Carney Poised to Announce Deal With Alberta, Opening Door to New Pipeline and Policy Shift

Ottawa (Rajeev Sharma): Prime Minister Mark Carney is expected to reveal a major agreement with Alberta on Thursday that could revive the possibility of a new oil pipeline to Canada’s West Coast. In return, Ottawa is preparing to introduce tougher environmental rules and ease some of its existing climate policies.

Alberta Premier Danielle Smith has described the negotiations as a “grand bargain,” centred on advancing the Pathways Alliance carbon-capture project while also pushing ahead with a long-sought pipeline to the Pacific. The deal comes after months of back-and-forth between federal and provincial officials.

Speaking in Ottawa a day before the announcement, Carney said the upcoming memorandum of understanding would shape Canada’s economic and environmental future. “It’s about building this economy, it’s about making Canada more independent, and it’s about making Canada more sustainable,” he said, adding that the agreement would cover “many aspects.”

Carney has repeatedly vowed to position Canada as an “energy superpower,” but any new pipeline faces a significant barrier: the federal tanker ban. The moratorium, enacted in 2019 under former prime minister Justin Trudeau, prohibits large crude-carrying tankers from operating along the northern coast of British Columbia. Alberta has long opposed the ban, but B.C. Premier David Eby has urged Ottawa to keep it in place. Coastal First Nations leadership also reiterated Wednesday that a northern-coast oil pipeline “will never happen.”

The federal government has insisted that no project will move forward without the full approval of British Columbia and affected First Nations. When asked whether Ottawa had promised Alberta the end of the tanker ban, Carney declined to give details, saying, “It’s a good question for tomorrow.”

The agreement is also expected to address changes to Alberta’s industrial carbon pricing system. The province froze its industrial carbon price at $95 per tonne until 2026, diverging from the federal backstop, which will rise to $110 per tonne next year. Ottawa has not yet confirmed whether it will impose the backstop on Alberta or on Saskatchewan, which eliminated its industrial carbon pricing system earlier this year.

The federal climate competitiveness strategy, released alongside the budget, leans heavily on strengthening the industrial carbon price and outlines a long-term emissions pricing plan beyond 2030. The system relies on credits generated by companies that stay below emissions caps, which can be sold to firms that exceed them. The government argues that the price of these credits must remain high enough to encourage real investment in emission-reduction technologies.

The strategy also opens the door to ending Ottawa’s emissions cap on oil and gas producers—another long-standing demand from Alberta and industry leaders. However, any such move would depend on improvements to industrial carbon pricing, greater adoption of carbon-capture technology, and stronger methane-reduction rules.

Thursday’s announcement is expected to clarify whether Ottawa and Alberta have finally found common ground on one of the most contentious energy debates in the country.