Prime Minister Mark Carney and Alberta Premier Danielle Smith signed the Implementation Agreement for the Canada-Alberta Memorandum of Understanding of November 27, 2025, on May 15, 2026 in Ottawa. [livestream]
Tuesday May 19, 2026 | CALGARY, BC
by Mary P Brooke | Island Social Trends
A signing ceremony between Prime Minister Mark Carney and Alberta Premier Danielle Smith on Friday in Calgary produced a number of responses across the political spectrum.
The Implementation Agreement they signed on May 15, 2026 was billed as “an agreement to strengthen energy collaboration and build a stronger, more competitive and more sustainable economy”.
Prime Minister Mark Carney and Alberta Premier Danielle Smith signed the Implementation Agreement for the Canada-Alberta Memorandum of Understanding of November 27, 2025, on May 15, 2026 in Ottawa. [livestream]
“The goal is to diversify our exports, reduce emissions, and build a stronger economy,” it is stated in the prime minister’s statement.
Big strides in new directions:
The objectives and projects identified in the MOU remain critical to the future prosperity and energy security of both Canada and Alberta. Both governments remain committed to the shared priorities of:
establishing and enabling Canada as a global energy leader;
unlocking the growth potential of Alberta’s oil, gas and other resources, including an oil pipeline to Canada’s west coast; and
working toward Canada’s net-zero greenhouse gas emissions objective by 2050.
Canada and Alberta set out the following additional commitments with respect to:
carbon markets;
electricity;
the Pathways Project;
an oil pipeline to global markets; and
continuing cooperation.
This takes the energy sector in new robust directions — stretching out the timeline to apply higher rates to carbon emissions in order to foster investment interest in developing the oil resource sector.
This does not seem to be unaware of the climate impact challenge but more so an urgent push for economic strength and protection of Canada’s sovereignty — a strong theme on Carney’s part that Canadians are now becoming quite familiar with.
Carbon market:
The federal government says that Canada’s carbon credit markets are not working.
An oversupply of low-priced credits has weakened incentives and failed to substantially drive down emissions. Establishing a stronger carbon pricing system in high-emitting economies like Alberta also lays the foundation for a credible, scalable national carbon credit market.
Alberta Premier Danielle Smith addressed media after signing the MOU implementation agreement with the prime minister, May 15, 2026 in Calgary. [livestream]
To achieve this:
Canada and Alberta have agreed to an effective carbon price of $130 per tonne by 2040.
This will be achieved by agreed upon annual benchmarks for the headline carbon price, including $115 by 2030 and $130 by 2035.
The headline carbon price will increase to $140 per tonne by 2040.
Canada and Alberta have also agreed to annual tightening, or “stringency” rates under the Technology Innovation and Emissions Reduction (TIER) system. These tightening rates will gradually strengthen emissions benchmarks over time.
Alberta has committed to enforcing a minimum floor price for TIER credits beginning in 2030. This is a critical “insurance policy” that will prevent carbon markets from collapsing and will provide a binding price for investment certainty.
Canada and Alberta will jointly issue 75 million tonnes of Carbon Contracts for Difference (CFDs) to support emissions-reduction projects, with costs shared equally between Canada and Alberta.
Electricity is key:
Affordable, reliable, and clean electricity was a highlight of the announcement.
Further to Canada’s proposed National Electricity Strategy, the federal government will support upgrades to electricity systems across Canada and increase generation – including adding major high-voltage intra-provincial transmission to the Clean Electricity Investment Tax Credit.
Prime Minister Mark Carney addressed media after signing the MOU implementation agreement with Alberta’s premier, May 15, 2026 in Calgary. [livestream]
In addition, Canada and Alberta agree to:
Work towards doubling the grid by 2050, including by expanding nuclear, wind, solar, geothermal, and lower-carbon forms of generation – while maintaining the overall stability of Alberta’s grid.
Launch a joint Electricity Working Group to identify the projects, technologies, and investments needed to achieve net-zero emissions in Alberta by 2050. This includes measures to support grid stability, modernisation, and services for baseload and intermittent power sources, including renewables, storage, interties, intra-provincial transmission, nuclear, and geothermal.
Better enable investment for renewables and expand supply of electricity for AI and data centre projects.
“Electricity is central to Canada’s future and our sustainability. It powers everything we do. By doubling our grid and increasing electrification, Canada’s Electricity Strategy will help ensure Canadians have access to affordable, reliable, and clean electricity as demand continues to grow across the economy,” it was stated in the prime minister’s statement on May 15.
The need for electrification:
On the previous day, Carney announced what is clearly an exciting prospect for him — the National Electricity Strategy to create east-west inter-ties in the hydroelectric capacity of the provinces, and also take electricity north.
Prime Minister Mark Carney announces the National Electricity Strategy on May 14, 2026 in Ottawa. [livestream]
Electricity is clearly the key need for expansion of industrial growth and the overall economy, including the demands that will come through a massive expansion of artificial intelligence using high-tech data centres.
The federal national electricity strategy aims to double the capacity of Canada’s electricity grid by 2050.
Electricity demand is increasing with modern technologies in use by Canadians in all aspects of modern living. The new national strategy includes a goal to see lower energy bills for some Canadian households.
Diversifying access to global markets:
To transport at least one million barrels of low-emission Alberta bitumen a day, increase access to Asian markets, and bolster Canada’s independence and prosperity, Carney and Smith agreed that:
Alberta will submit a comprehensive proposal for a bitumen pipeline to Asian markets to the Major Projects Office by July 1, 2026.
Canada will pursue its designation as a project of national interest, for approval under the Building Canada Act by October 1, 2026, while ensuring that all steps and decisions are fully consistent with its duty to consult Indigenous Peoples and informed by the outcomes of that consultation.
Canada and Alberta agree to continue engaging with British Columbia on the application and any future development and construction, on interties with Alberta, and on other projects of national interest within British Columbia’s jurisdiction.
The pipeline will be dependent on the Pathways Project, the largest carbon capture, utilization, and storage project in the world. Canada and Alberta reaffirmed their commitment that the project would achieve 16 million tonnes of annual emissions reductions – the equivalent to taking 90% of vehicles off the road in Alberta – while generating $16.5 billion in GDP, $12.2 billion in labour income, and up to 43,000 jobs annually.
Conservative comment:
Conservative Leader Pierre Poilievre issued a statement on Friday saying his party is in favour of a pipeline but without a carbon tax.
Polievre — who now represents an Alberta riding (having lost his Ottawa seat in the 2025 election) — said that “after 11 years of Liberal anti-resource development policies” that Premier Smith is “working to minimize the damage federal policies are doing to her province”.
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NDP reaction:
The NDP reaction to the Carney-Smith energy announcement is that it “marks the Carney government’s official surrender to the oil and gas lobby”.
“We now have a federal government that no longer even pretends to rein in big corporate polluters,” said NDP Leader Avi Lewis in a statement on May 15.
Lewis also criticizes the May 14 release of the government’s clean electricity strategy as “a transparent attempt to distract from this latest capitulation to the fossil fuel industry – and it’s not even a ‘clean’ electricity strategy worthy of the name when it opens the door to more high-emission gas plants”.
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