Prime Minister Mark Carney unveiled a sweeping energy plan with the province of Alberta that paves the way for a new oil pipeline, a massive carbon capture project and the construction of nuclear power for data centers.
The plan is aimed at reducing Canada’s economic dependence on the US and is meant to “unlock the full potential of Alberta’s energy resources” while creating “hundreds of thousands of new high-paying careers for Canadians,” Carney’s office said in a news release.
The prime minister told a business audience in Calgary that Canada’s tight interdependence with the US — once a strength — is now a weakness. The country shipped more than 95% of its energy exports to the country last year, before President Donald Trump began slapping tariffs on Canadian goods.
“This is a rupture, not a transition, which means our economic strategy needs to change dramatically and rapidly,” Carney said. “Nostalgia is not a strategy. The US has changed. That’s their right. We must respond. That’s our imperative.”
The document pledges the federal government’s support for one or more new oil pipelines with Indigenous ownership that transport at least 1 million barrels a day of Alberta bitumen “with a route that increases export access to Asian markets as a priority.”
If the pipeline project goes through proper consultation, gets federal approval and has Indigenous co-ownership, the Canadian government will enable it to ship from a deep-water port on the west coast and “adjust” a ban on oil tankers on British Columbia’s north coast if necessary, the document says.
But the deal risks fracturing the unity of Carney’s Liberal caucus, which includes BC lawmakers as well as environmental advocates. Hours after the announcement, Steven Guilbeault resigned his cabinet position as Minister of Canadian Identity.
Guilbeault, a former Greenpeace activist, said he’s strongly opposed to the accord with Alberta because of numerous risks to the environment. It’s a political blow for Carney in the province of Quebec, which was crucial to his election victory earlier this year. Guilbeault was also his Quebec lieutenant.
It also promises to suspend or drop some federal environment regulations in exchange for a higher industrial carbon price and a timeline for building the C$16.5 billion ($11.8 billion) Pathways carbon capture project in Alberta’s oil sands. The document confirms Canada will not implement a cap on emissions from the oil and gas sector.
The plan promises both a nuclear power strategy and a data center strategy for Alberta, and to “significantly increase” electricity transmission connections between Canada’s western provinces. It commits to net zero emissions in the energy sector by 2050.
The document, styled as a memorandum of understanding, is meant as a “grand bargain” between Carney and Alberta Premier Danielle Smith on energy and climate policy, offsetting increased oil production with stronger commitments to industrial carbon pricing and clean power generation.
The agreement marks a significant leap forward in the relationship between Alberta and Ottawa, which was deeply strained under Carney’s predecessor Justin Trudeau — the architect of policies such as the tanker ban. The lack of infrastructure to ship crude to Asia is one of the grievances cited by Alberta separatists.
But it also sets up a battle with the western province of BC, where Premier David Eby and Indigenous groups have angrily attacked the prospect of a new oil pipeline running to the ecologically sensitive north coast. Eby said Thursday the proposal risks upending Indigenous support for billions of dollars’ worth of major projects, including liquefied natural gas investments, in his province.
“We need to make sure that this project doesn’t become an energy vampire with all of the variables that have yet to be fulfilled — no proponent, no route, no money, no First Nations support,” Eby said. “It cannot draw limited federal resources, limited Indigenous governance resources, limited provincial resources away from the real projects that will employ people.”
At the moment, there is no actual proposal in front of Carney’s government for building an oil pipeline through BC. Smith has blamed federal regulations for the lack of a private sector proponent, and instead tasked her provincial government with developing a detailed project pitch until the private sector is ready to take over.
Thursday’s document says the pipeline pitch will be ready by July, but also outlines a promise to “collaborate” with BC on sharing the economic benefits of the project. It foresees the potential use of loan guarantees to enable Indigenous co-ownership.