After years of steady progress, Canada's climate plan is working to deliver greenhouse gas pollution reductions for Canadians. Across the economy, Canadian workers and businesses are innovating to reduce greenhouse gas pollution while creating good jobs and cleaner air.
Canadians and their communities bear the brunt and pay the costs from increased extreme weather events due to climate change-costs that are reflected in the price of groceries, insurance, and local taxes. They understand that all sectors must do their fair share to decrease pollution and address climate change. The oil and gas sector is Canada's largest source of greenhouse gas pollution, and emissions from part of the sector continue to grow. As an important part of the Canadian economy supporting 400,000 jobs, the oil and gas sector is well positioned to reinvest record profits into projects that drive cleaner production that will help create and sustain good jobs for generations.
Today, the Government of Canada introduced draft regulations to put a clear limit on greenhouse gas pollution from oil and gas production. The proposed regulations work by setting a cap on greenhouse gas pollution within the sector, equivalent to 35 percent below 2019 levels. They would create a cap-and-trade system designed to recognize better-performing companies and incentivize those that are higher polluting to invest in making their production processes cleaner.
The proposed regulations put a limit on pollution, not production, and have been informed by extensive engagement with industry, Indigenous groups, provinces and territories, and other stakeholders. The proposed regulations are carefully designed around what is technically achievable within the sector, while allowing continued production growth. Many oil and gas producers share our commitment to a strong, low-carbon economy, and some have already committed to significant methane emissions reductions and the implementation of carbon capture technology to reduce greenhouse gases.
Canada is the world's fourth-largest producer of oil and the fifth-largest producer of gas. As demand for oil and gas peaks in the coming decade and begins to decline, the fuels extracted with the least amount of pollution will be in highest demand. The oil and gas greenhouse gas pollution cap will help the sector remain competitive as the global economy continues to decarbonize and allow Canada to quickly and effectively respond to shifting global demand.
The oil and gas greenhouse gas pollution cap is part of a suite of measures to cut pollution, including significant financial supports for carbon capture and storage and other clean technologies that also support workers, namely through the federal Canada Growth Fund and new investment tax credits.
The climate decisions we make today will help contribute directly to a cleaner, safer environment and good jobs for future generations. The oil and gas greenhouse gas pollution cap will stimulate the investment needed to innovate and build a thriving economy that works for everyone. Canada has a historic opportunity to act to combat the climate crisis and create a strong 21st century economy where we continue to be an energy supplier for the world.
The Government will continue to consult to inform the final regulations, which will be published in 2025.
