Prime Minister Mark Carney and Alberta Premier Danielle Smith are nearing an agreement regarding the future of Alberta’s energy industry, as indicated by a senior government official. The deal is expected to address the northwest B.C. oil pipeline that Smith has been advocating for.
In contrast to the previous government’s opposition to an oil pipeline to the region, Carney is willing to explore the possibility if Alberta, as the proponent, fulfills Indigenous consultation requirements and engages in negotiations with the B.C. government. Challenges include opposition from B.C. Premier David Eby and the existing B.C. tanker ban bill under the Trudeau administration.
The federal government is contemplating limited exemptions and could potentially leverage its authority under C-5, the One Canadian Economy Act, to permit tankers associated with the proposed pipeline to bypass the ban. However, a complete removal of the tanker ban is not under consideration by the government.
Although the construction of the pipeline is not on the immediate horizon, Alberta must undertake the necessary regulatory and constitutional procedures before Ottawa would consider advancing the project through the Major Projects Office.
The Trans Mountain expansion project, acquired by the federal government in 2018, became operational in 2024 after significant investments. The project has proven profitable, with earnings of approximately $568 million in the first quarter of 2025, facilitating access to new markets and boosting tax and royalty revenues.
Smith anticipates that a new pipeline to the northwest will yield similar benefits. As part of the potential agreement between Ottawa and Alberta, there is a pledge to decrease emissions from the oil sector.
Carney is actively pushing for the Pathways Plus project, a carbon capture, utilization, and storage initiative based in Alberta, aimed at reducing emissions from the province’s oilsands exports. Additionally, the industrial carbon tax is emphasized as a crucial component of the government’s climate action plan.
Following a period of strained relations, Canada and Alberta have experienced a positive shift since Carney’s election, with ongoing constructive discussions between the parties. Carney and Smith are personally involved in negotiating the deal, ensuring mutual acceptance before finalizing any agreement.
Smith highlighted a “new vision” for Alberta’s energy sector, emphasizing the need for urgency in advancing energy development to address separatist sentiments in the province. Notably, the potential deal could face challenges within the federal Liberal caucus, requiring acceptance of policy reversals from the previous government.
Discussions with the B.C. government and coastal First Nations are essential before any amendments to the tanker ban can materialize, according to B.C. Liberal MP Jonathan Wilkinson. Consent from these stakeholders is crucial for the successful implementation of energy projects in the region.
Green Party Leader Elizabeth May staunchly opposes lifting the tanker ban, asserting that oil tankers on B.C.’s West Coast are untenable due to environmental and Indigenous concerns. May’s stance aligns with the sentiments of coastal Indigenous groups and British Columbians.
The negotiations between Carney and Smith remain ongoing, with a potential Memorandum of Understanding on the horizon, contingent on approval from both parties. The outcome of the discussions will significantly impact the future of Alberta’s energy sector.