What a Carney Government Means for Climate

By: Laura Robertson and Helena Teng

Businesses are operating in an uncertain landscape shaped by shifting economic and environmental priorities – from escalating trade tensions to retreats from climate and sustainability commitments. Climate and energy policies are under increasing pressure from regulatory rollbacks abroad and concerns related to competitiveness and affordability.  

The April 2025 election represented a critical moment in setting the trajectory for Canada’s climate action. In his acceptance speech, Carney reaffirmed his pragmatic approach to tackling climate change while growing the Canadian economy, declaring: “it’s time to build an industrial strategy that makes Canada more competitive while fighting climate change.”¹ This underscores the prioritization of economic stability as a foundation of his agenda. While climate goals will remain ambitious, Mark Carney’s approach will be rooted in economic pragmatism, leveraging market-driven solutions and investment incentives to position Canada as a global leader in the clean economy.   

This brief outlines what to expect from the new government on climate and the implications for businesses in this changing economy.  

What Carney’s Track Record Tells Us  

Mark Carney is widely recognized as a crisis manager with deep expertise in global financial markets, economic policy, and climate strategy. With a PhD in economics and an early career in finance, he served as Governor of the Bank of Canada and has been praised for steering Canada through the 2008 financial crisis. As Governor of the Bank of England he managed the economic shocks of Brexit and the COVID-19 pandemic².  

Climate and sustainability have been central to Carney’s leadership. As UN Special Envoy for Climate Action and Finance, Carney focused on mobilizing private finance to align with the Paris Agreement and formed the Glasgow Financial Alliance for Net Zero (GFANZ)³. Carney played a key role in establishing the Task Force on Climate-Related Financial Disclosures (TCFD) now a gold standard for reporting on climate risk⁴.

Carney’s experience positions him to lead a government focused on integrating climate action with financial stability and economic competitiveness. 

Summary of Campaign and Platform Commitments 

Mark Carney’s ‘Canada Strong’ platform focused on uniting Canadians, defending Canadian sovereignty and values, and building a strong economy. On climate, Carney emphasized a balanced approach that promotes competitiveness in traditional energy sectors while advancing the clean-energy transition. Carney’s platform underscored the need to drive down emissions, grow the economy, and diversify trade⁵. 

Industrial Competitiveness Strategy and Clean Growth – Carney pledged to build an economic strategy with climate at the centre supported by carbon markets and accelerating clean-energy project approvals. Key commitments include: 

• Strengthening industrial carbon pricing while protecting Canadian industry through implementing a Carbon Border Adjustment Mechanism (CBAM) that levels the playing field and prevents carbon leakage by applying equivalent carbon costs to imports from countries with weaker climate policies. 

• De-risking investments through carbon contracts for difference, a financial tool that guarantees a predictable carbon price for low-carbon projects and covers the gap if market carbon prices fall below a pre-agreed level. 

• Finalizing the oil-and-gas emissions cap and oil-and -gas methane regulations.  

• Increasing investments in carbon-capture and storage technology with ambition for global leadership in carbon removal and sequestration. 

• Boosting domestic clean fuel production to reduce reliance on imports, creating new opportunities for Canadian fuel producers and farmers to supply bio-based feedstocks. 

Sustainable Finance and Climate Risk Disclosure – Carney plans to drive forward measures related to sustainable finance and climate risk. Commitments include: 

• Finalizing the voluntary made-in-Canada sustainable investment taxonomy for every priority sector by Fall 2026. This classification system will define the criteria for economic activities considered sustainable, aiming to direct investment to projects that support sustainability and climate goals.  

• Establishing broad coverage of climate-risk disclosures across Canada. It is expected that Carney would push for broad, mandatory, and standardized climate disclosures, extending beyond public markets to cover all major emitters and capital holders. 

• Issuing Canada’s first-ever transition bonds in 2027 scaling to $10 billion/year. These financial instruments will help high emission industries raise capital to fund their shift towards a low carbon economy.  

Incentivizing Investments in Clean Technology and Low Carbon Transport – To catalyze private and external investments, the platform included major incentive mechanisms: 

• Complete regulatory implementation of all clean investment tax credits (ITC), including CCUS, clean technology, electricity, hydrogen, manufacturing, and EV supply chain credits, estimated to support $200 billion of private capital investment in Canada over five years. 

• Expanding the electric vehicle (EV) charging network. 

• Introducing a First and Last Mile Fund to connect critical minerals to the supply chain.  

Strategic Direction and Implications for Businesses 

Mark Carney’s climate strategy will be shaped by his financial background and the volatile global market. His approach will prioritize market-driven solutions over regulatory mandates. emphasizing financial incentives, corporate responsibility, and investor accountability. Climate policy will be deliberately woven into Canada’s broader economic strategy, aiming to build industrial competitiveness amid trade tensions and recession risks.   

Pragmatic Regulatory Approach  

Carney’s regulatory approach will likely reflect pragmatism and flexibility, aiming to build broad support and ensure long-term policy durability. To meet Canada’s climate targets, Carney will maintain and strengthen key climate policies, including the economy-wide industrial carbon pricing system and sector-specific policies. Carney has confirmed he will keep the oil-and-gas emissions cap – a highly contentious policy drafted under the Trudeau government – but has signaled openness to adjustments. These may include greater flexibility for industry or a shift in implementation approach. While the Clean Fuel Regulation (CFR) was not explicitly mentioned in the platform, there was a commitment to increasing Canada’s production of clean fuels. The CFR is unlikely to be an early priority, but potential reforms could focus on enhancing incentives for domestically produced fuels over imports. In parallel, Carney will advance broad climate-risk disclosure requirements, ensuring companies are transparent about their climate exposures and prepared to develop actionable transition plans.  

Climate as a Driver of Economic Growth 

Businesses can expect a wide range of tools and incentives to support their low-carbon transformation, including investment tax credits related to manufacturing, technology, and carbon capture. Programs like the First and Last Mile Fund and the Canada Growth Fund will offer capital support for infrastructure and innovation aligned with climate and economic goals. Finalizing Canada’s sustainable investment taxonomy will unlock further investment into key sectors such as energy, transportation, and natural resources– providing clarity and confidence to investors and businesses. 

A Made-in-Canada Approach  

Carney’s plan emphasizes homegrown solutions, including domestic innovation, regional supply chains, and investing in critical sectors like EV battery production. The focus on homegrown solutions ensures that Canadian businesses remain resilient and competitive amid geopolitical tensions and global supply chain shifts. 

Bottom Line for Businesses: 

Carney’s platform merges climate ambition with economic pragmatism. It leverages market signals and investor-led accountability to drive change. For businesses, climate action is no longer secondary – it’s deeply embedded in how Canada defines industrial competitiveness, investment readiness, and trade access. Businesses that adapt quickly will benefit from incentives, financing, and global opportunities. Those who lag behind risk rising compliance costs, reduced investment, and/or exclusion from climate-aligned markets.  

What to Expect in the Next 6-12 Months 

Key priorities we expect the Carney-led Liberal government to advance in the next 6-12 months: 

• Expanded market-based climate measures: We anticipate a strong focus on policy mechanisms that leverage the power of markets and price signals to incentivize investment and bring in private capital. Expect targeted tax credits, subsidies, direct investment, and public-private partnerships to de-risk investments in clean energy, technology, and infrastructure. The Platform emphasized CCUS and carbon-removal technologies, signaling plans to develop new offset protocols.  

• Industrial carbon pricing enhancements: Alongside officially repealing the consumer carbon tax, we expect the government to promptly deliver on its commitment to strengthen industrial carbon pricing. An interim review of the federal carbon pricing benchmark is slated for completion by 2026, providing an opportunity for significant updates.vi Likely enhancements include efforts to improve market functioning such as inter-provincial linkage, development of carbon border adjustment mechanisms, and expansion of carbon contracts for difference.    

• Financial system alignment: Climate-related financial regulation will likely be an early priority. Expect mandatory climate-related disclosure legislation requiring companies to assess risks and develop transition plans. We also expect the government to move quickly on a transition taxonomy to direct private capital into sustainable activities. Refer to Delphi’s 2025 Guide to Sustainability and Climate Disclosure Programs for help navigating North American and international sustainability and climate disclosure programs 

Key Moments to Watch: 

• Cabinet Appointments (early- to mid-May): Appointments to key portfolios – Environment and Climate Change, Natural Resources, Finance, and Innovation Science and Economic Development – will signal how central climate will be in broader economic and industrial strategy. We’ll also watch for the creation of new Ministries and portfolios.  

• Speech from the Throne (late-May): This will be Carney’s first formal opportunity to set the vision, agenda, and priorities for his government. We will be watching for signals on climate ambition and whether the approach will be incremental or transformative. 

• Mandate Letters (mid-June): Mandate letters will clarify departmental priorities. We’ll be watching for climate-related accountability, strategic priorities, and specific policy deliverables.  

• Budget (June): Delayed by the election, the 2025 budget will be the first major fiscal deliverable. We’ll be watching how climate investment is integrated into fiscal and industrial strategy, including infrastructure spending and investment tax credits. Given the minority government, coalition building and negotiations will be required. 

• Global Engagements- G7 (June) COP30 (November 2025): These represent key moments to re-assert Canada’s global leadership on climate, finance, and multilateralism. Given Carney’s strong international expertise and reputation we expect international engagement will be a significant priority. Canada holds the G7 Presidency for 2025, with the Leaders Summit in June and various events throughout the year. We’ll be watching which alliances are strengthened (particularly in light of the U.S.’s retreat), and for new targets or policy announcements.  

Under Mark Carney’s leadership, climate action will be directly tied to Canada’s economic strategy. Carney’s government views climate as an economic opportunity to drive transformation, enhance competitiveness, and lead in global clean economy. We expect climate to be embedded in policy decisions with accelerated action on sustainable finance, enhanced climate regulations, and clean industry support.  

The government will be up against real challenges including economic headwinds, provincial opposition, and the constraints of a minority government. Passing legislation will require negotiation and compromise with opposition parties. The government’s success will depend on addressing public concerns, business realities, and regional dynamics to build national consensus. Businesses should prepare to leverage federal investments, incentives, and market shifts as the government aligns climate and economic priorities to drive long-term transformation and value. 

How Delphi can Support

Delphi is here to help you navigate the new political landscape and stay ahead of risks and opportunities. Reach out for expert guidance including policy and regulatory analysis, climate strategy, climate disclosure, transition planning, and to stay on top of new grants and incentives.

Connect with Laura Robertson, Senior Policy Consultant, lrobertson@delphi.ca, or Eleanor Eden, Senior Consultant, Climate Risk and Sustainable Finance, eeden@delphi.ca.

NOTES

1. Dangerfield, K. (2025, April 28). Read the transcript of Prime Minister Mark Carney’s victory speech. Global News. Retrieved from: https://globalnews.ca/news/11154593/canada-election-mark-carney-victory-speech/

2. King, B. & King, R. (2025, April 29). Who is Mark Carney, Canada’s Liberal leader? BBC News. Retrieved from: https://www.bbc.com/news/articles/c3911lv1pzko

3. The Economist. (2023, November 23). Mark Carney argues that finance needs to go where the emissions are. The Economist | COP27: Climate Finance. Retrieved from: https://www.economist.com/by-invitation/2023/11/23/mark-carney-argues-that-finance-needs-to-go-where-the-emissions-are

4. Task Force on Climate-Related Financial Disclosures (TCFD). (n.d.). About. Retrieved from: https://www.fsb-tcfd.org/about/

5. Liberal Party of Canada. (2025). Canada Strong: Mark Carney’s Plan. Retrieved from: https://liberal.ca/cstrong/