Canada and Alberta reached a new agreement Friday that targets stronger carbon markets, cleaner electricity expansion, and increased energy exports to Asian markets, the Prime Minister's office said in a release.
Prime Minister Mark Carney and Alberta Premier Danielle Smith announced the implementation agreement as part of broader plans to strengthen Canada's economy and diversify exports.
The agreement follows a memorandum signed in November that focused on expanding Alberta's energy sector, increasing renewable investment, and lowering emissions through cooperative policies.
Canada and Alberta agreed to raise the effective carbon price to CA$115 ($83.59) per ton by 2030, CA$130 by 2035, and CA$140 by 2040.
Under the Technology Innovation and Emissions Reduction system, Alberta also agreed to tighten emissions benchmarks gradually while introducing a minimum floor price for TIER credits beginning in 2030.
The federal and Alberta governments will jointly issue 75 million tons of Carbon Contracts for Difference to support emissions-reduction projects, with costs shared equally.
Canada and Alberta also agreed to work toward doubling Alberta's electricity grid by 2050 through expanded nuclear, wind, solar, and geothermal generation, as well as lower-carbon generation capacity.
The two partners will launch a joint Electricity Working Group focused on grid modernization, energy storage, transmission expansion, and support for artificial intelligence and data center demand.
To expand energy exports, Alberta plans to submit a proposal for a new bitumen pipeline to Asian markets to Canada's Major Projects Office by July 1, 2026.
Canada will seek national interest designation for the project under the Building Canada Act by Oct. 1, 2026, while continuing consultations with Indigenous communities and British Columbia.
The proposed pipeline depends on the Pathways Project, which Canada and Alberta said could cut annual emissions by 16 million tons while generating CA$16.5 billion in gross domestic product.
The project will also generate CA$12.2 billion in labor income while supporting as many as 43,000 jobs annually.
Large oil sands producers will also need to cut carbon intensity by 2% annually through emissions reductions, carbon credits, or direct carbon payments under the agreement, Bloomberg reported.
The governments also reaffirmed plans to finalize a methane equivalency agreement by late 2026, aiming to reduce Alberta oil and gas methane emissions by 75% below 2014 levels by 2035.
Prime Minister Mark Carney said Friday, "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."