Canada’s Prime Minister Mark Carney signed an agreement with Alberta’s premier on Thursday that rolls 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, 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.
Carney is counting on the energy sector to help the Canadian economy weather uncertainty from US President Donald Trump’s tariffs, and is seeking to diversify from the US market which currently takes 90 per cent of Canada’s oil exports.
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In remarks at an industry event in Calgary, Carney said US tariffs and the resulting uncertainty will wipe US$50 billion from Canada’s economy, the equivalent of US$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.
It was first reported in September that Carney’s government was in discussions with Alberta Premier Danielle Smith on a potential deal to eliminate the emissions cap.