CALGARY, B.C. – Prime Minister Mark Carney signed a landmark agreement with Alberta Premier Danielle Smith on Thursday that rolls back key federal climate rules, signaling a major national policy shift in favour of fossil fuel development. The deal immediately created tensions within the Liberal government, with former environment minister Steven Guilbeault resigning from the cabinet over concerns that Canada’s climate plan was being dismantled.
Under the agreement, the federal government will scrap a planned emissions cap on the oil and gas sector and drop rules on clean electricity. In exchange, Alberta committed to strengthening industrial carbon pricing and supporting the massive Pathways Plus carbon capture-and-storage project.
Prime Minister Carney justified the shift by citing the need for the energy sector to help the Canadian economy weather instability caused by U.S. President Donald Trump’s tariffs, which he estimated will wipe $50 billion from Canada’s economy.
The West Coast Pipeline and Tanker Ban Challenge
The most significant immediate impact for the West Coast is the commitment to facilitate new market access for Alberta oil.
Alberta is exploring the feasibility of a new crude oil pipeline to British Columbia’s northwest coast to increase exports to Asia. To enable this, the agreement includes a commitment by the federal government to adjust the Oil Tanker Moratorium Act in order to facilitate Asian oil exports.
- The Federal Commitment: Carney promised the government will enable a clear and efficient approval process for a new pipeline designed to transport one million barrels of low-emission Alberta bitumen a day, specifically targeting new Asian markets.
- The B.C. Opposition: The commitment immediately drew fierce opposition. British Columbia Premier David Ebystated the existing legislation, which bans oil tankers off the northern coast, should stay in place. A coalition of Indigenous groups in British Columbia went further, stating they will not allow oil tankers on the northwest coastand that the pipeline project “will never happen.”
The existing Trans Mountain pipeline, which currently provides the only direct export route to Asia, tripled its capacity last year but is expected to run out of capacity by the end of the decade as Alberta boosts its output.
Industry Backs Deal, Environmentalists Object
The agreement has created a sharp divide among national stakeholders:
- Oil Industry Support: The Canadian Association of Petroleum Producers praised the deal, stating that the elimination of the emissions cap and the commitment to work on new market access are “significant steps towards unlocking Canada’s vast natural energy resources.”
- Environmental Opposition: The Pembina Institute, a clean energy think-tank, raised serious concerns, stating the agreement “risks doing significant damage to minimum national standards that will have broader impacts on Canada’s climate change efforts.”
Despite the rollback of specific regulations, Carney reaffirmed his commitment to net-zero carbon emissions by 2050. The federal government and Alberta also agreed to cooperate on building nuclear power plants, strengthening Alberta’s electricity grid to power AI data centers, and building transmission lines to neighboring provinces, all framed within a new strategy aiming to double the clean grid across Canada.
