Prime Minister Mark Carney has reached a landmark agreement with Alberta that could pave the way for a new oil pipeline to the Pacific, a long-sought project by Canada’s oil heartland. However, the deal already faces significant political and environmental hurdles.
The agreement represents a historic reset between Alberta and Ottawa, but British Columbia Premier David Eby has criticized the pipeline as a “distraction” and expressed frustration at being excluded from the initial negotiations.
The deal exempts Alberta’s proposed pipeline from certain federal climate regulations. In return, Alberta commits to raising its carbon pricing and developing the world’s largest carbon capture program to reduce emissions. For Alberta, the accord is seen as a “first step” toward realizing the pipeline, with Premier Smith calling it the end of “dark times” for the province.
Carney emphasized the project’s economic importance, highlighting its potential to increase Canadian oil exports to Asian markets. Yet Premier Eby noted that the pipeline currently lacks private investment and support from First Nations communities, which are critical to its progress.
The political fallout was immediate. Federal Culture Minister Steven Guilbeault, a former environment minister and longtime environmental activist, resigned from Carney’s cabinet in protest. Guilbeault criticized the deal for undermining key elements of Canada’s climate action plan and warned of the pipeline’s potential environmental impacts.
Carney responded by reaffirming his government’s commitment to both climate ambition and economic competitiveness. The deal requires the pipeline to have Indigenous co-ownership and private financing, rather than relying on public funds. It also commits Alberta and Ottawa to bring British Columbia into discussions “immediately.”
The Alberta government has pledged C$14 million ($10 million) to develop a proposal, which it hopes will later attract private sector investment. The pipeline’s route remains preliminary but is expected to reach BC’s northern coast, providing greater access to Asian markets. Currently, over 90% of Canadian crude oil exports go to the United States, highlighting Canada’s dependence on its southern neighbor.
Carney has stressed that diversifying exports is essential, noting protectionist measures by the US under President Donald Trump. He aims to double Canada’s non-US exports in the next decade.
Opposition to the project remains strong. Premier Eby warned that the pipeline could threaten support from Indigenous communities involved in BC’s liquefied natural gas projects. Coastal First Nations have stated that a pipeline to the northern coast “will never happen.” Conservative leader Pierre Poilievre added that the agreement merely begins a long approval process without guaranteeing construction.
The Alberta pipeline deal highlights the complex balancing act between economic growth, environmental protection, and Indigenous rights in Canada’s energy policy.