Front Burner - Hatchet buried? The politics of an Alberta energy deal

Episode Date: November 26, 2025

On Thursday Prime Minister Mark Carney and Alberta’s Danielle Smith are set to announce the outlines of a plan that could set Alberta and B.C. on a collision course.It’s a potential energy deal that would give Alberta special exemptions from federal environmental laws and offer political support for a new oil pipeline to the B.C. coast, among other things.That is, if Alberta can get through the significant hurdles of opposition from First Nations and B.C. where Premier David Eby was completely cut out of the talks.Today we discuss the politics of all this with the CBC’s chief political correspondent Rosemary Barton and Jason Markusoff from our Calgary bureau.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Hey, everybody, I'm Jamie Pousson. So earlier this month, Prime Minister Mark Carney was giving this interview on stage at the Canadian Club, which bills itself as this forum for thought leader. in the country. And Carney is asked if a pipeline is in the works with Alberta, and he says this. Don't worry. We're on the pipeline stuff. Daniel's on line one. Don't worry, it's going to happen. But, well, something's going to happen. Let's put it that way. Well, that something is now happening. On Thursday, Carney is scheduled to stand a depressor with Alberta Premier Daniel Smith and announced this energy deal in the form of a memorandum of

understanding that is, among other things, expected to help clear a path for a pipeline to the BC coast. That is, of course, if Alberta can get through the significant hurdles of First Nations and BC opposition, where Premier David Eby was completely cut out of pipeline talks. And they also need to find a company to build it. There isn't one yet. My colleagues, Jason Marcosoff, out of Calgary, and Rosie Barton out of Ottawa are here. And we are going to discuss the politics around this coming agreement with Ottawa and how it sets Alberta and BC on a collision course. Hi, Rosie. Hi, Jason. Hey, Jamie. Hey, Jamie. Hello. It's really great to have you guys. So let's start with this energy deal that is going to be announced officially on Thursday, or a road to an energy deal. Rosie,

what do we know through various sources about what it is going to say? Yeah, I mean, I'll start by saying that it's right that you characterize it as an energy deal because it is not just an agreement to build a pipeline. I'm sure that a lot of headlines will be talking about a pipeline, but it is bigger than that. And it's going to lay out sort of some of what Alberta has to do to get an easing of what Premier Smith calls the nine bad laws, the laws that she thinks stand in the way of the energy sector. A lot of the language from what we understand will be something like this. If Alberta does X, Y, Z, Ottawa will do ABC. So it's hard for me to tell you how that's all going to shake out, but I can tell you some of the things that we are reporting

will be in it. There will be a new industrial carbon pricing regime that Alberta will have to adopt. That would then trigger, from what we understand, Ottawa to remove the net zero clean electricity regulations. There will be a multi-billion dollar investment in carbon capture and storage that the project, the Pathways Alliance, that I'm sure Jason knows much more about. There will be, and this was signaled in the budget as well, a removal of the cap on oil and gas emissions. There could be a limited exemption to the existing ban on oil tanker traffic off British Columbia's northwest coast. And there will be some sort of language around the new, need for indigenous equity or ownership and some sort of engagement or support from British

Columbia in order to get to a pipeline to British Columbia. And what is it, what do we know about what it says specifically about the pipeline itself, like a route, for example? Yeah, I mean, it is largely, I'm not going to say exactly the same route as as as a northern gateway. It is on the northwest coast of British Columbia, a place where there has long been an understanding that British Columbia doesn't want a pipeline.

So I don't know that you'll get sort of a clear picture of where the pipeline's going to go. I think instead you'll get a commitment that if all these things fall into place, if Alberta can do all these things to improve the fight against climate, change and get First Nations on side largely and deal with British Columbia's opposition, the federal government would then, for instance, remove or exempt the tanker ban on that coastline so that a pipeline could be built. Okay. And I know we're going to get into what a heavy lift that's going to be.

But just first, this agreement or this memorandum of understanding, as they're calling it, Is there any kind of like precedent for a deal like this between a province and the federal government? I mean, in some ways, the major projects office that we've been talking so much about is a little bit like this, right? It's an agreement with a province about a project that already has a backer, usually, a company, to facilitate and speed up a project. So in that way, there are sort of smaller versions of this. popping up all across the country. And in fact, Alberta, of course, doesn't have one of those projects yet. So this is in part to address this. But listen, Ottawa regularly comes to kind of deals with provinces on things. I would say that the best comparison would probably be many things that have been done between Ottawa and Quebec, whether it be on immigration, for instance, whether it be on language protections, whether it be on funding for dealing with refugees. So there are some similarities, but I think this is, and again, we'll see what the language is, but I think it's pretty unusual for other provinces to have it, and I'll

be happy to hear more from Jason on this, but it is also a remarkable turn of events for Alberta and Ottawa to have reached any kind of understanding about the future of the energy sector and is a complete and total change from what we saw under the previous Prime Minister. Jason, let me bring you in here. How do you think Premier Daniel Smith is feeling about this at the moment is, is this what she's been wanting from the federal government? This is the culmination. of a long time push for her. And I don't think it's one that we could have foreseen her having with Justin Trudeau, the former prime minister, the person who brought in the oil and gas emissions

cab, the person brought in the clean electricity regulations, the person who legislated this oil hanker ban on the North BC coast. These were all policies that he'd put in place to strike as he saw the balance between energy and the environment. I mean, the ironic thing is that when You're asking Rosie about which, what precedent is there? I actually think back to the last pipeline that Alberta got, which, in fact, was in a different era, Trudeau and then Premier Rachel Notley in the middle of last decade, where he did, he rejected the Northern Gateway, this Northern Coast, B.C. pipeline. He rejected the Energy East pipeline, but he did approve the Trans Mountain Pipeline down to the lower mainland. The Prime Minister interrupted an international diplomatic trip to deal with a domestic political feud,

throwing the might and the money of the federal government behind Alberta to get a pipeline built to the BC coast. The Trans Mountain Pipeline Expansion is a vital strategic interest to Canada. It will be built. I am quite confident that the nature of the conversation that we are having at this point will get the job done. get the job done. And in exchange for that, he also got from the Alberta government an agreement

to keep the industrial carbon tax going up at a certain steady level. That seemed like a different era. It seems like through these outlines of this deal, what the Mark Carney government is basically saying is if you make this pipeline far less problematic, if you remove the or ease the resistance from environmentalists because of emissions, if you remove the resistance from BC and the coastal First Nations, then you can get a pipeline. Daniel Smith might announce this on Thursday as we're getting a pipeline, but Carney and other liberals may perceive this more as here is the roadmap to a pipeline. Hello, I'm Jess Milton, host of the podcast backstage at the Vinyl Cafe.

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And let's start with BC Premier David Evey and the province of B.C. Eby was apparently taken very off guard last week when Newsle. leaked that Ottawa and Alberta were close to this deal. And Rosie, what have we heard from me on this? Yeah, I mean, I think off guard and also, frankly, deeply frustrated that he was not part of the conversation. This is not something that would happen to other provinces in the Federation. I don't know why the thought was that it would be okay for it to happen to British Columbia.

But regardless, I was very clear that my expectation is that Gloucels. forward, that British Columbia would be at the table and that we're able to... He will be going forward. That is, in fact, that will be sort of outlined in the agreement. But he did speak to the Prime Minister on Monday, and he went through sort of his main concerns, one that First Nations need to have a say of how this is going to unfold. Coastal First Nations consent and support is required for this conversation. He talked about, of course, that the tanker ban and the dangers of

transporting oil on that north coast, which is something that is really important to very many British Columbians. A heavy oil spill will decimate a $1.7 billion industry of fisheries and tourism and a way of life for people in the Northwest that have been living that way of life for a millennia. And he talked about how that, and this I think is a really important and interesting point, how that tanker ban has also built a consensus. for development of other projects. And by that, I'm talking about liquefied natural gas,

LNG plants, that the Premier has had actually now another one approved by the major projects office. And he believes that that tanker ban and the equity deal that they've reached with Coastal First Nations is part of the reason that they've allowed that project to go ahead. Alberta is indifferent to, the legal rights of the Coastal First Nations and their rights and title in the area. I'm sure they are not indifferent to the fact that Coastal First Nations support for major projects

like Solism's LNG, LNG, Canada, Phase 2, expansions to the Port of Prince Rupert, all of which involve the transport of products, including products from Alberta to Tidewater, that Coastal First Nations support is required for those too. So that is also, he believes, hanging in the balance. Right. He's saying essentially that these, the coastal first nations might pull their support for these other projects. Exactly. And just you mentioned the danger for the tanker ban, just for people listening. I think it's because the waters off of that coast are very rough, right? And the idea is that these boats could capsize and there could be an oil spill. That's really the concern that people. Yeah. And then that it's a very narrow space, I think, is the other issue. It's not as, it wouldn't be as easy as it sound. Yeah. I know that BC currently has a large number of.

projects on the major projects list with the federal government. It's like disproportionate to other provinces. Ottawa is also set to unveil a new softwood lumber aid project. And do you think will any of this kind of soften the blow here? I don't know and I don't think so. Yeah, you're right. That softwood package could come as early as this week, perhaps even on Friday, which would be interesting timing to say the least. I think a couple of things. things. Premier E.B. knows very well that British Columbia doesn't have a veto on the project. If the federal government wants it to happen, it has jurisdiction and ability to allow it to happen. And there is some polling that suggests that some more British Columbians than you might think would be in favor of the

pipeline, though they don't tend to live in the area where the pipeline would go through. And I think that Premier E.B. is very conscious of the Coastal First Nations. You know, I talked to Maryland Slet, the chief of the Hetzluck nation and president of the Coastal First Nations on Sunday, and this is an absolute

no-go. We've been very clear that we don't support this project. We've called upon the federal government to uphold the tanker man. Our position is not a new position. It's been in place for many decades. And this is

our home, we rely upon a healthy ocean to sustain our way of life. So I don't know how they get past those two roadblocks. I don't know what the Premier of Alberta says to those opponents to convince them. I'm not sure what that is. Jason, in anticipation of this announcement, E.B. and the BC government were clearly trying to get ahead of it, right? like they spoke about their opposition to it, but they also are like putting forward this alternative, right? Their support to add capacity on a pipeline that we already have, the Trans Mountain Pipeline, and doing this would add, I think, 360,000 million more barrels of oil a day to the market.

BC is also saying that they could dredge this bridge that would allow for other types of ships to make it into the harbor, right? And people like the CEO of the Trans Mountain Pipeline, they're saying, we should do this right now. We should put more capacity into the TMX pipeline and then reevaluate whether we need a new pipeline from there. And why is this not enough for Daniel Smith? Or do you think that she could bite on this? I mean, I think it could be well that she might bite on this in that she'd like to see it happen. but that doesn't mean that she's not going to still want more.

I mean, this is one of the things that's animating Daniel Smith in the Alberta government right now is that they have big ambitions to expand the oil sector. They've talked about doubling the production in the oil and gas sector. That seems almost mind-boggling given how many more megaprojects. We would have to be how many more oil sands operations. But that is what they're going for. And, of course, if you're going to be expanding your oil production capacity, you need to ship it out. You need to send it places.

And that's where pipelines come in. I mean, Danielle Smith seems to have manifold ambition in terms of where pipelines go. I want to see pipelines in all directions. Northeast, Southwest. There's lots of other, lots of proposals that are on the table, including. She still wants one down to the U.S. She still wants one to Churchill or something in Manitoba, maybe something in Ontario. There are proposals that could potentially see us transport oil to Thunder Bay and then out through the St. Lorna Seaway, as well as oil by rail, going all the way to Nova Scotia and Sydney.

But because Danielle Smith doesn't want to be told no on any pipeline, certainly not this one, the one that she and a lot of the industry seems as the easiest one, doesn't sound like they'll be placated by that at all. Rosie, before you were talking about how this would essentially be up to the premier to make this happen, this very difficult task. And, you know, I think in many ways the federal government is kind of getting out of the way or clearing their path here. But I imagine that this will also create quite a bit of blowback for Carney himself, right? And what are the liberals at risk of losing? And BC in terms of support here. So I would point out that we kind of did go through this with TMX, right? There was a fear that liberals would lose seats because of that with the liberal MP, Terry Beach, for instance. It never happened. He won his seat again. So I say that, you know, with the understanding that there may be seats in jeopardy,

But there may, and there may also be people inside caucus who are not happy. Stephen Gilbeau, the former environment minister, now the minister of essentially heritage, said, you know, I think before we start talking about building pipelines, we need to talk about what you and Jason were just talking about maximizing capacity. Jonathan Wilkinson, another former minister under Justin Trudeau, said, there needs to be significant support. It doesn't necessarily have to be unanimous. It wasn't in the case of Trans Mountain, but there needs to be significant support. And at present time, I don't think there is. Here's what I would say.

If the deal has a very big climate fighting component that Alberta will lock into and that the prime minister can point to as a demonstration of how Alberta is now largely on the same page is the federal government when it comes to fighting climate change, that could go some ways to, I think, reassuring people inside his caucus, reassuring where his electoral base is, which is in Quebec, and reassuring potentially voters in British Columbia. I would also say that it's important to remember that there is no proponent. There is no one chomping at the bit to build this thing.

They might emerge after this announcement, but for now, they're not there. And so I do think it's worth asking the question, is this real? Like, is this a real thing that's going to happen? Not the deal itself, but is the idea of this pipeline real? Or is this just a way to improve relationships for both of these leaders and for both of them to be able to say, look what I did? And maybe the pipeline never happens. I mean, I realize I'm putting all this speculation out there, but it just seems to me that getting to the pipeline is going to be incredibly hard.

But doing all the things leading up to the pipeline could be very, very helpful for a prime minister who is also interested in dealing with climate issues. Right. You're saying that it's very possible that at the end of this, there is no pipeline, and that won't. necessarily be the fault of the federal government, but that the federal government could also get some climate wins out of this. Yeah, it's not, from what we understand, again, the conditions that are going to be set out to change the way Alberta deals with climate change, whether it be the Pathways Alliance, whether it be the industrial carbon price, those things are going to happen with or without the pipeline. Those are the steps the Alberta government must take in order to get to a pipeline. So whether the pipeline happens or not, there will potentially be some environmental

wins here for the federal government. And Jason, final word to you here, just how you think this is all going to play for, could play for Daniel Smith. It could play in a couple different ways, while Alberta is pretty solidly in favor of this pipeline. So people will be broadly pleased about this, even some people who are pushing for stronger environmental performance for Alberta, will be happy with that. Danielle Smith will be happy that she's been able to deliver something that had been elusive that certainly had eluded her predecessor, Jason Kenney, and a lot of premiers under Justin Trudeau's leadership.

The question is how it plays with her base. This weekend is the United Conservative Party Convention, and she seemed like she wanted to deliver it for that partisan base, that partisan base that has become increasingly frustrated with Ottawa, with liberal prime minister, doesn't matter if it's Mark Carney or Justin Trudeau. The base, of course, as we've been talking about over the last several months, has developed these separatist leanings. And I'm going to be very curious to see how it plays with that group. Broadly speaking, Alberta will be pretty satisfied with this.

Any tensions that Ottawa is broken, Ottawa can't deal with Ottawa. Alberta will be eased by this. But for those hard-line separatists, those hard-line Albertans who do not trust Mark Carney or the liberals or basically anybody out of water, one Alberta took on its own, they might see this as just a piece of paper, no guarantee, stuff to be broken. And we're giving up a whole lot on our end. Daniel Smith has spent so many months talking about referenda to get out of the Canada pension plan or the, the R-CMP. I'm not sure if she's going to be able to put all that toothpaste back in the tube and sell them on a memorandum of understanding, which some of the people, or on the separate side, we're already saying, is just a memo.

Okay. Guys, this is really helpful. Thank you so much for this. Have you to help. Thanks, Jamie. All right, that's all for today. I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow.