The Oil and Gas Industry’s Capture of Canada’s Energy and Climate Policy

1.1 Canada and Science-Based Policy on Climate

On November 12, 2025, Canada endorsed the Declaration on Information Integrity on Climate Change at COP30. The declaration established shared international commitments to “address climate disinformation and promote accurate, evidence-based information on climate issues.” The initiative noted growing attempts to discredit scientific knowledge and weaken science-based policies, which are the “foundation of urgent climate action by governments.”

This commitment from Canada’s government contrasts with its approach to domestic climate policy. As the current administration enters its eleventh month in power, it has already promised to withdraw climate policies such as the Oil and Gas Emissions Cap and parts of the Competition Act Amendments, while weakening the implementation of others. The government has also publicly supported new oil and gas infrastructure and helped popularize narratives that contradict science-based guidance in that process.

Canada is the world’s 11th-largest greenhouse gas emitter and the 5th-largest oil-producing country. The oil and gas sector is the largest-emitting sector in Canada, accounting for 30% of national emissions in 2023. Although Canada has reduced overall territorial emissions by steadily decarbonizing its domestic electricity sector through renewable uptake, oil and gas emissions continue to grow. In part, this is driven by its increasing crude oil and gas production, most of which is exported; for example, the country exported 81% of its crude oil production in 2023 and 47.8% of its gas production in 2024. In contrast to this export-focused strategy on fossil fuels, the Intergovernmental Panel on Climate Change (IPCC) guidance recommends a significant decline in global fossil fuel production and use to reduce emissions in line with the limits set out by the Paris Agreement, highlighting the need for stringent government regulation to accelerate the phase-out of fossil fuels.

Canada’s oil and gas industry led a coordinated pro-fossil fuel campaign in 2025, escalating its opposition to most forms of regulatory action in the energy sector and calling for the withdrawal of key federal regulations proposed by the previous government. This industry pressure for deregulation reflects a wider trend observed across the EU and the US and appears to have succeeded in Canada, with many of the federal government’s recent announcements mirroring industry demands.

The Organisation for Economic Co-operation and Development (OECD) defines policy capture as “encompassing any situation where the decisions taken in a policy cycle mainly reflect the interests of a narrow interest group”. This appears to be an accurate description in this case. The following sections examine examples of policy positioning and narrative similarities between the federal government and the fossil fuel industry's lobbying.

1. Launch of the Major Projects Office and fossil fuel projects of “national interest”

The changing political landscape in North America over the last year appears to have shifted the oil and gas industry’s key advocacy strategies. In Canada, the oil and gas industry has responded to the change in government by portraying the fast-tracking of oil and gas expansion as crucial to national interests, and painting climate action as antithetical to the country’s economic growth and national security.

• The industry seized the political moment around the Trump administration’s election and the subsequent threat of tariffs to push for expanding fossil fuel production and deepening fuel exports to Asia. In a December 2024 opinion piece in the National Post, the Canadian Association of Petroleum Producers (CAPP) criticized Canada’s federal energy policy and claimed that new gas export infrastructure is required “to build a tariff-proof economy”, adding in a February 2025 press release that together Canada and the United States “could be the most dominant energy superpower on the planet.” CAPP’s submission to the government in August 2025 noted the trade war with “our closest trading partner” and “direct challenges to our sovereignty from the President of the United States,” and called for developing and diversifying oil and gas export capacity. Similarly, TC Energy CEO Francois Poirier claimed in an April 2025 interview that the threat of tariffs “exposed flaws in our economy” and that Canada should become the “world’s largest exporter of LNG to Asia”. Enbridge CEO Greg Abel echoed these claims in an October 2025 speech, stating that LNG development makes Canada “less vulnerable to the next tariff shock, and our sovereignty more robust.”
• Building on the pro-fossil policies adopted by the Trump administration in the US, the Canadian industry followed with a coordinated campaign to push for permitting reform for fossil infrastructure projects. This campaign was spearheaded by a series of “Build Canada Now” letters sent to the government by a group of oil and gas CEOs that promoted growth in oil and gas production as a way to strengthen Canada’s sovereignty and prosperity. The industry sent the first letter ahead of the 2025 federal election to leaders of Canada’s federal parties calling on them to declare a Canadian energy crisis and announce key projects as in the “national interest. It also proposed the use of "emergency powers" by the federal government to expand oil and gas, echoing the US government's declaration of an "energy emergency" in January that year. The second and third letters were sent in April and September, respectively, to the new Prime Minister, Mark Carney. These letters advocated for the overhaul of the Impact Assessment Act (IAA), which outlines the process for assessing the environmental impacts of major projects, and also called for the repeal of the Oil Tanker Moratorium Act (Bill C-48), which prohibits tankers carrying more than 12,500 tonnes of oil from operating in a significant portion of the Great Bear Sea.
• Notably, the oil sands sector shifted its advocacy from climate action to energy security and job creation, aligning more closely with the wider oil and gas sector narratives it had historically distanced itself from. The oil sands sector, led by the Pathways Alliance, rolled back on its climate action-focused messaging in 2025, instead promoting oil expansion through narratives about energy security and job creation. Having previously advocated on their website and in their public communications for a role for oil sands in tackling climate change, the Pathways Alliance removed all its public climate communications after Canada adopted the Competition Act Amendments to strengthen rules addressing misleading environmental claims in June 2024. The group’s most recent Facebook ad addressing/referencing climate change was in June 2024; in contrast, an ad paid for in October 2025 focused on the economic impacts of the oil sector, with limited mention of climate-related issues (see below). In March 2025, Pathways advocated for the federal government to prioritize “removing barriers and developing policies to grow Canada’s oil sands.” The group also publicly endorsed the Build Canada Now letters, signing on to the third one published in September 2025. In February 2026, the group changed its name to Oil Sands Alliance “to better reflect the purpose and mandate of the organization to promote growing the oil sands industry for a stronger Canada.”

• Following industry pressure, on August 29, 2025, Canada’s Prime Minister Mark Carney announced the launch of a new federal office, the Major Projects Office (MPO), “to fast-track nation building projects”. Headquartered in Calgary, the MPO is tasked with identifying projects of national interest, streamlining and accelerating regulatory approval processes, and coordinating their financing. The launch of the MPO and the subsequent announcements closely reflected the oil and gas industry's demands to fast-track fossil fuel expansion.

The table below highlights how the federal government’s policies on energy infrastructure in 2025 correlate with industry pressure in the preceding months. In particular, the federal government’s declaration of ‘national interest’ projects and shortlist of new oil and gas infrastructure shows how the Canadian oil and gas industry successfully used political developments and targeted messages to make a case for fossil fuel development.

2. Government’s Withdrawal of Emissions Regulations in the Oil and Gas Sector

Regulations to manage the oil and gas sector’s emissions formed a key part of the previous Trudeau government’s climate policy agenda. This included policies such as the Oil and Gas Emissions Cap, which would limit the sector’s emissions to 35-38% below 2019 levels beginning in 2030, the Clean Electricity Regulations, and new regulations to reduce methane emissions from the sector.

The oil and gas industry has consistently opposed these regulations. The implementation of the Oil & Gas Emissions Cap has been routinely challenged by the sector since it was first tabled in 2021 – coincidentally, the same year that the largest oil sands producers formed the Pathways Alliance to publicize the industry’s voluntary, technology-led solutions, such as carbon capture and storage (CCS), to reduce oil and gas emissions. Pathways, Cenovus, ConocoPhillips, and Suncor all advocated against the Clean Electricity Regulation in its 2023 consultation period. Pathways, CAPP, Canadian Natural, Cenovus, and MEG Energy also opposed key elements of the methane regulation in 2024, with most entities calling for a province-led approach on methane emissions.

Recent federal government announcements weakened and withdrew key regulations under Canada’s 2030 Emissions Reduction Plan in line with industry demands. Through the November 2025 federal budget plan and the government’s agreement with the Alberta government, policies such as the Oil & Gas Emissions Cap, methane regulations, Clean Electricity Regulations, and Carbon Capture Usage and Storage (CCUS) Investment Tax Credit have been effectively weakened. In February 2026, it withdrew the Electric Vehicle Availability Standard (EVAS). The following table shows how the industry demands have translated to successful outcomes under the new government.

The sector's successful advocacy to eliminate regulation raises concerns about potential future rollbacks of climate policies. For example, while the government appears supportive of the industrial carbon pricing policy, the oil and gas industry continues to lobby against it. In the November 2025 budget announcement, the government announced plans to strengthen the industrial carbon policy following the withdrawal of the Oil and Gas Emissions Cap. However, the September 2025 Build Canada Now letter advocated for its withdrawal to allow provinces to set regulations, the same position taken in the subsequent letters. CAPP’s pre-budget submission to the federal government in August 2025 also pushed back against the federal system in favor of province-led carbon pricing.

The federal government’s response to the oil and gas industry’s relentless campaign to weaken climate action in Canada’s most emitting sector raises concerns about how the country can deliver emissions reductions in line with its 2030 emissions reduction target and the path to net-zero emissions by 2050.

3. Government’s use of industry narratives on decarbonizing fossil fuels

Recent statements from the federal government on fossil fuels closely align with the oil and gas industry's narratives. Most notably, Prime Minister Carney expressed support for “decarbonized oil,” a term used repeatedly by the oil sands industry's campaigns between 2021 and 2025. Prime Minister Carney also promoted the concept of a “decarbonized barrel” in a June 2025 meeting with ministers, seemingly legitimizing a long-term role for oil production accompanied by carbon capture and storage technologies. The federal budget released in November 2025 reiterated these claims, stating that the proposed ‘Pathways Plus CCS’ project will facilitate “low-carbon oil exports from the Alberta oil sands to a range of markets that demand Canadian energy.” The government’s agreement with the Alberta government in November officially supported the construction of the Pathways project to make “Alberta oil among the lowest carbon intensity produced barrels of oil in the world”, a phrase directly traceable to industry lobbying. As pointed out by a DeSmog article, these positions contradict Prime Minister Carney’s earlier positions. In 2015, he highlighted that the vast majority of fossil fuel reserves “will be literally unburnable without expensive carbon capture technology, which itself alters fossil fuel economics.”

• Since its formation in June 2021, the Pathways Alliance’s playbook on climate change has hinged on publicizing the concept of ‘decarbonizing oil’ to ensure continued oil production in Canada. For example, in an October 2022 submission to the federal government, Pathways stated that “the oil sands can play an even bigger role in producing energy for Canada and the world,” if Canadian oil sands “can reduce its carbon intensity below other global sources of oil.” It added that “Canada should seek to increase its market share for responsibly produced, lower emissions energy, even if global market demand, as a whole, begins to decline.” Pathways member companies, such as Cenovus, Imperial Oil, and MEG Energy, have further popularized these concepts through their communications in recent years.
• The industry has leveraged the concept of decarbonizing oil production to advocate for substantial government investment in carbon capture and storage (CCS), to mitigate the high costs of developing CCS projects. This includes advocacy where the promise of CCS is used to justify continued oil production. In August 2024, Pathways’ submission to the government’s budget consultation advocated for the CCUS Investment Tax Credit to develop CCS projects in the oil sands sector, “for Canada to become a preferred supplier of oil.” However, the group noted that “significant costs (capital and operating costs) remain for these CCS projects with a long payout period.” In a May 2025 interview with The Logic, Cenovus CEO Jon McKenzie advocated for government financial support to “decarbonize the barrels” with CCS, adding that it “is expensive, and there’s no revenue line associated with it” and that “CCS is a pure cost to the industry.”

However, the claim that countries can increase “decarbonized” oil production by using CCS technologies while remaining consistent with climate targets is not supported by climate science. The IPCC recommends a significant reduction in global fossil fuel production and use, with a limited and targeted role for CCS given the technology's risks and uncertainties. Science-aligned use of CCS would involve capturing the final emissions from fossil fuel use, primarily from “residual” gas used in power plants. The oil sands sector’s communications on CCS do not address this issue and instead promote its use in oil production and processing, despite it accounting for a smaller share of emissions than those from final fossil fuel combustion. The government’s adoption of industry narratives about the promise of CCS, as evidenced in its recent communications on the Pathways Plus CCS project via the Major Projects Office, remains problematic. See InfluenceMap’s June 2024 briefing that highlighted the oil sands sector’s own contradictory communications on the effectiveness of CCS technology.

4. Government’s Promise to Weaken Measures on Corporate Accountability in Climate Communications

In its November 2025 budget, the federal government announced its “intention to propose legislative amendments to remove some aspects” of the Competition Act Amendments adopted in June 2024, while “maintaining protections against false claims.” The amendments being targeted require the corporate sector to substantiate any publicly made claims related to climate and the environment — a proposal that drew severe criticism from the oil and gas sector.

• When the Competition Act Amendments were initially announced in June 2024, several oil and gas entities that regularly communicated about their climate efforts withdrew a large proportion of their climate messaging. This included Pathways Alliance, CAPP, Cenovus, Imperial Oil, Canadian Natural, Enbridge, Suncor, and TC Energy, all of which removed climate-related messaging from their websites. Since then, the oil sands industry has consistently opposed these provisions. At the same time, InfluenceMap observed a drastic reduction in the transparency of corporate reporting on climate-related advocacy and engagement after June 2024.

• The industry responded negatively to the Competition Bureau’s consultation on these amendments in September 2024, attempting to hinder their implementation. CAPP, Pathways Alliance, and Enbridge all submitted oppositional comments. CAPP called for the full repeal of the provisions, claiming that the amendments “hamper business’ ability to gain public support for their projects and products.” It cautioned against any government attempt to hold the corporate sector accountable for its communications related to the environment, adding that “we are skeptical that any amount of guidance can provide Canadian businesses with the confidence to openly discuss their environmental ambitions and progress.” Further, in its February 2025 response to the Bureau’s draft guidelines published in December 2024, CAPP reiterated its “continued opposition to the new greenwashing provisions.”

• The oil and gas industry’s arguments against these amendments focus on the threat of “frivolous” legal action arising from these provisions. Pathways’ response to the Competition Bureau in September 2024 claimed that the provisions would expose the industry to “politically motivated litigation and substantial financial penalties under the Act.” The group also claimed that it would put Canadian businesses at “a competitive disadvantage” and could “negatively affect Canada’s reputation as an environmental leader.” Enbridge’s submission claimed that companies may be faced with “defending frivolous, vexatious or meritless complaints,” and in an August 2025 comment, it again advocated to repeal specific sections of the act that concerned these provisions. Similarly, CAPP highlighted the cost to businesses from “a potentially large volume of frivolous and vexatious claims by private applicants” in its February 2025 submission. Despite the industry claim that the Act opens business to “frivolous litigation,” courts have concluded in favour of the claimant in 54 out of the 77 climate-washing cases reviewed between 2016 and 2023, according to LSE’s Grantham Research Institute’s June 2024 report.

The new Canadian government’s adoption of a high proportion of oil and gas demands and narratives in just its first ten months demonstrates the considerable success of the industry’s advocacy campaigns and its capture of climate policymaking in Canada. Policy capture happens where rules to ensure open and fair policymaking are undermined. It is therefore notable that the efforts of the previous Canadian government to strengthen rules addressing misleading environmental claims have also been slated for weakening in response to industry pushback. Despite the government continuing to reiterate its commitment to the 2050 net-zero emissions target, most recently in the agreement with Alberta, key policy decisions have been fundamentally at odds with the established scientific guidance to deliver these targets. This remarkable level of success in industry advocacy in 2025 underscores the need for strong transparency and accountability mechanisms for corporate influence over climate policy.