Canada’s prime minister Mark Carney has signed an agreement with Alberta’s premier that rolls back national climate rules in order to support increased investment in fossil fuel production.
The agreement, finalised on Thursday, will enable the construction of a new pipeline designed to move millions of barrels of oil to Canada’s west coast, with the aim of boosting exports to Asia. As part of the deal, Canada will scrap a planned emissions cap on the oil and gas sector and drop proposed clean electricity regulations, in exchange for new commitments from the country’s largest oil-producing province. These include strengthening industrial carbon pricing and supporting a carbon capture and storage project.
The deal has been welcomed by the oil industry but has attracted criticism from environmental groups, who argue the changes mark a significant retreat from Canada’s climate commitments.
Steven Guilbeault, environment minister under Carney’s predecessor Justin Trudeau, announced that he was leaving the cabinet due to concerns that the country’s climate strategy was being abandoned.
Carney is looking to the energy sector to support Canada’s economy amid uncertainty caused by President Donald Trump’s tariffs. He is also seeking to reduce reliance on the United States, which currently accounts for 90% of Canada’s oil exports.
Environmental organisations have condemned the agreement, citing its implications for Canada’s ability to tackle climate change, while oil producers have expressed support.
Pembina Institute, a clean-energy think-tank, said: “With this agreement, the federal government risks doing significant damage to minimum national standards that will have broader impacts on Canada’s climate change efforts.”
The Canadian Association of Petroleum Producers said: “The elimination of the emissions cap, changes to the Competition Act, and the commitment to work together on new market access are all significant steps towards unlocking Canada’s vast natural energy resources.”
Liz McDowell, senior campaigns director at StandEarth said: “This dirty tar sands pipeline is a pipe dream. Prime Minister Carney is delusional if he thinks he can gleefully expand oil and gas without fierce opposition at home and maintain our reputation on the world stage. As he plans one of the most voracious oil and gas expansions on the planet, this MOU darkens the stain already on our national climate commitments. Growing a sector that’s already responsible for 30% of this country’s pollution instead of investing in genuine nation-building projects like wind energy or a coast-to-coast electricity grid is short-sighted and will hurt us economically.”
She added: “For decades First Nations and British Columbians have been clear: we don’t want oil tankers or crude oil pipelines on the north coast. Our voices made sure the Northern Gateway pipeline was rejected by the courts, when hundreds of thousands of Canadians appeared in front of the National Energy Board, marched in the streets, and organised to stop the last prime minister who thought this was a good idea. This is the wall of opposition Carney will meet if he tries to force this project on people who have repeatedly said no.”
Adam Scott, executive director of Shift, wrote on LinkedIn: “Many in the climate community have tried to give the Carney government some benefit of the doubt in a difficult moment. But that ended today. Carney has finally burnt his remaining international climate reputation, broke his May election platform promises, and set back Canada’s climate policy for yet another generation.”