Canada and Alberta Sign Landmark Agreement to Expand Exports, Cut Emissions and Strengthen the Economy

In a major step toward strengthening Canada’s economy, the federal government and the Province of Alberta have signed a landmark implementation agreement aimed at diversifying exports, reducing emissions and accelerating major infrastructure development.

Prime Minister Mark Carney and Alberta Premier Danielle Smith made the announcement in Calgary on May 15, describing the deal as a practical and cooperative approach to unlocking Alberta’s energy potential while advancing Canada’s climate goals.

The agreement follows a Memorandum of Understanding signed in November 2025 and focuses on three key priorities: strengthening carbon markets, expanding clean electricity, and building a new pipeline to transport Alberta bitumen to Asian markets.

Stronger Carbon Markets and Emissions Reduction

Under the agreement, Canada and Alberta will work toward an effective carbon price of $130 per tonne by 2040, with annual benchmarks including $115 by 2030 and $130 by 2035. The headline price will rise to $140 per tonne by 2040.

Alberta has committed to implementing a minimum floor price for Technology Innovation and Emissions Reduction (TIER) credits starting in 2030. This measure is intended to stabilize carbon markets and provide long-term certainty for investors.

Both governments will also jointly issue 75 million tonnes of Carbon Contracts for Difference, with costs shared equally, to support large-scale emissions-reduction projects.

Officials say these measures will help attract private investment, accelerate clean technology development and maintain Canada’s commitment to achieving net-zero emissions by 2050.

Clean Electricity and Grid Expansion

The agreement includes plans to double Alberta’s electricity grid by 2050 through investments in nuclear energy, wind, solar, geothermal and lower-carbon generation.

A joint Electricity Working Group will be established to identify priority projects and technologies needed to modernize the grid and ensure reliable power for homes, industries, artificial intelligence and data centres.

The federal government will also extend clean electricity investment tax credits to major transmission projects within Alberta.

New Pipeline to Asian Markets

A central component of the agreement is Alberta’s proposal to build a new bitumen pipeline capable of transporting at least one million barrels of low-emission oil per day to the West Coast for export to Asia.

Alberta will submit its proposal to the federal Major Projects Office by July 1, 2026. Ottawa will consider designating it as a project of national interest under the Building Canada Act by October 1, 2026, subject to Indigenous consultation and environmental reviews.

The pipeline will be linked to the Pathways Project, a large-scale carbon capture initiative expected to reduce emissions by 16 million tonnes annually while generating $16.5 billion in GDP and supporting up to 43,000 jobs each year.

Leaders Welcome the Agreement

Prime Minister Carney said the deal demonstrates that Canada offers clear rules, streamlined approvals and strong economic opportunities.

“Today’s agreement reinforces that Alberta and Canada are lands where the opportunities are plentiful, the rules are clear, and one project means one review,” Carney said.

Premier Smith said the partnership sends a strong message to investors and international partners that Alberta is ready to build major projects and expand market access.

“Alberta is ready to build, invest, and partner, but we cannot afford to lose another decade,” Smith said.

Building Canada’s Economic Future

The agreement builds on several recent Canada-Alberta initiatives, including streamlined environmental assessments and a forthcoming methane equivalency agreement aimed at cutting oil and gas methane emissions by 75 per cent below 2014 levels by 2035.

Since its launch in August 2025, the federal Major Projects Office has supported 22 projects across sectors such as nuclear energy, LNG, transportation and critical minerals, representing more than $126 billion in potential investment.

Officials say the new Canada-Alberta agreement marks one of the most significant collaborations between the two governments in recent years and positions Alberta as a central driver of Canada’s future prosperity.

Courtesy: Prime Minister of Canada