Carney inks new energy deal with Alberta, paving way to new pipeline and internal dissent
OTTAWA — With a few strokes of a pen, Prime Minister Mark Carney ushered in a new era of relations with Alberta on Thursday, with a deal that promises to pave the way for a new bitumen pipeline to British Columbia’s coast.
While he and Smith were all smiles at the signing of their new deal in Calgary, Carney ushered in a wave of uncertainty around the Liberals’ long-stated commitments to climate policy by undoing more measures from his predecessor, prompting the resignation of one of the Liberals’ most passionate environmentalists from his cabinet.
Thursday’s signing of a memorandum of understanding (MOU) between Carney and Smith was the culmination of weeks of closed-door negotiations between both governments, each looking to hit restart on a relationship that had grown acrimonious under former prime minister Justin Trudeau upon Carney’s federal election win this past spring.
The document signing is being touted as an important step by both Alberta and Carney’s government to help transform Canada into a “global energy superpower,” as the prime minister promised during that campaign.
The deal itself saw Smith’s push for Carney to lay the path for the construction of a new million-barrel-a-day bitumen pipeline from Alberta to the Pacific Coast ultimately met, along with her push to see her province exempted from a set of clean energy regulations.
In exchange, Carney walked away with Smith agreeing to raise her province’s industrial carbon tax, a system that applies to the heaviest of emitters, from its current rate of $95 per tonne, which Smith froze earlier this year, to a “minimum price” of $130 per tonne, with the exact details around timelines and future increases to be negotiated through an agreement no later than next April.
Both governments also agreed to negotiate other agreements, one being on methane regulations. Thursday’s deal stipulates that the agreement would set a target of reducing methane emissions by 75 per cent below 2014 levels by 2035, five years later than what the Liberals initially said when Trudeau’s government introduced the policy back in 2023.
The deal also confirmed Carney’s plans not to impose the proposed cap on oil and gas emissions and to amend the “greenwashing” provisions, which his government first announced in the Liberals’ Nov. 4 budget.
“It’s a great day for Alberta, it’s a great day for Canada,” Carney said ahead of the signing.
The prime minister touted the deal as a “multifaceted agreement,” saying it sets the stage for an energy transition, “but really sets the stage for an industrial transformation.”
“At the core of the agreement, of course, it’s a priority to have a pipeline to Asia. That’s going to make Canada stronger, more independent, more resilient, more sustainable,” Carney said.
The deal also included a commitment that the federal government consider making an “adjustment” to the federal oil tanker ban off B.C.’s coast, which Trudeau legislated back in 2019, to pave the way for the construction of a pipeline to the Pacific Coast.
The document underscores that Smith would bring forward her proposal for the construction of a new pipeline to the new major federal projects office Carney set up earlier this fall, no later than next July.
As it stands, Smith’s government is acting as the pipeline proponent, with her hopes to hand it over to a private sector backer.
The deal itself spells out how both Alberta and Ottawa agree to work towards the “construction of one or more private sector constructed and financed pipelines,” that would carry “one million barrels a day of low-emission Alberta bitumen” to Asian markets.
It clarifies that the new pipeline project would be in addition to the expansion of the Trans Mountain pipeline.
The deal also outlines how both Alberta and Canada “remain committed” to achieving net-zero emissions by 2050.
B.C Premier David Eby has so far rejected the idea of a new oil pipeline being constructed to his province’s coast, as have coastal First Nations, who have said they have been shut out of the talks between Ottawa and Alberta.
Speaking after its signing, Eby panned the pipeline proposal as having no private sector proponent and being unlikely to gain the necessary support of coastal First Nations. He also cautioned against federal leaders allowing it to become an “energy vampire” and distracting them from looking at a series of other major infrastructure projects.
In a statement, the elected chief of the Heiltsuk Nation and president of the Coastal First Nations – Great Bear Initiative, said the new deal “does nothing” to advance the idea of a new oil pipeline to B.C.’s northwest coast “ever becoming a reality.”
“Coastal First Nations, along with the province of B.C, will never allow our coast to be put at risk of a catastrophic oil spill,” said Marilyn Slett.
Smith told reporters in Calgary that she spoke to Eby on Wednesday evening. On the question of needing support from First Nations and B.C., the Alberta premier pointed out there was “no mention of veto” in the new deal.
The Alberta premier celebrated the pact as clearing away most of what she called the “nine bad laws” she had called for Carney to address following his election this past spring.
Environmental and climate policy organizations, meanwhile, quickly decried the agreement as a massive setback in Canada’s climate policy. On Thursday afternoon, Steven Guilbeault, who served in Carney’s cabinet as heritage minister but held the environment portfolio under Trudeau, announced his resignation.
Rick Smith, president of the Canadian Climate Institute, a think-tank, specifically pointed to giving Alberta a special exemption from the clean electricity regulations, along with how the deal “slow walks previous commitments on methane rules.”
“That could trigger a race to the bottom on climate policy where other provinces seek special treatment and side deals over federal laws or regulations they object to,” he said in a statement.
Keith Stewart, senior energy strategist at Greenpeace Canada, said in a statement that the deal “is so much worse than we expected.”
“This is a betrayal of Canada’s climate commitments and makes a mockery of our commitment to reconciliation with Indigenous people.”
Speaking to reporters before question period, Environment Minister Julie Dabrusin said Canada would still be able to reach its net-zero carbon emission target by 2050, though she seemed to be walking back emission targets for 2030 and 2035.
She argued that the only way for Canada to meet its targets is to work with provinces, such as through the new MOU with Alberta.
“The 2030 and 2035 targets remain Canada’s targets. We’re determined to continue the work to get there. We also always knew those were ambitious targets. It’s always going to be a stretch to get there, but we have a lot of work to do.”
The deal with Alberta dominated question period in the House of Commons on Thursday afternoon, with all opposition parties firing at the Liberals for the new deal.
Conservatives accused the Liberals of maintaining taxes on Alberta’s industries, all the while not doing enough to build a pipeline. Leader Pierre Poilievre called on the Carney government to “get out of the way” of Alberta.
“They want to build a carbon tax without a pipeline,” Poilievre told MPs.
On the other hand, the Bloc Québécois charged the Liberals with abandoning the environment and the fight against climate change, all the while trampling on British Columbia.
Speaking to reporters at an event in Calgary, Carney said the pact with Alberta was “a first step,” with several more steps needing to unfold before any pipeline construction could begin, with the first being a private sector proponent coming forward.
“If there’s not a private sector component, there won’t be a pipeline,” the prime minister said.
Carney said other steps required for the project include finding equity ownership among First Nations in Alberta and B.C., as well as collaboration with B.C.
The deal also links a new bitumen pipeline from Alberta to the advancement of a massive carbon capture and storage project in the province, a project Carney and Smith commit to negotiating a trilateral agreement on with the group of oilsands companies, known as the Pathways Alliance, behind the proposal.
“I don’t know that the prime minister would have agreed to a new bitumen pipeline without Pathways, and we wouldn’t have agreed to Pathways without a new bitumen pipeline,” Smith told reporters at a news conference in Calgary.
Speaking at his own event, Carney emphasized that the deal with Alberta was about “much more than just a pipeline. ”
He pointed to the carbon capture and storage project as well as an agreement in the deal to work with Alberta on building new AI data centres, building out the province’s nuclear capacity, and the construction of new transmission systems with B.C. and Saskatchewan.
National Post
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