Canada and Alberta strike agreement to diversify our exports, reduce emissions, and build a stronger economy

Press Release

May 15, 2026

The world is changing rapidly. In response, Canada’s new government is focused on what we can control: building an affordable, competitive, and sustainable Canadian economy.

To that end, we must build our strength at home and diversify our export markets abroad. To advance these shared missions, in November, Canada and Alberta signed a Memorandum of Understanding (MOU) that unlocks the full potential of Alberta’s energy resources, drives massive new investments in renewable energy, and effectively reduces emissions. The MOU shifts energy and climate policy from rigid regulations to a pragmatic, responsible, and cooperative approach. The MOU is built on practical solutions: stronger, more effective industrial carbon pricing, major private sector investments in clean technologies, and expanded, responsible energy development for the workers and communities who rely on it. It will provide certainty to investors, advance meaningful reconciliation with Indigenous Peoples, and maintain a path to net-zero by 2050.

Delivering on these shared commitments, the Prime Minister, Mark Carney, and the Premier of Alberta, Danielle Smith, today announced that Canada and Alberta have reached a landmark Implementation Agreement to diversify our exports, lower emissions, and build a stronger, more sustainable economy for all. Working together, Canada and Alberta will build:

Carbon markets that work

Canada’s carbon credit markets are not working. An oversupply of low-priced credits has weakened incentives and failed to substantially drive down emissions. Establishing a stronger carbon pricing system in high-emitting economies like Alberta also lays the foundation for a credible, scalable national carbon credit market. To achieve this:

Canada and Alberta have agreed to an effective carbon price of $130 per tonne by 2040.
- This will be achieved by agreed upon annual benchmarks for the headline carbon price, including $115 by 2030 and $130 by 2035.
- The headline carbon price will increase to $140 per tonne by 2040.
- Canada and Alberta have also agreed to annual tightening, or “stringency” rates under the Technology Innovation and Emissions Reduction (TIER) system. These tightening rates will gradually strengthen emissions benchmarks over time.
Alberta has committed to enforcing a minimum floor price for TIER credits beginning in 2030. This is a critical “insurance policy” that will prevent carbon markets from collapsing and will provide a binding price for investment certainty.
Canada and Alberta will jointly issue 75 million tonnes of Carbon Contracts for Difference (CFDs) to support emissions-reduction projects, with costs shared equally between Canada and Alberta.

This is a landmark agreement that provides long-term certainty rooted in consistent, effective increases to the price of carbon emissions in Alberta. With reinforcing carbon market measures such as CFDs, carbon prices will be predictable over time and catalyse investment. Together, these measures will help create the long-term certainty needed to advance major projects, grow Canada’s energy sector, and reach net-zero emissions by 2050.

This agreement creates the potential to expand credible, effective carbon markets across Canada, in close collaboration with provinces and territories.

Affordable, reliable, clean electricity

Further to Canada’s proposed National Electricity Strategy, the federal government will support upgrades to electricity systems across Canada and increase generation – including adding major high-voltage intra-provincial transmission to the Clean Electricity Investment Tax Credit.

In addition, Canada and Alberta agree to:

Work towards doubling the grid by 2050, including by expanding nuclear, wind, solar, geothermal, and lower-carbon forms of generation – while maintaining the overall stability of Alberta’s grid.
Launch a joint Electricity Working Group to identify the projects, technologies, and investments needed to achieve net-zero emissions in Alberta by 2050. This includes measures to support grid stability, modernisation, and services for baseload and intermittent power sources, including renewables, storage, interties, intra-provincial transmission, nuclear, and geothermal.
Better enable investment for renewables and expand supply of electricity for AI and data centre projects.

Electricity is central to Canada’s future and our sustainability. It powers everything we do. By doubling our grid and increasing electrification, Canada’s Electricity Strategy will help ensure Canadians have access to affordable, reliable, and clean electricity as demand continues to grow across the economy.

Diversifying access to global markets

To transport at least one million barrels of low-emission Alberta bitumen a day, increase access to Asian markets, and bolster Canada’s independence and prosperity, the leaders agreed that:

Alberta will submit a comprehensive proposal for a bitumen pipeline to Asian markets to the Major Projects Office by July 1, 2026.
Canada will pursue its designation as a project of national interest, for approval under the Building Canada Act by October 1, 2026, while ensuring that all steps and decisions are fully consistent with its duty to consult Indigenous Peoples and informed by the outcomes of that consultation.
Canada and Alberta agree to continue engaging with British Columbia on the application and any future development and construction, on interties with Alberta, and on other projects of national interest within British Columbia’s jurisdiction.

The pipeline will be dependent on the Pathways Project, the largest carbon capture, utilisation, and storage project in the world. Canada and Alberta reaffirmed their commitment that the project would achieve 16 million tonnes of annual emissions reductions – the equivalent to taking 90% of vehicles off the road in Alberta – while generating $16.5 billion in GDP, $12.2 billion in labour income, and up to 43,000 jobs annually.

Today’s Implementation Agreement delivers on key commitments under the Canada-Alberta MOU and builds on the agreement-in-principle on methane equivalency and the Co-operation Agreement on Environmental and Impact Assessment reached earlier this spring. A methane equivalency agreement, targeting the end of 2026, will lower emissions of methane in the oil and gas sector in Alberta by 75% below 2014 levels by 2035.

Together, we are strengthening carbon markets, building affordable, reliable, and clean electricity, and getting Canada’s energy exports out to global markets. Rooted in cooperative federalism, this is a pragmatic, united approach to achieve our shared ambitions and create greater prosperity for all Albertans and Canadians.

Quotes

“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. We are building a Canada that works with a more prosperous, sustainable, and resilient economy for all.”

— The Rt. Hon. Mark Carney, Prime Minister of Canada

“This agreement sends a clear message to investors and global partners that Canada and Alberta are serious about expanding market access, building major infrastructure, and creating the conditions for long-term investment in our province’s energy sector. Alberta is ready to build, invest, and partner, but we cannot afford to lose another decade. The door is open, and it’s time to turn shared ambition into real projects, jobs, and results for Alberta and Canada.”

The Hon. Danielle Smith, Premier of Alberta

Quick facts

Today’s announcement builds on recent progress by Canada and Alberta as agreed in the MOU signed in November 2025:
- In March 2026, Canada and Alberta reached an agreement-in-principle to bring a “one project, one review” approach to major infrastructure initiatives in Alberta. It will create a more streamlined assessment process that delivers major projects faster, reinforces strong environmental protections, and ensures the rights of Indigenous communities are respected.
- In April 2026, Canada and Alberta signed a Co-operation Agreement on Environmental and Impact Assessment to implement a streamlined and flexible impact assessment process to get major infrastructure built faster.
Through the Major Projects Office (MPO) the Government of Canada is driving tens of billions of dollars in further investments, while creating the conditions for a better connected, more productive, and ambitious country.
- Since its launch in August 2025, the MPO is supporting 22 projects and transformative strategies across nuclear, LNG, critical minerals – such as nickel, graphite, and tungsten – and transportation infrastructure. Together, these projects represent over $126 billion in investments in our economy.