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60 Alta. L. Rev. 329 (2022-2023)
The Evolution of Canada's Carbon Markets and Their Role in Energy Transition

handle is hein.journals/alblr60 and id is 333 raw text is: CANADA'S CARBON MARKETS AND ENERGY TRANSITION 329 THE EVOLUTION OF CANADA'S CARBON MARKETS AND THEIR ROLE IN ENERGY TRANSITION JAKE SADIKMAN, SANDER DUNCANSON, DANA SARIC, COLEMAN BRINKER, STEPHAN PACHOLOK, AND LANDON MILLER* The tapestry of compliance and voluntary market mechanisms for carbon and other environmental attributes in Canada's infrastructure capital markets reflects the almost 30- year history of carbon policy development in Canada and around the globe. This history of provincial and federal policy and regulatory changes has left some scars and stranded investments. As a result, energy market professionals and emission offset project developers have had to be resilient in their efforts to scale, integrate, and maximize opportunities for carbon credit products. Recently, we have witnessed increased efforts toward climate- focused investment criteria and technology-bolstered acceleration toward net-zero targets. Carbon credits are one of the key tools that will allow conventional businesses to continue operating as the economy decarbonizes, and they can also facilitate investment in new technologies and practices that will be critical to achieving material economy-wide emissions reductions. Both domestically and internationally, however, there are key barriers that are limiting carbon markets and that highlight the need for more carbon finance investment and policy certainty, as well as standardization and credibility in both compliance and voluntary environmental product markets. Following the Supreme Court of Canada's ruling in March 2021 to uphold the constitutionality of thefederal government's Greenhouse Gas Pollution Pricing Act, market expectations were high (and perhaps still are) that the regulatory landscape supporting carbon finance in Canada would finally come into better focus. This article will explore the current snapshot of compliance and voluntary carbon finance tools available in Canada, and will highlight some of the challenges and opportunities in navigating the interplay between these products. TABLE OF CONTENTS I. INTRODUCTION ............................................. 330 II. BACKGROUND ON CARBON MARKETS ............................. 331 A. FORMS OF CARBON MARKET MECHANISMS .................... 331 III. COMPLIANCE MARKETS FOR CARBON CREDITS IN CANADA ........... .332 A. REGULATING GREENHOUSE GAS EMISSIONS IN CANADA ......... .332 B. FEDERAL FRAMEWORK FOR A COMPLIANCE MARKET ........... .333 C. PROVINCIAL FRAMEWORKS FOR COMPLIANCE MARKETS ........ .335 D. BRITISH COLUMBIA ........................................ 335 E . A LBERTA ............................................. 336 F. SASKATCHEWAN ....................................... 339 G . O NTARIO ............................................. 340 H. NEWFOUNDLAND AND LABRADOR .......................... 342 Jake Sadikman is a Partner at Osler, Hoskin & Harcourt LLP, active in the firm's Energy Group and Construction and Infrastructure Group. Sander Duncansonis a Partner at Osler, Ho skin & Harcourt LLP and is Co-Chair ofthe firm's Regulatory, Environment, Indigenous & Land Group. Dana Saric is Senior Counsel at Capital Power Corporation and Landon Miller is Counsel at Imperial Oil Limited. Coleman Brinker is an Associate in Osler, Hoskin & Harcourt LLP's Regulatory, Environment, Indigenous & Land Group and Stephan Pacholok is an Associate in Blake, Cassels & Graydon LLP's Financial Services Group. Additional recognitionis owedto Andrew Duran and AayushBhawani fortheir diligent research and citation assistance.

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