CALGARY — The federal and Alberta governments have unveiled a sweeping new energy agreement that includes a target date of September 1, 2027 for construction approval on a BC coast oil pipeline designed to move more than one million barrels of Alberta oil per day to Asian markets.The agreement, announced Friday in Calgary by Prime Minister Mark Carney and Alberta Premier Danielle Smith, also commits both governments to major changes in the industrial carbon tax system, electricity policy, environmental approvals, and federal regulations affecting Alberta’s energy sector.Under the deal, Alberta will submit a formal proposal for the pipeline to the federal Major Projects Office by July 1, 2026, with Ottawa pledging to pursue “project of national interest” designation by Oct. 1, 2026.Smith said the agreement demonstrates Alberta and Ottawa are serious about building major infrastructure and expanding global market access for Canadian energy.“Alberta is ready to build, invest, and partner, but we cannot afford to lose another decade,” Smith said in a statement."The door is open, and it’s time to turn shared ambition into real projects, jobs and results for Alberta and Canada.”.Carney described the agreement as part of building “a stronger, more sustainable, more prosperous future for all.”"Our agreement with Alberta is about building trust in a Canada that works," he said. The agreement states the intent is to have all permissions necessary in place so pipeline design and construction can begin as early as September 1, 2027.The proposed pipeline would transport Alberta bitumen to a West Coast port for export to the Asian marketplace and is being framed by both governments as a strategic move to reduce Canada’s reliance on the United States as its primary energy customer.Government officials also indicated the goal is for the pipeline to begin operating by 2033 or 2034 if the regulatory process proceeds according to plan.“It's in all of our interests to ensure that the economics of the pipeline can be appropriate and profitable for proponents and for the benefits that would come for First Nations as well,” one official said.However, questions remain over whether a private-sector proponent is already in place or whether a deal is in the works.One government official said on Friday that Alberta was currently focused on “de-risking” the project by working through regulatory requirements and consultation obligations with First Nations in both Alberta and BC..'WE STILL SHARE A VISION': Minister says Ottawa, Alberta aligned as MOU talks enter critical phase.Officials stated Alberta will continue to work with the federal Major Projects Office while exploring “a variety of interests” from parties interested in participating in the pipeline project.They also said Alberta would continue collaborating with both Ottawa and the BC government to ensure all requirements tied to the submission and approval process are met.The announcement marks one of the most significant federal-provincial energy agreements in years and signals a dramatic shift in Ottawa’s approach toward Alberta’s oil and gas sector under Carney’s government."I've been an environmentalist my career," Carney said. "UN special envoy on climate action. Those last two words, climate action. This is climate action. This is investment. This is moving forward."As part of the agreement, Ottawa has committed not to proceed with a federal oil and gas emissions cap, while also placing the federal Clean Electricity Regulations into abeyance in Alberta.The agreement also outlines a new industrial carbon tax framework under Alberta’s Technology Innovation and Emissions Reduction (TIER) system.While previous federal policy would have required industrial carbon pricing to rise to $170 per tonne by 2030, the new agreement caps the price at $130 per tonne by 2035, rising gradually afterward.Alberta’s government says the revised framework will save industry approximately $250 billion by 2050.The agreement states the carbon price will remain at $95 per tonne through 2026 before increasing to $100 beginning in 2027 through 2030. By 2035, the price would reach $130 per tonne before rising 1.5% annually to 2040.Ottawa and Alberta also agreed to jointly issue 75 million tonnes worth of Carbon Contracts for Difference aimed at supporting emissions-reduction projects and creating investment certainty in carbon markets..The broader agreement also includes commitments to expand Alberta’s electricity grid, pursue nuclear and geothermal development, support renewable energy investment, and build electricity infrastructure capable of supporting AI and data centre projects.The pipeline project itself is tied closely to the proposed Pathways carbon capture project backed by major oil sands companies."I'd like to reiterate, there won't be a pipeline without pathways, and as I've already said a couple of hours ago, everything's interconnected," Carney said. According to the agreement, the Pathways project is expected to reduce emissions by 16 million tonnes annually while generating $16.5 billion in GDP, $12.2 billion in labour income, and up to 43,000 jobs per year.The agreement also includes a federal-provincial commitment to streamline environmental reviews and pursue a “one project, one review” approach for major projects in Alberta.Speaking at a press conference later in the day, Smith was asked by the Western Standard if she thought the carbon tax could possibly make the project look less appealing to a private proponent.Smith argued the industrial carbon tax system differs significantly from the former consumer carbon tax, saying it has existed in Alberta in various forms since 2007.“You will not see this [tax] on your diesel or gasoline or any of your fuel bills. You will not see it on your own heating bill. The federal government got rid of that with a lot of pressure from us, other provinces, and of course the federal Conservatives,” she said..Smith added the tax applies only to facilities emitting more than 100,000 tonnes annually and argued it has helped drive technological innovation by rewarding companies adopting lower-emission technologies. She also acknowledged industry concerns over Ottawa’s previous plan to raise industrial carbon pricing to $170 per tonne by 2030, calling that level “way too high.”“I can tell you $170 by 2030 was way too high, which is why we froze it this year,” Smith said.“We’ll do some more industry consultation, but the early feedback we’re getting from industry is that they believe this slower ramp-up is going to be manageable for the companies that are going to be exposed to it.”Several business and energy leaders have welcomed the new agreement.Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, said the agreement provides the certainty industry needs to spend capital on major projects and comes at a pivotal time for Canada’s economy and global energy markets.Nancy Southern, ATCO CEO, echoed the sentiment, adding Canadian industry must now “rise to the occasion.”“From Confederation onward, Canadian industry has been central to nation-building, translating government ambition into reality,” Southern said.“Moments such as this are rare. Today’s announcement reflects the scale of ambition required for future generations.”
