Alberta and the federal government have signed a memorandum of understanding that backs a privately financed oil pipeline to the British Columbia coast, while changing climate and regulatory rules for Alberta’s energy sector.
Signed in Calgary on Thursday by Prime Minister Mark Carney and Alberta Premier Danielle Smith, the agreement declares an Alberta bitumen pipeline to Asian markets a project of national interest and sends it to the new Major Projects Office under the Building Canada Act. The memorandum envisages capacity of at least one million barrels a day of “low emission” Alberta bitumen to a strategic deepwater port, in addition to the expanded Trans Mountain pipeline.
Under the text released by the Prime Minister’s Office, Alberta will act as the initial proponent and file an application with the Major Projects Office by July 1, 2026, while Ottawa and the province work to ensure project approvals are completed within two years.
Climate and regulatory trade-offs
The pact links any new pipeline to Pathways, a carbon capture, utilisation and storage network that both governments describe as a flagship project, with construction of the line and the carbon capture system treated as mutually dependent.
In return, Ottawa has agreed not to implement an oil and gas emissions cap and to immediately suspend the federal Clean Electricity Regulations in Alberta while the parties negotiate an industrial carbon pricing regime under the province’s Technology Innovation and Emissions Reduction system, as outlined in the MOU. That system will be strengthened so the effective carbon credit price for large emitters rises to at least 130 dollars a tonne, with details to be settled by April 1, 2026.
Smith called the agreement “a great day for Albertans,” saying it would help reverse what she described as “dark times” under the previous federal government and “unleash an amount of investment,” in remarks reported by the Toronto Sun.
Carney said the memorandum is “about much more than just a pipeline,” arguing it sets the stage for an industrial transformation centred on cleaner oil and carbon capture. At its core, he said, is a pipeline to Asia that would make Canada “stronger, more independent, more resilient, more sustainable,” and reduce reliance on the United States, which took 93 per cent of Canadian oil exports in 2024, according to CBC.
Tanker rules and B.C. opposition
The federal government has also signalled it is prepared, if a pipeline is approved, to enable bitumen exports from a strategic deep water port by making an “appropriate adjustment” to the Oil Tanker Moratorium Act, the law that restricts large oil tankers off the northern British Columbia coast, a concession flagged in both the MOU text and National Post reporting. That prospect has drawn opposition from Premier David Eby and coastal First Nations, who say they were not at the table and warn of spill risks.
Indigenous ownership and governance
The memorandum promises meaningful consultation with Indigenous Peoples and commits both governments to support Indigenous co ownership of the new pipeline through federal and provincial loan guarantees, using tools such as the Canada Indigenous Loan Guarantee Corporation and the Alberta Indigenous Opportunities Corporation set out in the agreement. Smith has stressed that the agreement “does not contain a veto” for British Columbia or any other party, while Carney has said the project can only proceed with a private sector proponent and “full partnership including equity ownership” for affected First Nations and the B.C. government, comments reported by CBC.
Reaction has been sharply divided. Business analyst Heather Exner Pirot praised the suspension of clean electricity rules and recognition of Alberta’s TIER system as key to attracting investment, calling the oil and gas emissions cap “as dead as a doornail.” Economist Jack Mintz welcomed Ottawa’s support for a West Coast pipeline but warned that higher carbon prices and decarbonisation requirements could still make new oil sands projects uncompetitive.
Stewart Muir of Resource Works said the agreement could ease one of B.C.’s most pressing economic constraints: a shortage of clean electricity. Rather than forcing the province to ration green power and scale back its own growth ambitions, he said the MOU’s combination of new interties and Alberta’s move toward nuclear generation could help backfill the shortfalls that threaten to stall major B.C. projects. “If Alberta brings nuclear onto its grid, that firm, low-carbon power strengthens the whole western system,” Muir said. “That gives B.C. room to grow without hitting the energy ceiling we’re facing now.”
Conservative MP Dan Albas has questioned why references to projects proceeding “without the consent” of British Columbia appeared in earlier government answers but not in the final text, which now speaks of “consultation and partnership” with Indigenous rights holders and the province, as reflected in both the PMO document and CBC’s coverage.
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