The Trudeau government has focused on the oil and gas production industries because the large amounts of energy they use make them the country’s largest source of greenhouse gases.

Oil and gas is Canada's highest-polluting industry and its emissions continue to rise, undercutting progress in many other parts of the economy. Ottawa will likely fall short of its commitment to reduce emissions by 40-45% from 2005 levels by 2030 unless the oil and gas sector intensifies efforts to decarbonize.

The cap on energy-sector emissions is a longstanding promise from Canada’s Liberal government. The Business Council of Canada said the cap would pose a headwind for an economy struggling to record growth.