The Canadian federal government is indicating a potential end to the oil and gas emissions cap, but with specific conditions attached. The recent budget did not explicitly state that the emissions cap, a controversial policy from the previous Trudeau administration, is being eliminated. Instead, it outlined requirements that would make the cap unnecessary. The budget emphasized that effective carbon pricing, improved methane regulations, and large-scale deployment of carbon capture and storage could create a scenario where the emissions cap would have limited value in reducing emissions. This conclusion was presented in the "Canada’s Climate Competitiveness Strategy," introduced in the 2025 budget. Tuesday marked one year since the Trudeau government announced plans to publish draft regulations for the emissions cap, which were never finalized. The new strategy indicates that Prime Minister Mark Carney's Liberal government will continue some of the previous administration's climate policies, including regulations for clean electricity and methane, as well as clean fuel regulations. However, the budget did not confirm the continuation of Canada's 2035 electric vehicle sales mandate, stating that further announcements would be made in the coming weeks. The strategy places a strong emphasis on industrial carbon pricing, with provinces like Ontario, Saskatchewan, and Alberta having systems that meet federal benchmarks. The government aims to raise the carbon price in these systems to $170 per tonne by 2030 and is seeking a national agreement on a trajectory for net-zero emissions by 2050. The strategy also focuses on encouraging investment in emissions reduction rather than imposing prohibitions. It highlights the need for increased investment to build new battery storage and expand wind and solar energy, as well as interprovincial connections for low-carbon electricity. To facilitate this investment, the previous Liberal government introduced various investment tax credits in 2021, although not all have been implemented. The budget proposes to advance the clean electricity investment tax credit through legislation and adjust existing clean economy tax credits to maintain competitiveness in the growing global clean technology market. Additionally, the government plans to update its "greenwashing legislation" to address false environmental claims, aiming to reduce investment uncertainty. The budget also includes provisions to enhance the competitiveness of low-carbon liquefied natural gas (LNG) facilities. Proposed changes would allow tax write-offs for manufacturing and processing expenses incurred before 2030 and reinstate accelerated capital cost allowances for LNG equipment. Furthermore, the government is proposing a $40 million investment over two years, starting in 2026-27, to establish a Youth Climate Corps. This initiative aims to train young Canadians to respond effectively to climate emergencies. Overall, while the government signals a shift away from the oil and gas emissions cap, it emphasizes a strategy focused on investment and regulatory clarity to meet climate goals.