions.”
The previous Trudeau Liberal government said that its emissions cap (designed to force the sector to cut emissions by 35% below 2019 levels by 2030) was essential to help Canada meet its climate targets. Now the Carney government says Canada can get to net-zero through other means.
The current finance minister, François-Philippe Champagne, said there are a number of steps still to come, but he did not give details. “When conditions are met, we won’t need the cap anymore. But the conditions will have to be met.”
The industry had condemned the cap as a cap on production. Alberta Premier Danielle Smith, for one, had long blasted the draft regulations: “The evidence is clear: the federal government’s proposed emissions cap is unconstitutional, bad for the economy and bad for Canadians.”
She now says her office is in “sensitive negotiations” with Ottawa and hopes to have a completed memorandum of understanding by mid-November.
And disappearance of the cap would be welcome news to Dale Swampy, president of the National Coalition of Chiefs, who had said “many Indigenous people would particularly suffer” under the cap, and “Indigenous reconciliation, something the Liberal government supposedly cares deeply about, will become even harder to achieve.”
While speaking of shelving the cap, Ottawa will maintain the clean-fuel regulations to bring about less carbon-intensive gasoline and diesel, although the policy will be amended to reduce reliance on foreign fuels.
The Liberal government also spoke on Budget Day of plans to back off on “greenwashing” regulations that require fossil-fuel companies to prove any environmental claims. But what change is planned is not yet clear.
Currently, oil and gas companies need to substantiate environmental claims with internationally recognized metrics. From now on, fraudulent declarations will still be illegal, but the threshold for a company to prove its claims will be lowered.
The new rules would also no longer allow third parties to raise complaints about “greenwashing” to the Competition Tribunal.
In the budget, the government said the current greenwashing rules had created “investment uncertainty,” producing the opposite of the intended effect by slowing the private sector’s efforts to invest in the environment.
Instead, the federal government is hoping to boost investment in the clean-technology sectors by expanding pre-investment tax credits for green manufacturing, as well as carbon capture and storage (CCUS).
We leave you with Finance Minister François-Philippe Champagne’s budget speech: “We will explore new markets and sell more of the best of what Canada has to offer.” And with his budget documents.
To close, this from CEO François Poirier of TC Energy: “The policy environment is becoming increasingly supportive.”
From Heather Exner-Pirot: “At least under this government, the bad things have stopped happening. And I would say, even with this budget, some of the bad things are actually going away.”
And from Nelson Bennett of Resource Works: Federal budget: It’s not easy being green — Canada’s climate rethink signals shift from green idealism to pragmatic prosperity: https://ow.ly/GBBc50Xs1wf
Front row right: Finance Minister François-Philippe Champagne and Prime Minister Mark Carney on Budget Day
(Published here 13 November 2025, and updated 14 November 2025)
