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OTTAWA — Canada and Alberta have reached an agreement in principle to significantly reduce methane emissions from the oil and gas sector, as both governments aim to balance environmental goals with continued energy production.
The proposed framework targets a 75 per cent reduction in methane emissions in Alberta by 2035, compared with 2014 levels, and builds on a broader Canada-Alberta memorandum of understanding signed in November 2025 focused on energy development, emissions reductions and market access.
Under the agreement, Alberta would implement a performance-based system combining regulations, offset credits and targeted investments. Ottawa, in turn, would pursue an equivalency agreement under the Canadian Environmental Protection Act, allowing federal methane rules to be replaced by provincial measures, provided equivalent emissions reductions are achieved.
The two governments also committed to selecting an independent third party to model methane reductions, publishing data on emissions sources and mitigation efforts, and taking corrective action if targets are not met.
Prime Minister Mark Carney says the agreement reflects a collaborative approach to reducing emissions while protecting jobs and strengthening Canada’s position as a reliable energy supplier.
Alberta Premier Danielle Smith says the deal maintains provincial control over how reductions are achieved, while continuing to support responsible energy development.
Federal officials say methane is a particularly potent greenhouse gas, with a significantly higher short-term warming effect than carbon dioxide, making it a key target for near-term emissions reductions. Nearly a quarter of emissions from Canada’s oil and gas sector come from methane.
Canada introduced initial methane regulations in 2018 and strengthened them in 2025. Those rules are expected to reduce greenhouse gas emissions by 304 million tonnes between 2028 and 2040, while emissions from the sector had already declined about 40 per cent between 2014 and 2023 even as production increased.
The agreement is also tied to broader federal-provincial efforts to streamline major project approvals and support investment. Governments say strengthening methane rules could spur growth in clean technology, noting more than 130 Canadian companies now specialize in methane reduction technologies.
The proposed equivalency agreement will undergo a 60-day public consultation period once finalized. Officials say they aim to complete the deal by the end of the year, with implementation targeted for Jan. 1, 2027 and a 10-year term.
Both governments say the agreement is intended to provide regulatory certainty for industry while reducing emissions and reinforcing Canada’s role as a competitive supplier of lower-emission oil and gas in global markets
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