Canada & Alberta sign landmark agreement to advance energy, emissions reduction & Indigenous participation

On November 27, 2025, the Government of Canada (Canada) and the Government of Alberta (Alberta) signed a Memorandum of Understanding (MOU), setting out a framework for enhanced energy collaboration, regulatory reform and Indigenous partnership. The MOU, announced by Prime Minister Mark Carney and Premier Danielle Smith, aims to position Canada as a global energy superpower while advancing net-zero greenhouse gas emissions by 2050.

Central to the MOU is the commitment to increase Alberta’s oil and gas production to meet Canada’s export and national security needs, while simultaneously reducing the emissions intensity of heavy oil production to achieve “best in class” standards by 2050.

Objectives

The MOU sets out a series of objectives aimed at transforming Canada’s energy landscape and advancing net-zero goals:

• Expanding electrical generation capacity for both consumer and industrial use, including the growing demands of artificial intelligence (AI) data centres, with a target of net-zero greenhouse gas emissions for Alberta’s electricity sector by 2050.
• Developing energy policies that address affordability, grid stability and economic certainty, with an aim to attracting investment and ensuring long-term competitiveness.
• Advancing regulatory reform, with both Canada and Alberta pledging to reduce duplication and streamline approval processes, aiming for a maximum two-year timeframe for approving major projects.
• Prioritizing meaningful engagement with Indigenous Peoples, including involving Indigenous rightsholders in the consultation process, respect for Aboriginal and Treaty rights and opportunities for Indigenous ownership and economic participation in major projects.

Projects

The MOU also sets out a series of major projects designed to advance the objectives identified above.

Major projects contemplated by the MOU include the construction of new private sector pipelines, with Indigenous co-ownership and economic benefits, aimed at exporting at least one million barrels per day of low-emission Alberta bitumen with a route that increases export access to Asian markets. This initiative is complemented by the planned expansion of the Trans Mountain pipeline by 300,000 to 400,000 barrels per day intended for export to Asia.

The MOU also calls for the development of Pathways, the world’s largest carbon capture, utilization and storage (CCUS) project, which will position Alberta oil among the lowest carbon intensity barrels globally.

Lastly, the MOU supports the construction of thousands of megawatts of AI computing power to advance sovereign cloud infrastructure for Canada and its allies, and promotes the building of large transmission interties with British Columbia and Saskatchewan to strengthen the supply of low-carbon power for key industries.

Commitments

The following represents a high-level overview of the commitments made by the parties under the MOU, reflecting their shared objectives and responsibilities.

Alberta’s commitments:

• Advancing the bitumen pipeline project and supporting Indigenous co-ownership through the Alberta Indigenous Opportunities Corporation.
• Extending the Alberta Carbon Capture Incentive Program to support Pathways.
• Supporting the development of permitting for carbon sequestration, workforce training and Alberta’s capacity to export CCUS-related products and services.
• Implementing policy frameworks to incentivize data centre development and collaborating on a nuclear generation strategy by January 1, 2027.
• Working with Canada and British Columbia to expand western transmission grid capacity, and ensuring the residents of British Columbia benefit economically from the bitumen pipeline project.

Canada’s commitments:

• Suspending the Oil and Gas Emissions Cap and Clean Electricity Regulations in Alberta pending a new carbon pricing agreement.
• Designating the bitumen pipeline project to Asian markets as a national priority eligible for Major Projects Office review under the Building Canada Act (Canada).
• Extend federal investment tax credits and other policy supports to increase large-scale CCUS investment, including Pathways and enhanced oil recovery, to attract more domestic and foreign capital.
• In consultation with Indigenous leadership, using the Canada Indigenous Loan Guarantee Corporation to support Indigenous co-ownership of the bitumen pipeline project, and, if necessary, the Pathways project.
• Enabling bitumen exports from a strategic deep-water port to Asian markets, including potential adjustments to the Oil Tanker Moratorium Act (Canada).
• Facilitating federal support for CCUS and nuclear projects through investment tax credits and policy measures.
• Amending the Competition Act (Canada) to remove “greenwashing” provisions and reduce investment uncertainty.
• Collaborating with Alberta to develop policies supporting nuclear technology, CCUS and energy storage for a reliable, affordable and decarbonized electricity system.

In addition, Canada and Alberta have agreed to undertake several joint commitments guided by principles of collaboration, regulatory efficiency and climate leadership. Both parties pledge to work together and with British Columbia to advance major energy projects, ensure meaningful Indigenous engagement and streamline regulatory and assessment processes. Their approach emphasizes competitive and predictable carbon pricing, enforceable emissions reductions targets and mutual accountability while supporting domestic supply chains and maintaining transparent communications.

For more specifics on the joint commitments made by Canada and Alberta, please see the MOU.

The parties will appoint an Implementation Committee which will drive progress on the MOU’s commitments, with key deadlines in 2026 and 2027 for pipeline applications, carbon pricing agreements and energy infrastructure development

Takeaways

The MOU signals a new era of federal-provincial cooperation, regulatory certainty and investment opportunities in Canada’s energy sector.

Key takeaways for businesses and investors once the MOU’s commitment have been implemented include:

• Accelerated project timelines and reduced regulatory barriers.
• Expanded opportunities for Indigenous partnership and co-ownership.
• Federal and provincial incentives for CCUS, renewables and data centre infrastructure.
• Clearer carbon pricing and emissions reduction targets.
• Potential for new export routes and market access, especially to Asia.

For more guidance on how this MOU impacts your business, including specific projects or investment opportunities in Canada’s energy sector, the MLT Aikins energy team would be happy to assist.

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