In its deal with Alberta, Canada will scrap emissions cap on the oil and gas sector, among other moves.
Published On 27 Nov 2025
Canada’s Prime Minister Mark Carney has signed an agreement with Alberta’s premier that will roll back certain climate rules to spur investment in energy production, while encouraging construction of a new oil pipeline to the West Coast.
Under the agreement, which was signed on Thursday, the federal government will scrap a planned emissions cap on the oil and gas sector and drop rules on clean electricity in exchange for a commitment by Canada’s top oil-producing province to strengthen industrial carbon pricing and support a carbon capture-and-storage project.
Recommended Stories
list of 3 items
- list 1 of 3Russia’s ‘shadow vessels’ using false flags to skirt sanctions, report says
- list 2 of 3Venezuela suspends flight rights for six foreign airlines amid US tensions
- list 3 of 3Thanksgiving: A story of celebration and pain, in maps
end of list
The deal, which was hailed by the country’s oil industry but panned by environmentalists, signaled a shift in Canada’s energy policy in favour of fossil fuel development and is already creating tensions within Carney’s minority government.
Steven Guilbeault, who served as environment minister under Carney’s predecessor Justin Trudeau, said he was quitting the cabinet over concerns that Canada’s climate plan was being dismantled.
Carney is counting on the energy sector to help the Canadian economy weather uncertainty from United States President Donald Trump’s tariffs, and is seeking to diversify from the US market, which currently takes 90 percent of Canada’s oil exports.
In remarks at an industry event in Calgary, Carney said US tariffs and the resulting uncertainty will wipe $50bn from Canada’s economy, the equivalent of $1,300 for every Canadian, stressing the need to build projects that can spur growth and reduce US reliance.
He has relaxed some environmental restrictions implemented by his predecessor, Justin Trudeau, while reaffirming his commitment to net-zero carbon emissions by 2050.
New markets
Alberta is also exploring the feasibility of a new crude oil pipeline to British Columbia’s northwest coast in order to increase exports to Asia, but no private-sector company has committed to building a new pipeline.
Pipeline companies and the Alberta government have repeatedly said significant federal leg