December 2025 – Resilient LLP (formerly DeMarco Allan LLP)

ECCC Publishes Discussion Paper and Launches Consultation on Effective Carbon Markets

19 December 2025 No Comments By DT Vollmer

Environment and Climate Change Canada (ECCC) recently published a discussion paper on “Driving effective carbon markets in Canada” (the Discussion Paper). The Discussion Paper sets out proposed changes to the federal benchmark criteria ahead of the federal government’s review next year. ECCC also launched consultations on the Discussion Paper, seeking comments and responses to questions included in the Discussion Paper from stakeholders. This bulletin briefly summarizes the key topic areas, current requirements, the federal government’s proposal and considerations, and next steps set out in the Discussion Paper. Common scope of coverage Current requirement. The current benchmark requires that carbon pricing systems maintain a common scope, covering, at a minimum, an equivalent percent of combustion emissions as the federal backstop. It also requires market-based systems to cover industrial process emissions, and to limit eligibility for OBPSs, performance rebates, or the free allocation of allowances to sectors that are at risk of carbon leakage and competitiveness impacts of carbon pricing. Proposals and considerations. ECCC notes that the removal of the fuel charge (see our earlier bulletin here) requires rethinking how scope of coverage should work. The federal government is considering the following three options to modify the benchmark to specify the common scope criteria explicitly to ensure consistent minimum coverage across systems: Option 1: A threshold-based approach that would cover all facilities in specific sectors emitting above a certain level annually. Thresholds under consideration are 10kt per year (Option 1A) and 25kt per year (Option 1B). Option 1A would cover a large number of facilities and industrial activities, which would support market function and liquidity, but could create intra-sectoral competitiveness risks in some sectors. Option 1B would reduce these risks by covering fewer industrial activities where there is a significant split between emissions above and below the threshold, but may negatively impact market function…

Canada Announces Proposed CFR Amendments

9 December 2025 No Comments By DT Vollmer

Environment and Climate Change Canada (ECCC) published a discussion paper to invite views and information related to targeted amendments to the Clean Fuel Regulations (CFR) on December 3, 2025. The proposed amendments are largely intended to complement Canada’s Biofuels Production Incentive (announced in September), which is expected to provide more than $372 million over two years to support the stability and resiliency of domestic producers of biodiesel and renewable diesel. This bulletin provides a brief summary of the discussion paper. Background. The CFR require producers and importers of gasoline and diesel (i.e., primary suppliers) to reduce the life cycle carbon intensity of gasoline and diesel produced and imported for use in Canada, with the intent of reducing GHG emissions. A life cycle approach considers the GHG emissions involved in multiple stages of the fuel’s production process, from feedstock extraction or cultivation to fuel combustion. CFR credits can be created by: compliance category 1 – undertaking projects that reduce the life cycle carbon intensity of liquid fossil fuels (e.g., carbon capture and storage, renewable electricity, co-processing) compliance category 2 – supplying low-carbon intensity fuels (e.g., ethanol, biodiesel) compliance category 3 – supplying fuel or energy to advanced vehicle technology (e.g., electricity or hydrogen in vehicles) The discussion paper notes that the majority of credits created to-date under the CFR come from the supply of low-carbon intensity fuels. While an important share of these credits comes from fuel produced in Canada, Canada does not currently produce enough low-carbon intensity fuels to meet the total domestic demand. As such, a large share of CFR credits for low-carbon intensity fuel supply reportedly come from imports, mostly from the United States (see Annex 1). Policy goal. The stated goal of the CFR amendments is to strengthen the resiliency and support the development of Canada’s low-carbon fuel sector, while maintaining the Regulations’ primary focus on…

Canada and Alberta Sign Energy Collaboration MOU

1 December 2025 No Comments By DT Vollmer

Prime Minister Mark Carney and Alberta Premier Danielle Smith on Thursday announced the signing of a Memorandum of Understanding (the MOU) intended to lower emissions, support natural resource development, and strengthen economic competitiveness. The MOU sets out a framework for enhanced federal-provincial collaboration in the energy sector with the stated goal of achieving net-zero emissions by 2050 while advancing Alberta’s energy-resource potential. The announcement also prompted debate, including references to the potential development of at least one new bitumen pipeline to the B.C. coast. It also prompted the resignation from Cabinet of Steven Guilbeault, Minister of Canadian Identity and Culture and former Minister of Environment and Climate Change. This bulletin summarizes the MOU’s key objectives, priority projects, and federal and provincial commitments, including actions related to Alberta’s Technology Innovation and Emissions Reduction (TIER) system. Objectives. The MOU outlines the following objectives: Increase production of Alberta oil and gas to contribute to export and national security goals, while reducing the emissions intensity of Canadian heavy oil production to reach net-zero by 2050. Expand electricity generation capacity in Alberta for consumer and industrial use, including demand from AI data centres, while achieving net-zero GHG emissions in the electricity sector by 2050. Establish electricity and energy policies that advance affordability, grid stability, competitiveness, and long-term investment certainty, and that attract domestic and foreign private-sector capital. Reduce regulatory overlap and simplify permitting processes to achieve a maximum two-year approvals timeline. Provide opportunities for Indigenous rightsholders to participate in consultation processes and economic activities, including through ownership and partnership arrangements. Priority projects. The MOU identifies the following priority projects: Development of one or more privately financed pipelines, in addition to the Trans Mountain expansion, with Indigenous co-ownership and economic participation. At least 1 million barrels per day of lower-emission Alberta bitumen with access to Asian markets is identified as a priority. An application to the…