According to the Globe and Mail, the provincial governments of Ontario and Quebec have signed an agreement with Mexico on climate policy. Why wouldn’t Canada sign the deal? Good question.
As pretty much every chapter in The Canadian Environment in Political Context explains, federalism means divided and shared powers between two or more levels of government. In Canada, the Constitution divides power over environmental issues between the provinces and the federal government. With regard to natural resources and energy, the provinces have the bulk of the power (see Chapter 8 specifically). Essentially, the federal government cannot make climate policy because the federal government does not have jurisdiction over natural resource extraction on provincial lands. It cannot regulate CO2 emissions from sources it cannot control. (The US government is similar, but their federal government found a loop hole – it declared CO2 a toxic chemical and regulates it under federal chemical legislation).
Ontario’s provincial government has power to make policy regarding Co2 (and other emissions) inside the province. Quebec’s provincial government has the same power. Both provinces have adopted fairly stringent climate policy. They have also created an agreement – with the state of California – to engage in cap and trade together. They can trade permits to emit CO2 between the provinces and states.
Okay, so today, Ontario and Quebec signed an agreement with Mexico. What does that mean? It means that companies or industries that produce CO2 in Ontario or Quebec can purchase emission-reduction credits in Mexico. Sounds complicated, right? Imagine if a cement manufacturing company in Ontario wants to emit more CO2 than it has permits (or permissions) to do so. The company would either have to buy another permit OR it can reduce emissions in Mexico somewhere to offset its emission in Ontario. The company in Ontario pays an emitter in Mexico to keep the fossil fuel in the ground. That means overall in North America, emissions go down. They might rise in Ontario and go down in Mexico. They might rise in Quebec and go down in Ontario… or California…or Mexico. The CAP goes down over time – that means that emissions have to go down. More fossil fuels stay in the ground. But it can uneven… here or there.