The federal and Alberta governments have progressed a climate and energy agreement, potentially initiating the construction of an oil pipeline to the West Coast as early as September 2027. Prime Minister Mark Carney and Alberta Premier Danielle Smith unveiled the plan in Calgary, building on a previous memorandum of understanding signed in November. The agreement involves enhancing Alberta’s industrial carbon price incrementally, with construction activities possibly commencing by September 1, 2027.
As part of the agreement, Alberta is set to propose a new oil pipeline to the major projects office by July 1, with the federal government designating it a project of national interest by October 1. The process will adhere to consultation duties with Indigenous communities, and discussions with British Columbia will be held regarding the pipeline application.
During the signing ceremony in Calgary, Carney and Smith provided statements but did not take questions. They later held separate news conferences to address media inquiries. Smith expressed that the agreement signifies progress towards Canada’s ambition to become a global energy leader, calling it a significant step forward.
Carney emphasized the importance of trust in building a cooperative Canada, highlighting the collaborative efforts between the federal and provincial governments. Although no private sector proponent or route for the pipeline has been identified, the Alberta government will act as the project proponent in the submission process.
The agreement also underscores the commitment to the Pathways project, a carbon capture, utilization, and storage initiative, with construction dependent on the pipeline project. The Pathways project’s emission reduction targets have been recalibrated, aiming to capture six megatonnes annually by 2035 and achieve a total reduction of 16 megatonnes by 2045.
Furthermore, the agreement outlines a gradual increase in Alberta’s industrial carbon emissions price, reaching $130 per tonne by 2040. The discrepancy between the effective and headline carbon prices is detailed, with a minimum floor price commitment from Alberta starting in 2030. While some environmental groups criticized the agreement, Carney defended it, citing the shared commitment to achieving net zero emissions by 2050.
The potential pipeline route through British Columbia has garnered mixed reactions, with B.C. Premier David Eby expressing concerns about rewarding negative behavior and emphasizing the need for unity within Canada. Opposition parties have voiced differing opinions, with Conservative Leader Pierre Poilievre advocating for a faster pipeline construction process without a carbon tax, while NDP Leader Avi Lewis criticized the agreement as a surrender to the oil and gas industry.
In addition, the agreement addresses clean electricity regulations in Alberta pending legal outcomes, with discussions on equivalency agreements or potential repeals based on judicial decisions. Carney also introduced a national strategy to double Canada’s electricity grid capacity by 2050, incorporating a larger role for natural gas power.