Elizabeth May vows not to back budget after oil tax credit deal

Green Party leader Elizabeth May has expressed strong regret over supporting the federal budget, calling a new energy agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith a “significant betrayal.” The deal, which extends federal tax credits to enhanced oil recovery (EOR) projects, has prompted May to reconsider her approach to future budget votes.

May said she had initially supported the budget because she received assurances from Carney’s office that federal tax credits would not be applied to enhanced oil recovery, a method that injects carbon dioxide into oilfields to both store carbon underground and increase oil production. Environmentalists argue that offering tax incentives for EOR effectively subsidizes the oil industry, running counter to Canada’s climate goals.

“Whether or not the Prime Minister intentionally misled anyone, this decision shows a disregard for the commitments made to secure support,” May said. “It seems that securing a deal with Alberta took precedence over keeping promises.”

The energy memorandum, signed just ten days after May’s vote, commits the federal government to extending tax credits for large-scale carbon capture, utilization, and storage (CCUS) projects, explicitly including enhanced oil recovery initiatives under the Pathways Alliance project. This reversal of previous assurances was also cited as a reason for former cabinet minister Steven Guilbeault’s resignation, who had been tasked with ensuring May’s support for the budget.

May emphasized that she does not regret her vote, which she said reinforced Canada’s commitment to meeting Paris Agreement climate targets. She noted that her vote was not decisive in passing the budget, as the combination of abstentions from other parties ensured its approval.

“I remain convinced that my actions were principled and done for the right reasons,” she said. “I kept my word when I voted for confidence in this government, but I will not make this mistake again.”

Energy and Natural Resources Minister Tim Hodgson defended the inclusion of EOR in the tax credit program, describing it as a productive step for Alberta and for the broader economy. He highlighted that permanent carbon sequestration in oilfields can reduce emissions while also creating rapid demand for Canadian steel and drilling equipment.

The controversy underscores ongoing tensions in Canadian politics between economic interests, particularly in energy-producing provinces, and commitments to environmental sustainability. May’s statement signals potential challenges for Carney’s government in securing support from environmental-minded lawmakers in the future.