On November 27, 2025, Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a Memorandum of Understanding. The five-page document signals their governments’ willingness to put years of acrimony behind them, and to negotiate agreements on the future of energy and climate policies and projects.
The agreements are to be signed on April 1, 2026, including a trilateral agreement with the Pathways Alliance, a group of corporations who produce oil from the oilsands, and that have been pledging for the last several years to build a jointly operated carbon capture and storage hub in Alberta.
The MOU covers many topics, from pipelines to carbon capture to electrical interties and carbon pricing. Many of the policy issues up for negotiation have far-reaching consequences that can be difficult to parse out of the technical details. Nevertheless, if the two governments can achieve a good outcome through these talks, it represents an incredibly important opportunity to get Alberta on a path to a more prosperous future that is better aligned with global trends around rapidly growing low-carbon industries, and to meaningfully reduce Canada’s emissions by putting its highest-polluting province on a different trajectory.
The prime minister has said that addressing climate change isn’t just a moral duty, it’s an economic imperative. We agree – delaying or diluting Canada’s climate response will cause long-term damage to our ability to compete in the global economy.
While there are opportunities to reach an even better result, there are four specific must-have pieces that are the difference between the MOU being the foundation on which successful climate policy in Canada is built, or the beginning of its unravelling.
1. An effective carbon price of $130 by 2030
This is the most important piece; carbon credits must be trading at the agreed-upon $130 per tonne price, no later than 2030. Any delay in reaching $130 means it will be harder for Canadian businesses to invest in emissions reduction and being climate competitive.
2. Any new rules in Alberta must not create unfairness for industry elsewhere in Canada
The MOU suggests Alberta is going to get a special deal on methane rules and a special deal on clean electricity, but that would be unfair for businesses across Canada. Companies should get broadly similar treatment across Canada – whether they’re fixing methane leaks at oil and gas wells or trying to build low-cost renewable energy projects. Alberta must show it will still achieve the same emissions outcomes, on the same timeframes as the rest of the country, so companies can confidently plan.
3. The oilsands companies must immediately put money on the table for their Pathways Alliance carbon capture project.
Industry has been talking about this project for years, and it’s time for them to make good on it. This project is not a silver bullet, but it’s an important tool to reduce oilsands emissions. Taxpayers will already be paying for two-thirds of Pathways through very generous tax credits. These very profitable companies must now show their commitment by allocating the funds.
4. No taxpayer money for another pipeline
Either an oil pipeline is a good business idea, or it’s not. If it is a good idea, then the private sector should be happy to invest in it. If they won’t invest, then it’s a bad idea and taxpayers shouldn’t be asked to pay for it.
