Ministers Dabrusin and Hodgson outline Budget 2025’s new Climate Competitiveness Strategy

TORONTO, Nov. 9, 2025 /CNW/ – 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.

Quotes

“Canada must act with urgency, unity, and determination. At this critical moment, we have a choice: lead–and seize the opportunities of the energy transition–or get left behind. With the Climate Competitiveness Strategy, we are positioning climate action and economic growth as inseparable, aiming to build a stronger, more sustainable, and more competitive Canada for decades to come. This will help us take action in a way that prioritises affordability for Canadians and strengthens our economy.”

– The Honourable Julie Dabrusin, Minister of Environment and Climate Change

“Canada is securing our place as a global energy and resource superpower–and by doing it responsibly and sustainably, we are securing wins for Canadians and the planet. We know what a strong economy and clean environment require, and our Strategy provides it: clarity and predictability that drives innovation, attracts investment, and mobilises capital. We have a responsibility to protect Canada’s environment and economy for generations to come, and that delivery starts now.”

– The Honourable Tim Hodgson, Minister of Energy and Natural Resources

Quick facts

• The Strategy outlines clear rules that will cut emissions, drive innovation, and attract investment. Public and private capital will be mobilised toward a net-zero economy, establishing sustainable investment guidelines, a Sustainable Bonds Framework, improving climate disclosures in collaboration with provinces and territories, and amending anti-greenwashing provisions to improve investor certainty.
• Our government’s commitment to a low-carbon economy is reflected in the work of the Major Projects Office (MPO). One of the criteria for designation as a Project of National Interest is how a project will contribute to clean growth and to Canada’s objectives with respect to climate change. This office will continue to evaluate projects for fast-tracking based in part on their contributions to clean growth and Canada’s climate goals.
  • The first unit of the Darlington New Nuclear Project will provide reliable and affordable clean power to 300,000 homes, and position Canada as a global leader in the deployment of this technology worldwide.
  • Expected to be the first net-zero copper project in Canada, the McIlvenna Bay Foran Copper Mine Project will strengthen Canada’s supply of critical minerals, creating hundreds of new careers across local economies.
  • The Red Chris Mine expansion will increase Canada’s annual copper production by over 15% and reduce the mine’s greenhouse gas emissions by over 70% when operational.
  • Wind West could be Canada’s first offshore wind development and will set the scale, direction and trajectory for future growth. Unlocking 5,000 MW in the first phase could produce 24 TWh of clean energy every year and drive billions in new investment and economic activity across Canada, led by the private sector. This Eastern Energy Partnership could include important projects like interties between New Brunswick and Nova Scotia, transmission cables between Prince Edward Island and New Brunswick as well as Quebec’s and Newfoundland and Labrador’s further development of Churchill Falls and Gull Island.
  • Alto High-Speed Railway, spanning approximately 1,000 km from Toronto to Quebec City and reaching speeds of up to 300km/hour to cut travel times in half and connect close to half of Canada’s population. This project targets 25 million tonnes of CO2 emissions savings, the creation of 51,000 new jobs and 63,000 new housing units along its route.
  • This approach also extends beyond those industries. In homebuilding, factory-built homes will give more Canadians an affordable place to live while cutting emissions by over 20% compared with traditional construction methods.
• Carbon pricing systems are a major component of Canada’s clean investment landscape. Seventy major decarbonization projects across the country, collectively worth over $57 billion, are supported by industrial carbon markets. Around $4.3 billion in annual clean energy investment is linked directly to the existence of carbon pricing for large industrial emitters.
• Budget 2025 commits to implementing the 15 % Clean Electricity investment tax credit, which will be available once legislation is passed and guidance finalized. This can cover 15 % of capital costs of eligible investment in equipment related to low-emitting electricity generation, electricity storage and interjurisdictional transmission projects. 
• In 2024, global investments in clean energy reached over $2.8 trillion–nearly double the level of investment in fossil fuels–and the global clean technology market is expected to triple by 2035.
• The government will provide transparent updates on progress and introduce new metrics to measure how businesses and households are cutting emissions, how the clean economy is expanding, and how Canadian exports are tracking to achieve world-leading emissions intensity.
• Climate change is a growing threat to Canada and the world. We are already seeing the risks and costs of climate change through extreme weather events like wildfires, drought, floods, and more severe storms. Over the last decade, the average yearly cost of weather-related disasters and catastrophic losses has risen to the equivalent of 5 to 6% of Canada’s annual GDP growth. The Insurance Bureau of Canada says that extreme weather events caused $9.2 billion in insured losses in 2024.

Related products

• Backgrounder: Strengthening Carbon Markets
• Backgrounder: Accelerating Canada’s Clean Power Advantage
• Backgrounder: Clarity on Greenhouse Gas Regulations 

Associated links

• Budget 2025: Canada Strong

Environment and Climate Change Canada’s X page

Environment and Climate Change Canada’s Facebook page

Environment and Natural Resources in Canada’s Facebook page

Environment and Climate Change Canada’s LinkedIn page

Environment and Climate Change Canada’s Instagram page

SOURCE Environment and Climate Change Canada

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