Canada's domestic energy policy is on a collision course with the international obligations it just endorsed.
Last month, Canada voted in favour of the United Nations General Assembly resolution welcoming the International Court of Justice advisory opinion on climate change. It was a clear declaration from the Carney government that climate change is an international and domestic legal obligation. By supporting the resolution, Canada aligned itself with a growing global consensus that states have enforceable duties to use all means at their disposal to protect the climate system and prevent activities within their borders that would cause significant, foreseeable climate harm.
The consequences for Canadian economic and environmental policy-making are serious. The opinion essentially clarified that states cannot rely on short-term economic interests to justify conduct that undermines climate stability and jeopardizes fundamental human rights. It affirmed that governments — particularly historically important emitters (like Canada) — have obligations grounded in international law to exercise due diligence, prevent transboundary environmental harm and take meaningful action to reduce emissions. To the global community of states and investors, Canada’s support for the resolution indicates that it accepts these principles as part of the emerging architecture of international law.
These positions are fundamentally incompatible.
This is what makes the Carney government’s current stance on fossil fuel expansion so contradictory. Internationally, Canada is endorsing the authority of the ICJ and supporting legal clarity around states’ climate obligations. Domestically, the same government seeks to build new bitumen pipeline infrastructure, has already expanded fossil gas production and proposed to eliminate environmental legal protections under the language of “investment certainty” and “economic competitiveness.”
A government cannot endorse international legal findings affirming states’ duties to rapidly reduce emissions while simultaneously facilitating infrastructure designed to lock in decades of additional fossil fuel dependence. How can Canada claim to support a rules-based international order abroad while treating climate obligations as politically flexible at home?
These positions are fundamentally incompatible.
In many ways, this contradiction was foreseeable. In 2023, the David Suzuki Foundation published a legal opinion that said that continued oil and gas expansion was increasingly incompatible with Canada’s obligations under international climate and human rights law. The opinion also warned that governments and investors faced growing exposure under trade and investment law as the global energy transition accelerates, including the escalating risk of stranded fossil fuel assets and destabilized investment environments. Those risks have only multiplied since then.
Since 2023, domestic courts and international tribunals around the world have continued to make clear that climate protection is not discretionary and that states must align domestic policy with climate science and human rights obligations. Governments can be held responsible for their economic and regulatory decisions that materially worsen climate harm.
Governments can be held responsible for their economic and regulatory decisions that materially worsen climate harm.
The implications for Canadian law are significant. ICJ advisory opinions are among the most authoritative interpretations of international law and will inevitably influence domestic legal interpretation. Canadian courts routinely look to international law when interpreting constitutional rights, administrative duties and environmental assessment obligations. The ICJ advisory opinion will shape future litigation, as well as expectations surrounding public and private climate accountability and Canada’s relationships with trade and investment partners.
Globally, hundreds of cities and subnational governments, along with institutions, insurers and sovereign wealth funds are increasingly understanding that long-term economic stability cannot be built on expanding the very activities driving planetary destruction, and that “climate risk is financial risk.”
… climate risk is now inseparable from legal and economic risk.
Embedded in Canada’s support for the new UNGA resolution is the federal government’s acknowledgement that climate risk is now inseparable from legal and economic risk. This is why the Carney government’s planned investment summit in September 2026 will become such an important moment of scrutiny. Climate-vulnerable states and communities at home have every right to probe whether Canada’s domestic economic strategy aligns with the international legal obligations it now publicly supports. Investors will be asking the same question.
If Canada intends to present itself as a credible and reliable actor within a lawful international order, then its investment strategy must reflect the realities of a world in climate crisis. Climate credibility cannot coexist indefinitely with policies that deepen long-term fossil fuel dependence.
Climate credibility cannot coexist indefinitely with policies that deepen long-term fossil fuel dependence.
The September investment summit will serve as more than an economic forum. It will become a focal point for assessing whether Canada is prepared to align its trade, investment, energy and infrastructure policies with the international legal responsibilities it has chosen to endorse.
