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<\/p>\nA new pipeline agreement between Alberta and Ottawa could trigger a race to the bottom in Canada\u2019s climate policies, advocates said Thursday, warning the deal would invite other provinces to make copycat demands. \u00a0<\/p>\n
While Thursday\u2019s deal saw Alberta agree to strengthen its industrial carbon price, it also came with several carveouts. The deal proposed extending the timeline for cutting highly polluting methane emissions and suspending clean electricity rules \u2014 but only for that province.\u00a0<\/p>\n
YouTube: PM Mark Carney speaks with reporters after signing energy MOU with Alberta<\/p>\n
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The head of the Canadian Climate Institute said political carveouts are a short-sighted compromise that will increase emissions of planet-warming gases and invite provinces to ask for their own special treatment.<\/p>\n
\u201cThat could trigger a race to the bottom,\u201d the institute\u2019s president, Rick Smith, said in a statement.\u00a0<\/p>\n
Pipeline deal triggers harsh reaction from some<\/p>\n
There\u2019s no pipeline on the table, but Thursday\u2019s memorandum of understanding commits both the federal government and the province of Alberta to work toward building one to the West Coast.\u00a0<\/p>\n
Talk of a new pipeline incensed British Columbia\u2019s premier, who said he was not part of the discussion, and raised broader questions about how building new oil infrastructure would be compatible with global efforts to transition away from fossil fuels.\u00a0<\/p>\n
YouTube: B.C. Premier David Eby reacts to Ottawa-Alberta energy deal\u00a0<\/p>\n
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It also prompted the resignation from cabinet of Culture Minister Steven Guilbeault, a former environment minister and an architect of several climate policies put forward by former Liberal prime minister Justin Trudeau\u2019s government, including the clean electricity regulations.\u00a0<\/p>\n
Carney defends deal <\/p>\n
Prime Minister Mark Carney said the deal would help Canada diversify its exports, strengthen the economy, and advance carbon capture projects.\u00a0<\/p>\n
Those projects can help reduce emissions associated with oil production, but they don\u2019t address the much larger share of emissions from downstream oil combustion \u2014 for example, powering cars.\u00a0<\/p>\n
Environmentalists worry about province-by-province deals<\/p>\n
There had been expectations earlier this week that Thursday\u2019s support for a pipeline would be paired with a reset on climate policy with Alberta. But the deal instead appeared to open the door to province-by-province renegotiation, said Chris Severson-Baker, president of the Pembina Institute, an energy transition think tank.\u00a0<\/p>\n
The agreement included a provision to scrap a proposed emissions cap on the oil and gas industry, which accounts for one-third of the country\u2019s greenhouse gas pollution. It also pushed back by five years, to 2035, a proposed 75 per cent cut to Alberta\u2019s oil and gas industry methane emissions.\u00a0<\/p>\n
And the MOU would see Alberta exempted from clean electricity regulations in exchange for strengthening its industrial carbon price.\u00a0<\/p>\n
YouTube: Alberta\u2019s Danielle Smith addresses industry after signing federal-provincial energy deal<\/p>\n
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\u201cIt is now very unclear how Alberta will avoid locking in an expensive, outdated, high-emitting electricity grid that will limit its economic potential and keep bills high for Albertans,\u201d said Severson-Baker.\u00a0<\/p>\n
The clean electricity regulations, which are to come into effect in 2035, would set limits on emissions from power generation using fossil fuels.\u00a0<\/p>\n
Alberta, with a grid that is predominantly powered by natural gas and keen on boosting investment in energy-hungry data centres, has long been critical of the regulations.\u00a0<\/p>\n
But that province is not alone, underlining concerns about copycat demands that could come from other provinces, including Saskatchewan and Ontario.\u00a0<\/p>\n
Premier Doug Ford said Thursday he was hopeful Ontario would get the same exemption as Alberta.\u00a0<\/p>\n
\u201cHopefully we get treated fairly across the board,\u201d he said.\u00a0<\/p>\n
Alberta to increase carbon price <\/p>\n
While the proposed concessions on methane and clean electricity regulations were widely panned in climate circles, many groups paired that skepticism with support for Alberta\u2019s commitment to boost its industrial carbon price.\u00a0<\/p>\n
Alberta, which previously said it would freeze the price at $95 per tonne next year, now says it will eventually raise it to $130.\u00a0<\/p>\n
There\u2019s no timeline for that ramp-up, and no guarantee that Alberta will match the federal government\u2019s target of $170 per tonne by 2030. The MOU set April 1 as the target for a carbon price deal.\u00a0<\/p>\n
YouTube: PM Mark Carney and Alberta Premier Danielle Smith sign energy framework\u00a0<\/p>\n
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Industrial carbon prices are among the most effective emissions reduction policies because they incentivize companies to cut emissions while giving low-carbon companies a boost. Companies that emit above a benchmark can either pay the carbon price or buy credits from those who stay below it.<\/p>\n
But Alberta\u2019s carbon market has slumped. Credits were trading at around $25 earlier this year, well below a $95 benchmark, S&P Global reported. Companies had banked an estimated three years\u2019 worth of carbon credits, which collapsed demand for new credits and weakened the incentive to cut emissions, the financial research firm said.\u00a0<\/p>\n
This report by The Canadian Press was first published Nov. 27, 2025.\u00a0<\/p>\n
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