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Montrealers lined up around the block on a chilly March evening as they waited to enter one of the final Liberal leadership campaign events of then-Liberal leadership contender Mark Carney.
It just so happened to be held at a venue in downtown Montreal, in the riding of then-environment minister Steven Guilbeault.
Guilbeault warmed up the crowd and endorsed Carney before he turned the podium over to Foreign Affairs Minister Mélanie Joly, who formally introduced their preferred leadership candidate.
Moments later, the crowd roared in approval as Carney pledged to promote sustainable growth and turn Canada into a clean energy superpower.
Little did they know, by the following week, Carney would be Canada’s 24th prime minister and Guilbeault would no longer be the environment minister.
Apart from hinting at some larger themes, Carney has not yet talked about his environmental policies in detail. He has certainly not yet spelled out clear plans to address emissions from the oil and gas industry, which is described by the federal government as the country’s largest source of climate-warming carbon pollution.
Despite the lack of details, Alberta Premier Danielle Smith has said she believes Carney is on a “warpath” against the energy industry and sees him as an adversary — not an ally.
On Friday, Guilbeault was shuffled from his position in cabinet, taking on a new role as minister of Canadian culture and identity. Guilbeault’s position also includes oversight of Parks Canada.
His removal from the environment portfolio could be perceived as an olive branch to an oil and gas industry that sees Guilbeault’s history as an environmental activist as a lightning rod.
It comes on the eve of an anticipated election campaign showdown with Conservative Leader Pierre Poilievre, Bloc Québécois Leader Yves-François Blanchet, NDP Leader Jagmeet Singh and Green Party co-leaders Jonathan Pedneault and Elizabeth May.
Poilievre has already described Guilbeault’s appointment as Carney’s Quebec lieutenant as a “promotion.” The opposition leader says it means the former environment minister has a new platform to “push carbon taxes, block resource projects and road building.”
Newly minted Environment Minister Terry Duguid is from the Prairies, representing Winnipeg South. Duguid also served as minister of sport in former prime minister Justin Trudeau’s cabinet and was parliamentary secretary to Guilbeault. Prior to entering politics, Duguid founded an environmental services management firm.
Carney made very few comments about the environment in his first hours on the job, apart from confirming at his first cabinet meeting that his government will quickly eliminate Canada’s price on carbon pollution for consumers. He also indicated one of his goals is to “make Canada an energy superpower in both conventional and clean energy.”
But during the Liberal Party of Canada leadership campaign, there were a few additional hints about where a Carney government is headed in terms of energy and the environment.
Here’s what we know so far.
It remains to be seen whether Carney will find the sweet spot in balancing policies to respond to U.S. President Donald Trump’s tariffs while also tackling climate change.
During the Liberal leadership campaign, Carney — previously an international deal maker on climate action as a United Nations special envoy on global warming — proposed a plan to impose penalties on imported products that don’t meet Canada’s climate standards.
He said these penalties — commonly referred to as a “carbon border adjustment mechanism” — would be introduced after consulting with “key stakeholders and international partners” to ensure Canadian industries would be treated fairly, while protecting jobs.
Such a policy could be key for sectors such as steel and aluminium, which are targets of Trump’s tariffs. It could also impact fossil fuels, providing an advantage to Canadian oil producers by making imports from places like the Middle East or Venezuela more expensive. In terms of the emerging trade war, a border adjustment policy could help target the economy and jobs in the U.S. regions that propelled Trump to power and tend to be skeptical about introducing strong policies to address climate change. The Republican-controlled regions with the weakest climate policies could be the hardest hit in terms of the price they would pay to sell their products to consumers in Canada.
Carney’s proposal would follow in the footsteps of the European Commission, which has already introduced similar penalties at the border.
Carney allowed the media to witness the first moments of his cabinet meeting on Friday, where he announced the government would cancel the carbon tax “immediately.”
Although the measure is officially known as a price on carbon, and the Supreme Court of Canada ruled it was not a tax because it does not raise government revenue, Conservative politicians — most prominently his election rival, Poilievre — have derided it as a “carbon tax.”
This is what fuel distributors pay and charge to consumers. (Canadians were refunded through a government rebate.) In most of the country, Poilievre has successfully stoked anger by linking carbon pricing to inflation — despite research suggesting this is not true — and saying he could make life more affordable by fulfilling his promise to “axe the tax.”
Carney said Canadians who previously received rebates under the policy would still receive a rebate cheque in April.
“This will make a difference to hard pressed Canadians but it is part of a much bigger set of measures that this government is taking to ensure that we fight against climate change, that our companies are competitive, and the country moves forward,” he said.
The removal of federal carbon pricing may not be popular for the majority of consumers in Quebec, where nearly two-thirds of households use hydroelectricity — not fossil fuels — to heat their homes. In addition, Quebec has its own carbon pricing regime, which is not expected to change.
Canada already has some rules that require oil and gas companies to slash emissions of methane during production — a feat that can be accomplished with existing technologies and improved practices.
The federal government has also proposed to impose a new cap on oil and gas emissions, but this proposal was never finalized.
During the campaign, Carney said he would “explore” the strengthening of existing standards by working with provincial and territorial governments.
But it’s not clear how far he would go. The federal government currently has a proposal to strengthen standards on the table.
Carney also proposed to “improve and tighten” a current system that sets a price on pollution from large industrial emitters.
His campaign noted the existing system gives industry some certainty about how much they will pay for their carbon pollution, but it does not offer the same level of certainty when it comes to how they could financially benefit by reducing their pollution.
Carney said this approach would drive investments to “the lowest-carbon opportunity.” Part of his plan also proposes to extend the existing system by a few years, until 2035, to “help foster Canada’s clean industrial competitive advantage.”
Carney’s leadership campaign said Canada has a number of “major investment imperatives” and one of those is to expand and modernize the country’s energy infrastructure “so that we are less dependent both on foreign suppliers and the United States as our main customer.”
His campaign policy documents don’t go further into detail, so it’s not clear whether this means he would support new subsidies — such as the billions of public dollars that went towards building the Trans Mountain expansion pipeline from Alberta to the west coast of British Columbia.
Carney’s campaign said Canada “must invest to become a clean energy superpower in nuclear, hydro power, wind, hydrogen, battery storage and carbon capture.”
Most of those categories include companies competing with the oil and gas industry, with the exception of carbon capture investments, which could help the oil and gas industry lower its emissions. The federal government has already offered some tax breaks and incentives to support new investments in this area, and major Canadian oil producers have asked for more to move forward.
While Alberta’s premier has criticized Carney for being a key figure in an international net-zero banking initiative, it is worth noting the large Canadian oil producers that want subsidies have also made some net-zero pledges of their own — albeit not without generating some controversy.
Aside from questions about subsidies, many of the major clean energy sectors he has promoted could also lobby for the government to loosen environmental oversight and reviews of major projects.
Canada’s Impact Assessment Act, a major piece of environmental legislation adopted in 2019, has become a flashpoint in an acrimonious debate between Liberal and Conservative politicians over whether it was designed to stifle the oil and gas industry.
But a number of businesses, including in the clean energy sector, may also want to see the legislation watered down, to speed up development of new major projects.
In his campaign, Carney pledged a “one window” approach to approval of major projects. He said this would allow businesses to “navigate regulations faster and with fewer redundancies across federal departments.”
For most projects, he said his plan would recognize provincial environmental reviews, to speed up decisions and permitting under federal laws such as the Fisheries Act.
Any such changes could also benefit the oil and gas industry. It remains to be seen how far Carney would go.
Get the inside scoop on The Narwhal’s environment and climate reporting by signing up for our free newsletter. On Sunday, across most of Canada, the...
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