The development of Alberta’s oil sands will result in significant greenhouse gas (GHG) emissions. This paper summarizes the implications of this development for Canada’s emissions profile and reviews briefly the rationale for biotic carbon sequestration as a means of offsetting GHG emissions. The paper then turns to eight important issues for sinks-based offsets. These issues are: (1) the legal foundation for biotic carbon sequestration; (2) the risk of project failure and leakage; (3) monitoring and verification; (4) market intermediaries; (5) environmental risks; (6) land-use conflicts; (7) the alignment of regulatory requirements, policies and incentives; and (8) collateral benefits and strategic objectives. While some of these issues were identified in the federal and Alberta climate change plans released in 2002, these plans fall far short of establishing a comprehensive legal and policy framework for sinks-based offsets. The paper concludes by arguing that this framework should include carbon rights legislation, a regulatory and certification regime, and non-market mechanisms to increase biotic carbon sequestration. The promotion of sinks-based offsets should also occur as part of an integrated approach to resource and environmental management.