12/10/2025
Steven Guilbeaut is one ethical politician.
Letter from Steven Guilbeault This "grand compromise" looks like a fire sale
Prime Minister Mark Carney and Alberta Premier Danielle Smith in Calgary on November 27th
Former Environment Minister Steven Guilbeault harshly criticizes the energy agreement recently concluded between his boss, Mark Carney, and Alberta Premier Danielle Smith.
Published yesterday at 5:00 AMShare
Steven Guilbeault
Steven Guilbeault
Member of Parliament for Laurier–Sainte-Marie
Many have described the energy memorandum of understanding signed late last month by Premier Mark Carney and Alberta Premier Danielle Smith as a major compromise. We've been through this before.
Former Prime Minister Justin Trudeau also struck a "grand compromise" in 2018 when, through his mediation, Canadians purchased the Trans Mountain (TMX) pipeline. Canada would buy a pipeline, and Alberta would fight climate change. Unfortunately, successive Conservative governments in Alberta have systematically dismantled their plan. So today, diluted bitumen from Alberta flows through the pipeline to the Pacific, but the promised emissions reductions made by oil companies in this quid pro quo have vanished like smoke.
My political reflex would be to note that the Liberals lost all their seats in Alberta and Saskatchewan in the subsequent 2019 federal election, while environmentally conscious voters from British Columbia to Atlantic Canada greeted Liberal volunteers at the doorstep with an incredulous "You bought a pipeline?!"
I have never hidden my disagreement with the TMX agreement, but we took advantage of the space it created, at least in my view, to move forward with a series of emissions reduction measures that, for the first time, put Canada on track to meet its international commitments.
It is in light of this history that I view the most recent federal-provincial energy agreement as a significant step backward in the fight against climate change, a cut-rate sale rather than a major compromise. The Canada-Alberta memorandum of understanding abandons several key, hard-won measures that were rigorously modeled, consulted on, negotiated, and implemented, or proposed, over the past decade.
What makes the situation even more incomprehensible is that Canadians seem to receive nothing in return for all that is being sacrificed.
The federal government hailed the agreement as a major achievement, in part because the Alberta government agreed to raise its pollution pricing for industry to $130 per tonne. Industrial carbon pricing (which every province must achieve, whether through the federal program or a provincial equivalent) is supposed to increase by $15 per year to reach $170 per tonne by 2030, but the memorandum of understanding does not appear to commit Alberta to annual increases beyond $130. Just last week, Danielle Smith weakened Alberta's carbon trading system, making it much more difficult to achieve a real price of $130 per tonne.
The ceiling on pause
The protocol also puts on hold the proposed cap on emissions from the oil and gas sector, a regulatory tool designed to ensure that the country's largest emitting sector (31% of total Canadian emissions) actually does its part. Historically, absolute oil and gas emissions have increased in line with production. Electricity, on the other hand, has increased its energy production, but overall emissions from the Canadian electricity sector have fallen by nearly 60% since 2005.
There is no credible scenario for achieving the 2030 targets if the country's most polluting sector does not do its fair share. This is precisely why the cap was proposed: not to target anyone, but to guarantee genuine accountability.
Another major problem: the memorandum of understanding would suspend the clean electricity regulations for Alberta. This undermines the long-term certainty that investors need to develop clean energy, while also sending a signal to other provinces that national standards are now optional.
The electricity regulation, which does not come into force until 2035, aims to provide a clear roadmap to achieving carbon neutrality by 2050, a target that all provinces, including Alberta, have committed to achieving.
However, nothing in the protocol indicates what will replace the approximately 182 million tonnes of carbon that this clean electricity regulation was intended to eliminate. In fact, without these regulations, Environment Canada estimates that the industrial price of carbon would have to rise to $400 per tonne to achieve the same result.
And all this while further supporting the expansion of fossil fuels and allowing taxpayers' money to be used to increase enhanced oil recovery production, something the Government of Canada had pledged not to do just a few weeks ago in the 2025 budget.
Carbon capture and storage (CCS) is certainly an important technology, one among many, in the fight against climate change, but it is not a silver bullet. In the oil sands, CCS would only allow for a reduction of about 12.5% in emissions, according to the Alberta-based Pembina Institute.
According to the same organization, moving forward with CCS while adding 1 million barrels of oil per day (which is essentially what the Government of Canada is committing to do with this protocol) would leave us in a more polluting situation than maintaining current production… without CCS.
The price of a protocol
So, what is the price of this memorandum of understanding?
Environmental integrity, not a fleeting political agreement, will be the true measure of the cost of this deal. The federal government must ensure that the final agreement in April guarantees a $130 industrial price signal by increasing the annual rate for each additional tonne of production.
Alberta must also agree to reverse its discriminatory regulations on land use for renewable energy, and the province must present a credible plan to achieve its 2050 carbon neutrality target.
Yes, the global political and economic order has been disrupted, but the climate won't wait for us. Canada was reducing its emissions at a rate unprecedented in our history while maintaining a growing economy.
Last year, the country ranked third in the world for foreign direct investment, behind only the United States and Brazil. And according to the Canadian Climate Institute, an independent organization, Canada's previous emissions reduction plan had an 85 to 90 percent chance of meeting our 2030 targets. All that was needed was a little more ambition at the provincial level and, for the federal government, to stay the course on a plan that was working.
Unfortunately, with the rollback of hard-won measures such as carbon pricing for consumers, the cap on oil and gas emissions, clean electricity regulations and the abandonment of our commitment to stop subsidizing fossil fuels, it is now impossible to see how Canada can meet these targets, or even achieve carbon neutrality by 2050.
These are the challenges we face as the Government of Canada negotiates the details of this fire sale. Ever the optimist, I still cling to a glimmer of hope that this could prove to be a defining moment of leadership for the Premier of Alberta. Because the risk of utter failure is immense.
Correction:
An error crept into a previous version of this text which wrongly referred to a reduction in overall emissions from the Canadian electricity sector of around 650% since 2005. The reduction is actually 60%.
