Prime Minister Mark Carney and Alberta Premier Danielle Smith have signed a formal agreement that sets a timeline for the approval of a major oil pipeline to the west coast and introduces a new carbon pricing framework. The deal, signed in Calgary on Friday, builds on a memorandum of understanding reached last November.
Under the agreement, Alberta will submit a proposal to Ottawa's major projects office by July 1 of this year. The federal government will then have until October 1 to declare the project in the national interest. Final approval for construction must occur before September 1, 2027.
Investor Confidence and Mutual Benefits
Prime Minister Carney stated that the agreement is about building trust in a Canada that works, while Premier Smith emphasized that it sends a clear message to investors that the door is open for turning shared ambition into real projects, jobs, and results for Alberta and Canada.
Remaining Obstacles
Despite the deal, several challenges persist. No private sector proponent has come forward, the pipeline route is not finalized, consultations with First Nations are ongoing, and British Columbia remains a vocal opponent of the project.
Carbon Pricing Overhaul
The agreement also revises the industrial carbon price. The previous federal target of $170 per tonne by 2030 is replaced with a price of $130 per tonne by 2035. The current price of $95 per tonne remains for the rest of 2026, then rises to $100 per tonne from 2027 through 2030.
Both governments are focusing on the carbon capture megaproject proposed by Pathways, now renamed the Oil Sands Alliance, which federal officials say is a necessary condition for any future pipeline expansion. Additionally, Canada and Alberta will jointly issue 75 million tonnes of carbon contracts for difference to lock in fixed carbon prices, providing cost certainty for investors and businesses.
Earlier this year, the two governments reached deals on methane equivalency and environmental impact assessments. Premier Smith has pointed to these agreements as evidence that Canada and Alberta can work together on mutual interests, and she suggested the deal could undermine the province's separatist movement, which faced a court setback earlier this week regarding a secession referendum.
