Canada’s climate and energy policy underwent a new development last week with Alberta’s announcement that it will formally pursue a new pipeline to the northern coast of British Columbia through the federal Major Projects Office, which is designed to streamline regulatory reviews of large resource projects in Canada. Alberta is positioning the project as a once-in-a-generation opportunity to unlock economic growth, but it raises familiar debates: environmental risks, provincial–federal friction, and questions around whether the private sector is ready to invest.
At the same time, Ottawa is preparing to strengthen the backbone of its climate policy—industrial carbon pricing. Prime Minister Mark Carney has signaled that a more robust system will be central to his competitiveness agenda. Yet, it must do so without increasing tensions with Alberta or stalling energy development, which remains central to Canada’s economy. Weak policy coordination has already created uncertainty for industry, which means Canada risks losing ground on the very investments that would diversify its economy.
These two developments, Alberta seeking to expand its energy export capacity and Ottawa looking to tighten carbon markets, may seem at odds. In reality, reconciling these goals is important for alignment on Canada’s approach to the energy transition. For Alberta, credible and durable carbon market signals are critical to ensuring that major projects like carbon capture and storage move ahead. For Ottawa, the task is to demonstrate that climate ambition can coexist with energy development, rather than working against it.
Well-designed carbon markets can provide that bridge. By sending clear price signals, they incentivize large-scale decarbonization investments in the energy sector, while giving Alberta confidence that its economic interests are acknowledged and represented. A policy package that ties energy growth to stronger carbon markets, potentially through tools like carbon contracts for difference, could provide further support. Carney has already signaled a willingness to balance climate and energy priorities—for example, setting aside a sector-wide oil and gas emissions cap, provided the industry moves forward aggressively with carbon capture and other decarbonization technologies. In practice, a similar emissions reduction outcome could be achieved through a tightened industrial emitter program, while avoiding the symbolic and political tensions of a hard cap.
Stronger alignment between Ottawa and Alberta could reverse the trend of fragmented policies and regulatory uncertainty, unlocking new investment while stabilizing Canada’s energy sector. The result goes beyond a specific pipeline or project; it’s whether Canada can deliver a policy environment that investors and companies see as predictable, investable, and globally competitive.ClearBlue Markets is closely following these developments and will continue to provide updates as needed.