Global trade upheavals, rapid technological change, and the clean transition are reshaping the world economy. Canada's economic strategy must adapt-and fast. Budget 2025: Canada Strong is our plan to make our economy stronger, more self-sufficient, and resilient to global shocks. It will catalyse over $1 trillion in investment over the next five years, driving growth in nuclear, hydro, wind, energy storage, and grid infrastructure to make Canada a leader in the low-carbon economy.
Investing in a clean future is both a moral imperative and the greatest commercial opportunity of our time. As the world moves toward net zero, Canada's climate competitiveness will define Canada's leadership on the world stage. By 2035, the clean technology market will triple, and demand for clean electricity will double. To compete, Canada's investment must keep pace.
Today, the Honourable Julie Dabrusin, Minister of Environment and Climate Change, and the Honourable Tim Hodgson, Minister of Energy and Natural Resources, outlined the government's new Climate Competitiveness Strategy at the Pearl Street Energy Centre in Toronto. The strategy, which positions Canada to compete and win in this new global landscape, is anchored by three pillars:
- Boosting investment through Clean Economy Investment Tax Credits to make it more affordable for Canadian industries to transition to clean energy, modernise electricity grids, expand renewables, increase energy storage, and strengthen power connections across provinces. Our plan will:
- Implement the 15% Clean Electricity investment tax credit and remove the conditions imposed on provincial and territorial governments for their Crown corporations to be eligible.
- Expand the list of critical minerals eligible for the 30% Clean Technology Manufacturing investment tax credit.
- Supercharge affordable, net-zero energy projects with the following tax credits:
- Clean Technology, expanding eligibility to include systems that produce electricity, heat, or both electricity and heat from waste biomass and changed the eligibility requirements for small nuclear energy.
- Clean Hydrogen, introducing availability for hydrogen produced from methane pyrolysis under this tax credit.
- Extend the full value of the Carbon Capture, Utilisation, and Storage investment tax credit by five years through 2035.
- Strengthening industrial carbon pricing to reduce emissions and provide long-term certainty for businesses and investors. Effective industrial carbon markets are integral to driving investment in clean growth and emissions reductions. We are committing to improving carbon markets across the country to provide the confidence and predictability that industry requires to invest and grow. Our plan will:
- Engage with provinces and territories to develop a post-2030 carbon pricing trajectory. We will set an industrial carbon price trajectory that supports net-zero by 2050, giving businesses the confidence they need to make long-term investments in climate competitiveness.
- Engage with provincial and territorial governments on improvements to the federal benchmark. This process will ensure pricing systems across the country are working effectively and enable the implementation of a strengthened benchmark. Additionally, we will explore opportunities to harmonise or link carbon credit markets.
- Apply the federal backstop whenever a provincial or territorial system falls below a strengthened federal benchmark, to ensure a stringent price signal and level playing field across the country.
- The Canada Growth Fund will continue to issue contracts for difference as a means of further improving future carbon price certainty for investors making large, long-duration capital investments.
- Clarifying greenhouse gas regulations, including finalizing enhanced methane regulations for the oil and gas sector. By tightening these regulations, we will significantly reduce emissions across Canada, while providing clarity and predictability for industry. We will also finalise new methane regulations for landfills. Methane is one of the most potent greenhouse gases-80 times more harmful than carbon dioxide over a 20-year period-and one of the easiest to reduce.
In parallel, Canada's new government is investing in the critical minerals that will power the clean energy future. Budget 2025 commits over $2 billion in new investments over five years to accelerate production, create thousands of new-high-paying careers, and strengthen our position in this strategic global market. Through a new Critical Minerals Sovereign Fund, the First and Last Mile Fund, and expanded eligibility for the Critical Mineral Exploration Tax Credit, we will bring more Canadian critical minerals projects into production and unlock the next generation of clean technology supply chains, from electric vehicles to advanced manufacturing.
Combined, these measures form a bold new strategy to supercharge Canadian competitiveness in the global transformation to clean energy. By investing in our people, technologies, and natural resources, we can strengthen our economy today, build resilience for the future, and position Canada as a clean energy superpower in a net-zero world.
