Memorandum of Understanding (MOU) Agreement Erodes Last Pillar of Canadian Climate Policy
Details of the Canada-Alberta implementation plan allow for a minimum carbon price of just CAD 110 in 2040—far below the CAD 130 advertised, and far too late to meet climate commitments.
The governments of Canada and Alberta have announced new details on an oil pipeline while significantly weakening the industrial carbon price. This follows yesterday’s proposed diminishing of clean electricity regulations and a proposal to hollow out federal impact assessments. Doubling down on oil and gas while much of the world is transitioning away from fossil fuels sets Canada on a path toward greater economic risk and worsening climate impacts.
As oil and gas supply disruptions accelerate the global energy transition, Canada is abandoning its commitment to strengthen the industrial carbon pricing system. This week’s announcements show a clear trajectory: dismantling policies that protect human and planetary health to facilitate more oil and gas production in Canada.
By lowering the headline price and committing to a price floor of just CAD 110 per tonne by 2040, the MOU implementation agreement significantly weakens industrial carbon pricing—and risks no longer delivering on its intended purpose. Taken together with the commitments to build another bitumen pipeline, expand LNG export facilities, and increase the role of natural gas power generation, the federal government is walking away from its commitments to climate action. This risks creating more stranded assets, energy-driven inflation, and worsening climate costs for people across Canada.
At the same time, Canada risks falling behind in the global race to clean, affordable, and stable energy—missing out on huge investment opportunities, jobs, and cost savings for decades to come.
This agreement is knocking down the last pillar in Canada’s climate policy, creating unnecessary economic, environmental, and health risks for its people. As oil and gas supply disruptions accelerate the global energy transition, Canada is moving backward.
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