NEMETH / WALLACE: Will a net-zero straitjacket enable Canada to become an energy superpower?

Tammy Nemeth is a UK-based energy analyst. Ron Wallace is a Calgary-based energy analyst and a former Member of the National Energy Board.Prime Minister Mark Carney’s January 2026 Davos speech highlighted a “rupture” in the global order, a vision that defined a new role for middle powers like Canada. Subsequently, after securing a much-coveted majority, he made an open call welcoming policy ideas and recommendations from Canadians. For more than a year, we’ve set out, repeatedly and in detail, concrete steps needed to restore Canada’s energy sector. If the Prime Minister is serious about engaging with Canadians, the Government of Canada should carefully consider the repeal of rules that prevent the growth of homegrown Canadian energy.The damaging energy policies enacted during the “lost decade” of the Trudeau government have been followed by a steady stream of announcements by the Carney government of consultations, MOUs, and “frameworks.” Regrettably, amid these promises to make Canada the “world’s leading energy superpower,” precious little actual reform has occurred. Instead, the federal government has continued to interfere in provincial jurisdictions while layering new rules on top of old ones and carving out special exemptions to manage political fallout. There are legitimate questions about whether this approach will encourage market confidence or strengthen national unity.Most of what has passed for energy policy in Ottawa has been central planning, not market economics, with measures that invite litigation, rather than certainty. As a result, new investment in Canada collapsed between 2015 and 2024, and Canada experienced the largest capital exodus in its history. An estimated $1 trillion of investment capital departed Canada for other jurisdictions, while roughly $150 billion in energy and resource projects had been delayed or cancelled by 2020. The RBC Economics & Thought Leadership analysis (RBC Growth Project) attributed this exodus to “burdensome regulatory, permitting and project delivery barriers.” In the past decade, industrial proponents have expended hundreds of millions of dollars in a complex Canadian political, legal, and regulatory environment, only to face final decisions reached behind closed doors with undisclosed rules and standards. It remains to be seen whether the Major Projects Office will alleviate these concerns or continue Ottawa’s policy of central planning..For Alberta’s oil and gas sector, the much-touted Memorandum of Understanding (MOU) increasingly looks like anything but a breakthrough. Instead of certainty, it offers conditions and caveats, costly and unproven industrial decarbonization targets, approvals that hinge on the consent of indigenous leaders and British Columbia, and the continued existence of the federally imposed and strict methane emissions rules. An energy superpower should prioritize affordability, reliability, and export potential over a single emissions trajectory. However, the Canadian Net-Zero Emissions Accountability Act remains a major economic barrier, with rigid legal processes for setting targets but no enforceable duty to achieve the actual reductions. The 2030 Emissions Reduction Plan imposes unrealistic targets that disregard Canada’s strengths in hydrocarbons, hydro, and nuclear generation while driving up costs for families and industry. The Clean Fuel Regulations, layered atop provincial regimes, add unnecessary costs and complexities with little real benefit. At the same time, the Clean Electricity Regulations represent a clear violation of provincial constitutional jurisdiction under Section 92A. Additionally, Bill C-48 (the Oil Tanker Moratorium Act) remains as a substantial barrier to market access for Western Canadian oil to tidewater. While the recent 2026 Canada–Alberta Methane Equivalency Agreement, one that requires a 75% methane reduction by 2035, allows Alberta to use its own methane regulations instead of federal CEPA methane rules, it is estimated that the costs of compliance will approach $14.6 billion. .Ottawa’s recent announcement of intentions to transform the country’s electricity system is yet another example of a centrally planned energy future for Canada in which a forced adoption of energy policies is proposed to include wind, solar, batteries, and EVs with supply chains that largely originate outside Canada. These policies ultimately erode national security, undermine economic growth, and cede strategic leverage to foreign powers. Canadians should not be forced to trade affordable, reliable domestic energy for intermittent sources that rely on foreign minerals and manufacturing. When the federal government overreaches with sweeping national targets, it undermines local decision-making, creates regulatory confusion, and invites costly delays.The path forward to Canadian energy superpower status will require the federal government to focus on technical mandates, not activist theatre, while respecting provincial jurisdiction over natural resources and building the infrastructure needed to connect Canadian energy to global markets. Canada’s prosperity depends on a system where private investment, local knowledge, and market signals drive decisions — not ministerial edicts or politically motivated carve-outs. In short, let the market, not Ottawa, decide which technologies and projects deliver economic and strategic value. Tammy Nemeth is a UK-based energy analyst. Ron Wallace is a Calgary-based energy analyst and a former Member of the National Energy Board.

NEMETH / WALLACE: Will a net-zero straitjacket enable Canada to become an energy superpower?

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