The consequences of Canada’s climate backslide

With Canada in the throes of an about-face on climate policies, advocates say the shift could jeopardize the viability of Canada’s climate agenda. 

The federal government’s recent memorandum of understanding with Alberta included a deal to build a new crude oil pipeline, suspend clean electricity regulations in the province, and scrap the cap on oil and gas emissions. 

This comes after a slew of policies that reverse Canada’s previous climate commitments, including the consumer carbon price, anti-greenwashing legislation, and measures aimed at supporting household electrification, such as the Canada Greener Homes Loan Program. 

The MOU states that Canada and Alberta remain committed to achieving net zero by 2050, while also improving consumer affordability, economic competitiveness and long-term competitive certainty. However, advocates say the agreement has far-reaching implications for Canada’s climate future. 

“The government seems to be taking out a mortgage on future generations to pay for the crisis today,” says David Wright, an associate professor at the University of Calgary’s Faculty of Law. 

“It seems like the economy is taking significant priority over the environment.”

‘B.C. is the clear loser’

The MOU’s marquee item, a commitment to a crude oil pipeline to the north coast of British Columbia, was immediately criticized by Coastal First Nations and civil society groups in the province. The pipeline would allow production and transit of at least a million barrels of oil a day across B.C., and would potentially involve an ‘appropriate adjustment’ of BC’s Oil Tanker Moratorium Act.

“B.C. looks like it's just been abandoned in this entire endeavour,” says Anna Johnston, a staff lawyer with West Coast Environmental Law. 

While Canada is taking a hit, “B.C. is the clear loser in all of this.”

The MOU commits to fast-tracking the pipeline through the Building Canada Act. The combination of the potential inclusion of the pipeline on the list of major projects and the ambitious timeline for completing the pipeline raises a “real live legal question,” regarding Indigenous rights, she says. 

The agreement outlines a timeline for Alberta to submit a pipeline project to the Major Projects Office by July 1, 2026, stipulating a maximum of two years for permitting and approvals. The pipeline is contingent upon the Pathways Project (for carbon capture and utilization), which is scheduled to be constructed simultaneously, starting in 2027. But adequately consulting Indigenous rights-holders can’t be done that quickly, Johnston says. 

It’s also unclear how a pipeline project fast-tracked by Bill C-5, which allows projects to be approved before a review takes place, would facilitate genuine consultation. Meanwhile, there is no mention of Indigenous consent in the MOU.  

“It is incredibly fraught with potential for successful legal challenge by Indigenous rights-holders.”

Wright says the federal government appears to be taking a position with the MOU that there’s no consultation obligation at this stage. While that may be true in a narrow sense, there are also considerations such as the work of reconciliation, the treaty context, and Canada’s commitment to implementing the United Nations Declaration on the Rights of Indigenous Peoples. 

“All of that suggests that this is not how you do it.” 

The Assembly of First Nations chiefs voted unanimously to demand the withdrawal of the pipeline deal. 

A potentially fatal undermining

While much of the initial reaction to the MOU focused on the pipeline, the consequences for Canada’s clean electricity regulations are equally severe, says Charlie Hatt, the climate change program director with Ecojustice. 

“The MOU basically undermines, potentially fatally, the clean electricity regulations,” he says. 

“This is a major change that was not expected because, to the extent the Carney government was on the record about the clean electricity regulations, it was supportive of them.”

The regulations were meant to transition the country’s electrical grid to net-zero by 2050, making them the foundation of successful decarbonization in Canada, Hatt says. 

“First you get to a net zero electricity system…and then you use that to electrify other sectors of the economy.”

Nonetheless, the regulations were controversial. In the spring, the Alberta government filed a lawsuit against the federal government, alleging that they were an unconstitutional federal exercise of legislative jurisdiction. 

The MOU suspended the clean electricity regulations in Alberta, where they were expected to have an effect equivalent to taking 49 million cars off the road, and replaced them with a carbon pricing system, initially set at $130/tonne.  

Carbon pricing, however, often isn’t sufficient to reduce emissions. By swapping the regulations for the carbon price, Hatt says the federal government traded mandatory lower emissions for a tool that doesn’t guarantee an outcome. 

It's also unclear what mechanism the federal government will use to exempt Alberta. While it appears to be an equivalency agreement, that language is not used in the MOU, raising a question about whether the government is contemplating a change to the Canadian Environmental Protection Act to add a new mechanism for granting an exemption.

Either way, this has the potential to have ripple effects beyond Alberta. Already, federal Energy Minister Tim Hodgson has said he’s open to negotiating exemptions with other provinces. Hatt says this creates uncertainty in climate regulations. 

“Essentially, the federal government has opened the door to any provincial government that relies heavily on polluting fossil fuels, like natural gas, to generate electricity, to come and try to make a deal with the federal government.”

Meeting climate targets now ‘impossible’

Wright says while it’s reasonable to suspect that the federal government’s recent policies could derail Canada’s progress on emissions reductions, it’s too soon to say for sure. As a priority, he says, the federal government needs to transparently refresh its greenhouse gas emissions accounting.

Under the Canada Net-Zero Emissions Accountability Act, the federal government is required to prepare detailed emissions reduction plans and reports on them. The most recent plan, issued in 2023, suggested Canada was more or less on track to meet its Paris Agreement commitments. That said, a recent report from the Canadian Climate Institute suggested Canada would not meet its interim 2030 target. 

The next report is due to be released by the end of the month, giving civil society groups and think tanks an opportunity to review the government’s accounting, Wright says.

Wright also noted it’s “very conspicuous” that the MOU doesn’t contain any commitments from Alberta to reduce emissions before 2050, despite climate science having established that emissions reductions need to be underway already and ramp up quickly. 

Ultimately, this failure will have consequences for the whole country. 

“That is going to put Canada in a hard position to meet its nearer-term Paris agreement targets, most notably 2030 and 2035.”

Steven Guilbeault, an environment minister in the Trudeau government, resigned from Prime Minister Mark Carney’s cabinet over the MOU and a “profound” disagreement in climate policy. He says Canada’s position is now beyond hard — meeting our climate targets is “impossible” at this point.

“I think that my government needs to be honest with Canadians,” he recently told CTV's Power Play.

“With the rollbacks that we’ve seen over the past few months on different climate change measures that have been adopted over the years by me and some of my predecessors, it is impossible to see how we achieve our 2030 targets.”