Canada Launches Federal-Provincial-Territorial Working Group To Strengthen Carbon Market Cooperation
28 ... October 20 ... 6 Government of Canada The Government of Canada has launched a new federal-provincial-territorial working group to explore ways to improve cooperation and strengthen the functioning of carbon markets across the country. Announced by Environment and Climate Change Canada on October 23, 2026, the initiative aims to support investment in clean industrial growth while helping Canada reduce emissions, strengthen energy security and build a more competitive economy. The initiative follows an agre...
Wednesday, 28th October 2026
Government of Canada
The Government of Canada has launched a new federal-provincial-territorial working group to explore ways to improve cooperation and strengthen the functioning of carbon markets across the country. Announced by Environment and Climate Change Canada on October 23, 2026, the initiative aims to support investment in clean industrial growth while helping Canada reduce emissions, strengthen energy security and build a more competitive economy.
The initiative follows an agreement reached by First Ministers in July 2026 to establish a working group examining different models for linking carbon markets across Canada. The group includes representatives from every province and territory, alongside the Government of Canada. It held its first meeting during the week of October 23 and discussed a draft workplan to guide its work.
The working group will facilitate technical collaboration between federal, provincial and territorial governments. Its objective is to explore how the distinct carbon markets operating across Canada could be better streamlined and integrated. Improving the functioning of these markets is intended to provide long-term certainty for industry and investors, while helping Canadian companies remain competitive in global markets.
Environment and Climate Change Minister Julie Dabrusin said the working group provides an opportunity for governments to work together to streamline and integrate the country’s different carbon markets. The goal is to improve market functioning, provide greater certainty for businesses and investors, and support companies competing internationally.
The federal government described cooperation on carbon markets as part of its broader efforts to build a stronger, cleaner Canadian economy. It highlighted investments in clean electricity, emissions reductions and Canadian innovation as important elements of this approach. Federal, provincial and territorial cooperation is also being considered alongside efforts to strengthen the national economy and remove internal trade barriers.
According to the government, well-functioning carbon markets can unlock significant new investments that support Canada’s energy and economic ambitions while reducing greenhouse gas emissions. Decarbonization is also presented as a shared national undertaking, bringing together governments, communities and Canadians around opportunities to strengthen economic competitiveness and prosperity.
Since 2019, carbon pollution pricing has applied across Canada through a combination of federal, provincial and territorial systems. This approach allows provinces and territories flexibility to implement their own carbon pricing systems. The new working group will examine opportunities to improve cooperation across these different arrangements rather than replacing the existing framework through a single announced model.
The working group is expected to report to First Ministers by July 2027, providing detailed recommendations on potential approaches to linking carbon markets across Canada. Its work will focus on technical collaboration among governments, with representatives nominated by their respective jurisdictions.
The government clarified that this initiative is separate from broader engagement on carbon pricing under the Greenhouse Gas Pollution Pricing Act and the review of the federal benchmark. The working group’s mandate is specifically focused on exploring models for linking carbon markets and improving their operation across provincial, territorial and federal jurisdictions.
The announcement also follows a separate federal initiative revealed in September 2026, when the Government of Canada said it was exploring a policy framework for trading internationally transferred mitigation outcomes. Together, the initiatives form part of the government’s ongoing consideration of cooperation across domestic carbon markets and international carbon market arrangements.
The working group’s recommendations are expected by July 2027. Its findings will help inform how federal, provincial and territorial governments could improve the integration and functioning of Canada’s carbon markets while supporting investment, emissions reductions and long-term industrial competitiveness.