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Premier Mark Carney and Alberta Premier Danielle Smith jointly agreed on the path forward for a new bitumen pipeline to the coast of British Columbia, a hugely significant development that the federal government is framing as an opportunity to further develop Alberta’s energy sector, diversify Canada’s economy and reduce dependence on the United States.
The two leaders are signing a memorandum of understanding that lays out how Ottawa will facilitate the construction of a pipeline that will transport one million barrels of oil a day from Alberta’s oilpatch to an export terminal on the Pacific coast, where that product will be shipped primarily to Asian markets.
The agreement emphasizes that this pipeline will be privately built and financed, unlike the publicly owned Trans Mountain, and the intention is to have some Indigenous co-ownership.
Ottawa is set to designate this pipeline as a “national interest” project, triggering powers under C-5, the Building Canada Act that the Carney government passed in June.
That designation means the pipeline (and possibly the tankers associated with transporting the oil) could be exempt from some federal laws. These include the Fisheries Law, the Species at Risk Law and the Impact Assessment Law, among others.
Canada is committed to “working with Alberta to provide a clear and efficient approval process for the Alberta bitumen pipeline.”
Importantly, Alberta promises to “work with British Columbia to ensure that British Columbians share substantial economic and financial benefits from the proposed pipeline.”
Once some Indigenous consultation and negotiations take place with BC, Alberta, as the current proponent of this pipeline, will submit its plan to the Major Projects Office (MPO) for an expedited review by July 1, 2026.
If approved by the MPO, “Canada confirms that it will allow the export of bitumen from a strategic deepwater port to Asian markets, including if necessary through an appropriate adjustment to the Tanker Moratorium Act,” the agreement reads.
According to an Alberta official who spoke to reporters at a briefing, the intention is to begin work on this project by 2029.
Federal Government to Suspend Clean Electricity Regulations and Proposed Cap on Oil and Gas
Ottawa will also suspend the proposed federal oil and gas emissions cap and Alberta’s requirements under the Clean Electricity Regulations (CER).
But the two sides are committed to raising the price of industrial carbon in the province, raising it from the current $95 a tonne to a minimum of $130 a tonne. The federal government had previously demanded that the price rise to $170 a ton by 2030.
Both sides say they are committed to the goal of net-zero emissions by 2050, despite the memorandum of understanding that has the potential to boost conventional energy production.
To help achieve that goal, both Canada and Alberta are moving forward with Pathways Plus, an Alberta-based carbon capture, utilization and storage project, which could reduce the emissions intensity of the province’s tar sands exports.
The two sides are also agreeing to dramatically reduce methane emissions associated with the oilpatch – a 75 percent reduction target relative to 2014 emissions levels by 2035.
More to come
