Nearly thirty years of climate policy, carbon pricing, and clean-energy subsidies have done remarkably little to loosen fossil fuels’ grip on the Canadian economy, a newly released report suggests.
The study, published July 21 by the Fraser Institute’s Mathison Energy Research Initiatives, found that fossil fuels supplied 76.3 percent of Canada’s total energy consumption in 2024 almost identical to the 76.7 percent share they held back in 1995. Authors Kenneth Green, Julio Mejía, and Elmira Aliakbari argue the figures tell a simple story: whatever momentum Ottawa has tried to build toward a cleaner grid and a greener economy, it hasn’t meaningfully dented the country’s underlying dependence on oil, gas, and coal-derived energy.
The country’s overall energy appetite has swelled substantially over the period studied, climbing 26.6 percent as Canada’s population and economy expanded. Natural gas use jumped even faster, up 43.2 percent since 1995, while refined petroleum products such as gasoline and diesel rose 18.4 percent. Non-fossil sources hydro, nuclear, and renewables actually posted the strongest relative growth of the three at 29.2 percent.
Yet that faster growth rate translated into almost nothing in terms of market share. Clean sources inched from 23.2 percent of Canada’s energy mix in 1995 to just 23.7 percent in 2024 a gain of roughly half a percentage point over 29 years. Today, natural gas alone accounts for 37.6 percent of national energy use, with refined petroleum adding another 35.7 percent.
The report breaks down consumption by economic sector, and the picture is consistent across the board: heavy reliance on fossil fuels persists almost everywhere.
Industry remains Canada’s single largest energy consumer, responsible for 35.4 percent of total use in 2024. That sector spanning mining, oil and gas extraction, manufacturing, forestry, and construction draws 74 percent of its energy from fossil sources, with natural gas alone making up 58.3 percent.
Transportation comes in second at 30.5 percent of national energy consumption, and it is almost entirely fossil-fuel dependent, at 98.7 percent. The authors note that electric vehicle adoption, while growing among personal cars, barely registers against the scale of aviation, freight trucking, marine shipping, and rail all of which remain firmly tied to conventional fuels.
Residential buildings rank third at 15.4 percent of total consumption, with just over half 50.6 percent still coming from fossil fuels, primarily natural gas used for home heating.
Beyond consumption patterns, the report also sizes up energy’s footprint in the broader economy. It calculates that the energy sector made up 6.9 percent of Canada’s GDP in 2025, ranking as the country’s eighth-largest sector by economic output.
That contribution, however, is far from evenly spread. In Alberta, energy accounts for a striking 30.1 percent of the provincial economy, and in Newfoundland and Labrador the figure sits at 22.7 percent. By contrast, energy makes up only 3.1 percent of Quebec’s economy and just 2.5 percent of Ontario’s underscoring how differently the transition debate lands depending on where in the country you stand.
“Despite ongoing discussions about transitioning away from fossil fuels, the reality is that they remain the cornerstone of Canada’s energy production and consumption,” the report states.
The findings arrive amid an ongoing and often heated debate over the direction of federal energy policy. Ottawa has poured billions into tax credits, subsidies, and other incentives meant to accelerate clean-energy development and electric vehicle uptake, alongside carbon pricing and emissions regulations targeting industry and transportation all in pursuit of its stated goal of net-zero emissions by 2050. Federal officials contend the strategy will sharpen the competitiveness of Canadian exports, spur technological innovation, and help curb climate change.
Conservative Leader Pierre Poilievre sees it differently. He has argued for years that Liberal climate policy has done more economic harm than environmental good raising costs for families and businesses while chilling investment in resource-dependent industries. His criticism has repeatedly zeroed in on the federal carbon tax, clean electricity regulations, the oil-and-gas emissions cap, and drawn-out environmental review processes, which he says push jobs and capital toward the United States and other competitors.
Poilievre’s alternative prescription centers on faster approvals for energy and infrastructure projects, expanded oil and gas production, and a bet on technological innovation over carbon pricing as the path to lower emissions an approach he says would grow the economy without sacrificing environmental gains.
With Canada’s energy mix essentially unchanged since the mid-1990s, the Fraser Institute report is likely to fuel further debate on both sides of that divide over whether current policy is working, or whether an entirely different approach is needed.
