Canada and Alberta Reach Landmark Energy and Emissions Agreement
New Canada Alberta agreement targets cleaner energy, expanded exports, and major infrastructure growth
CALGARY — Prime Minister Mark Carney and Alberta Premier Danielle Smith have announced a sweeping implementation agreement aimed at expanding Canada’s energy exports, strengthening carbon markets, modernizing electricity infrastructure, and accelerating major national projects.
The agreement builds on a memorandum of understanding signed by Canada and Alberta in November 2025 and forms part of the federal government’s broader push to diversify exports, reduce emissions, and strengthen Canada’s long-term economic competitiveness.
According to the Prime Minister’s Office, the agreement combines emissions-reduction measures with expanded energy development and infrastructure investments.
Carbon pricing and emissions reduction measures
A major component of the agreement focuses on reforming Alberta’s industrial carbon pricing framework.
Canada and Alberta agreed to:
- Establish an effective carbon price of $130 per tonne by 2040
- Reach benchmark prices of $115 per tonne by 2030 and $130 by 2035
- Increase the headline carbon price to $140 per tonne by 2040
- Strengthen Alberta’s Technology Innovation and Emissions Reduction (TIER) system through tighter emissions benchmarks
Today’s agreement between Canada and Alberta will diversify our exports, reduce our emissions, and give investors the certainty they need to build.
Together, we’re building a stronger, more prosperous, and more sustainable future for all. pic.twitter.com/34nzKeqNNi
— Mark Carney (@MarkJCarney) May 15, 2026
The agreement also introduces a minimum floor price for TIER credits beginning in 2030 to stabilize Alberta’s carbon credit market.
In addition, both governments will jointly issue 75 million tonnes of Carbon Contracts for Difference (CFDs) to support emissions-reduction projects and provide investment certainty for industry.
Federal officials say the measures are intended to help Alberta remain competitive while maintaining Canada’s path toward net-zero emissions by 2050.
Expanding electricity infrastructure
The agreement also aligns with the federal government’s forthcoming National Electricity Strategy, which aims to double Canada’s electricity grid capacity by 2050.
Canada and Alberta committed to:
- Expanding nuclear, wind, solar, geothermal, and lower-carbon electricity generation
- Launching a joint Electricity Working Group
- Improving grid stability and transmission systems
- Supporting electricity demand growth tied to artificial intelligence and data centres
The federal government also confirmed plans to support additional electricity transmission investments through the Clean Electricity Investment Tax Credit.
Pipeline proposal aimed at Asian markets
The agreement includes plans to advance a new bitumen pipeline proposal designed to transport at least one million barrels of low-emission Alberta bitumen per day to Asian markets.
Under the agreement:
- Alberta will submit a formal pipeline proposal to the Major Projects Office by July 1, 2026
- The federal government will consider national interest designation under the Building Canada Act by October 1, 2026
- Indigenous consultation requirements will remain part of the approval process
Officials said the project would be linked to the proposed Pathways Project carbon capture initiative, which aims to reduce emissions by 16 million tonnes annually while generating billions in economic activity.
The Pathways Project is projected to support:
- Up to 43,000 jobs annually
- $16.5 billion in GDP
- $12.2 billion in labour income
Major projects and economic diversification
The announcement builds on previous federal-provincial agreements aimed at streamlining project approvals under a “one project, one review” approach.
The federal government says the Major Projects Office is currently supporting 22 projects and strategies across:
- LNG
- Nuclear energy
- Critical minerals
- Transportation infrastructure
Together, those initiatives represent more than $126 billion in potential investment.
Prime Minister Carney described the agreement as part of a broader effort to create a stronger and more resilient Canadian economy while reducing barriers to development.
Premier Smith said the agreement sends a signal that Alberta is prepared to expand market access and accelerate investment in energy infrastructure.
Source: Prime Minister’s Office (pm.gc.ca)
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