Ottawa’s tax credits to reduce emissions aren’t working as intended, watchdog says

A new audit by Canada’s environment commissioner says the federal government’s plan to reduce emissions through tax cuts and investments has not been implemented as intended.

Jerry DeMarco says more than $100 billion in taxpayer money — earmarked for projects to reduce emissions, like carbon capture and storage — was spent ineffectively.

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He says clean technology tax credits had low uptake and investment incentives for the oil and gas sector were risky, given the uncertain future of the government’s industrial carbon pricing plan.

The report comes after the release of the Carney government’s first budget on Tuesday, which called for increases to investment tax credits, including a $3 billion boost for companies investing in carbon capture technology.

The budget did promise to strengthen Ottawa’s industrial carbon pricing system but provided no details on how the government plans to do that.

De Marco has been highly critical of multiple federal governments for repeatedly setting targets to cut emissions without doing enough to meet them.

This report by The Canadian Press was first published Nov. 6, 2025.