GREEN: Smith and Carney agree to build a very public pipeline

Kenneth Green is a senior fellow with the Mathison Energy Research Initiative at the Fraser Institute.In a celebratory press conference the day after Canada Day, Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a major advancement of the Canada-Alberta Memorandum of Understanding first forged in late 2025, regarding the province’s long-expressed desire to see a pipeline built to the West Coast, allowing greater access to lucrative markets in Asia. There’s no question the project offers many potential economic and employment benefits to Alberta’s economy and Canada more generally. There’s also no question that the project is being misrepresented as a public-private partnership, but is, in reality, almost entirely a government project.According to the agreement between Alberta and Ottawa, the Alberta Petroleum Marketing Commission (a provincial Crown corporation), the Trans Mountain Corporation (which is owned by the federal government) and Pembina Pipeline Corporation (a private company) “will be responsible for the Project’s development costs and management of associated risks and liabilities that may arise during construction and operations of the Project.” The agreement also promises unspecified but “meaningful Indigenous equity participation.” Again, while pitched as a broad public-private partnership, the plan is anything but. It’s a public infrastructure project with a side-helping of private-sector involvement, most notably in the ancillary “carbon capture” and underground storage project (known as “Pathways”), which is a federal precondition for the project. Pembina will only contribute to the project’s commercial and technical success by “leveraging its expertise in contracting, budgeting, engineering, and construction, as well as Indigenous engagement.”Nevertheless, the various political actors will no doubt secure coveted policy goals. Alberta, it seems, will get its million-barrel-a-day pipeline to carry its oilsands product to a port on the Pacific Ocean, at the cost of having to implement a vast untested carbon capture and underground storage program that could make the cost of production of Alberta oil less competitive (or non-competitive) on the global market against producing jurisdictions (Venezuela, for example) that require no carbon storage..Canada’s federal government, meanwhile, gets to see Alberta brought to submission on a raft of its own priorities, such as Ottawa’s new near-universal electrification of everything strategy, the idea of mandating carbon capture to produce “decarbonized oil,” and, of course, the expansion of carbon-emission rationing as a component of Alberta’s economy via a higher industrial carbon tax.Meanwhile, the British Columbia government gets to force Alberta to take the longest possible route to connect two points on a map with a pipeline, while potentially profiting from its share of the project. Specifically, BC looks to land billions of dollars to upgrade the Robert Banks terminal in Delta and score another $3 billion for the George Massey Tunnel replacement project.But before the celebrations grow too exuberant, it’s worth repeating — this is not a private initiative of market actors taking on both risks and potential profits. It’s essentially now public infrastructure where taxpayers bear the cost and risk for “profits” interpreted as government revenue. In fact, the new pipeline might be seen as proof that in Canada’s overloaded regulatory state, private-sector sponsorship for nation-scale projects may be impossible. If the federal government’s purchase of Trans Mountain was an emergency measure, the new plan makes that merely precedential. The expansion of government control of infrastructure like this — whether needed in this case or not — opens the door to endless dysfunctional governmental schemes, including the proliferation of expensive nuclear power plants, rent- and price-controls of property (or massive market buy-outs, like the condo deal in BC), high-speed rail initiatives, overbuilt (and underperforming) renewable power generation, or worse. Because it’s the government sector, not the private sector, potential risks or losses (particularly longer-term) are no deterrent to action. Only private-sector actors are so constrained.The new pipeline may be a success in some way — it will likely generate profits and employment for Canada’s economy from a valuable Canadian natural resource. It’s not, however, a signal that Canada can build big things again — at least not in the private sector. Canada’s federal and provincial governments certainly can. But private-sector actors — those who built Canada in the past — need no longer apply. Kenneth Green is a senior fellow with the Mathison Energy Research Initiative at the Fraser Institute.

GREEN: Smith and Carney agree to build a very public pipeline

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