The governments of Alberta and Canada have reached a new agreement aimed at moving a proposed west coast oil pipeline closer to approval while also reshaping the province’s industrial carbon pricing system. According to Postmedia, the deal was signed Friday in Calgary by Alberta Premier Danielle Smith and Prime Minister Mark Carney, building on a memorandum of understanding the two leaders signed last November.
The agreement sets a clear timeline for the pipeline approval process. Alberta is expected to submit a proposal to Ottawa’s major projects office by July 1, while the federal government would have until October 1 to decide whether the project is in the national interest. Final approval for construction is expected before September 1, 2027, according to the terms of the deal.
Carney said the agreement is focused on building trust and showing that Canada can move major projects forward. Smith said the deal sends a message to investors that Alberta is ready to turn ambition into real projects, jobs, and economic results. For the province, the agreement represents a major step in its long running push to secure additional pipeline access to the west coast.
Several major challenges still remain. A private sector company has not yet stepped forward to lead the pipeline project, the route has not been finalized, consultations with First Nations still need to be completed, and British Columbia remains strongly opposed to the idea of a new oil pipeline to the coast.
The agreement also makes major changes to industrial carbon pricing. Instead of the previous federal plan that would have required a carbon price of $170 per tonne by 2030, the new deal sets the price at $130 per tonne by 2035. The current price of $95 per tonne will remain in place for the rest of 2026 before rising to $100 per tonne next year and staying at that level through 2030.
The Pathways carbon capture project, now known as the Oil Sands Alliance, remains central to the discussions between Ottawa and Alberta. Federal officials have said carbon capture remains a necessary condition for any future pipeline expansion. In the meantime, Canada and Alberta will jointly issue 75 million tonnes of carbon contracts for difference, which are designed to give businesses and investors more certainty around future carbon prices.
The deal also connects to Carney’s broader energy plan, including his recent pledge to double Canada’s electricity grid capacity by 2050 as part of the country’s long term push toward net zero energy. Meanwhile, Ottawa’s clean electricity regulations remain before the courts, with both governments agreeing that if the regulations are struck down, they will be withdrawn. If they are upheld, the two sides will negotiate an equivalence agreement.
The agreement could have political implications as well. Smith has pointed to the deal as proof that Alberta and Ottawa can work together on shared economic priorities. It also comes as Alberta separatist efforts face legal setbacks, giving the premier a chance to argue that cooperation with the federal government can still deliver results for the province. For more Canadian political and economic coverage, visit Weekly Voice and the Weekly Voice Canada section.
