OTTAWA – The federal government is in discussions with Alberta and the oil industry about the future of the sector’s emissions cap, Energy Minister Tim Hodgson said Friday.
At a news conference in Winnipeg, Hodgson said both the province and industry agree with the federal government that there needs to be a “fundamental change in the emissions intensity of the oilsands.”
“We are in the middle of discussions around how we get to the results,” he said, calling the talks “productive.”
Hodgson did not offer details, saying he will “not negotiate through the media.” He also didn’t say whether the federal government plans to cut the emissions cap.
After Prime Minister Mark Carney met with Alberta Premier Danielle Smith on Wednesday, Smith called the meeting “exceptionally productive.”
“Although we still have some details to work out over the coming weeks, I am more optimistic than ever that the concerns of Albertans are finally being heard and I look forward to reaching an agreement that will profoundly benefit the Canadian and Alberta economies,” Smith wrote on social media.
“The work is not yet complete and I know many Albertans feel that the rug has been pulled from underneath our feet too many times to count, but I ask for a bit more time, patience and faith as we owe it to our province and country to see this process through.”
Oil and gas production accounts for about one-quarter of Canada’s total greenhouse gas emissions — and Canada can’t hit its emissions reduction target without lowering emissions in this key sector.
The federal government last year announced it would impose an emissions cap on oil and gas production to lower emissions by 35 per cent compared with 2019 levels, but it has not yet been implemented.
Smith and the federal Conservatives have insisted the policy is a barrier to investments and economic growth and have demanded its cancellation.
Environment Minister Julie Dabrusin, speaking alongside Hodgson at the press conference, said the government is still focused on the issue of climate change and is reviewing feedback on the emission cap regulations.
“We’re in a very special moment right now, and that includes making sure that we are fighting climate change and we’re moving to net zero,” she said.
The Carney government has already scaled back or cancelled some climate policies introduced under former prime minister Justin Trudeau. It killed the consumer carbon price and delayed a mandate for electric vehicle sales by at least a year.
Reacting to the news, a senior energy strategist with Greenpeace Canada said backpedalling on climate policy to appease U.S. President Donald Trump is not what Canadians voted for.
“It would be a tragic mistake for the Liberal government to back off on climate action while wildfires are still burning across this country,” Keith Stewart said in a media statement.
“Oil and gas production is the largest and fastest rising source of greenhouse gas emissions in the country and there is no way we can meet our international climate commitments without tackling that sector, which is what the emissions cap was designed to do.
“Mark Carney talks of striking a ‘grand bargain’ with the oil industry where they reduce emissions per barrel while producing more barrels, but that is at best a recipe for maintaining the status quo.”
This report by The Canadian Press was first published Sept. 12, 2025.
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