The MOU
The charade and the pipeline
Nov 29, 2025
Last week I wrote a piece that said the Carney would avoid saying “NO” to a pipeline – that he would leave the decision to the Major Projects process and that as a result of that review, no pipeline was likely to ever get built. Having read the MOU that Carney signed with Alberta Premier Danielle Smith, I stand by that assessment although not too many people agree with me.
As I’ve said before, Carney is an introvert and play the long game. He wanted to get Alberta onside with a number of environmental objectives and this MOU achieves much of that including some specific emission goals and timelines.
The Federal government acknowledges “Alberta’s approach to regulating heavy electricity generation emitters through Alberta’s Technology Innovation and Emissions Reduction (TIER) program.” “The TIER system will ramp up to a minimum effective credit price of $130/tonne. The parties will conclude an agreement on industrial carbon pricing on or before April 1, 2026.”
Enter into a methane equivalency agreement on or before April 1, 2026, with a 2035 target date and a 75% reduction target relative to 2014 emissions levels.
These are both wins for the federal government.
Danielle Smith’s objective was primarily a bitumen pipeline to the BC coast but that will take years. But in the really short term, her United Conservative Party is meeting this weekend and she wanted to be able to show her redneck base that she can do the impossible – get the federal government to support Alberta’s energy plans. In the press conference surrounding the signing, Smith was positively giddy about the prospect.
I’ve been watching the news of the coverage of the UCP meeting this weekend and many in her Party are still not satisfied. Let’s call a spade a spade. To those rednecks it was never about the pipeline – it was straight up opposition to anything east of the Saskatchewan border.
But the media is full of stories that Carney has caved and that he’s “all in” on this oil pipeline to the BC coast. Most of the media is treating it as a done deal. But all that Carney has done is, as I said last week, support the process … and the process is set out in quite some detail, along with the criteria he has set out multiple times before: private sector proponent, agreement from affected first nations and other affected jurisdictions (provinces), net benefit to Canada, meet environmental standards, etc.
A number of those are a problem. A private sector proponent is unlikely given that the last pipeline to coast (TMX) was only completed because the federal government took it over and spent more than $30 billion to complete it. Also both the BC government and the coastal first nations have said “No Way”. A new pipeline through BC is likely dead in the water but an expansion of TMX is possible and is mentioned in the MOU.
I suspect that Smith is well aware of the long odds but that’s way in the future – her meeting with the party is this weekend. And Carney has been playing his part to the hilt complete with a rousing speech to the Calgary Chamber of Commerce which earned him a standing ovation. The media has bought the line – “Carney has gone right wing”; “Carney has abandoned his environmental credentials”.
However, the former Environment minister, Stephen Guilbeault, is not playing along – he has resigned from Cabinet. In the end Carney had to choose between Alberta and Guilbeault – and he chose Alberta. Cabinet solidarity would have required Guilbeault to support the Alberta charade and I suspect he was unhappy as Culture Minister in any case. He is staying in caucus where he will likely remain influential on environmental matters.
The MOU commits both Canada and Alberta to facilitate development of carbon capture technology and particularly mentions the $16.5 billion proposal by the Pathways Alliance – a consortium of six major Canadian tar sands oil producers. The project would connect more than 20 tar sands production facilities via a 400-kilometer network of carbon dioxide pipelines to a massive subterranean storage facility in the vicinity of Cold Lake, Alberta. The plan has been in the works for years but so far they’ve spent millions on advertising and not much more on actual development. Most environmentalists regard the plan as a mirage and Pathways was taken to court for greenwashing.
With the introduction of the federal government’s anti-green-washing amendments to Canada’s Competition Act last year, the Alliance removed all of the relevant content from their website and has remained largely silent as of September 2024.
The inclusion of the Pathways proposal in the MOU may in fact be an effort to smoke them out – put the proposal through an environmental review (necessary for the project to move forward).
The fact that the MOU ties the Pathways project to the approval of the pipeline suggests to me that their support for carbon capture is pretty soft given the unlikelihood that the pipeline will ever be approved.
The matter of the oil tanker ban along the west coast is particularly tentative:
If an Alberta bitumen pipeline is ultimately approved under the Building Canada Act and provides opportunities for Indigenous co-ownership and shared economic benefits, Canada confirms that it will enable the export of bitumen from a strategic deep-water port to Asian markets, including if necessary through an appropriate adjustment to the Oil Tanker Moratorium Act.
“A strategic deep-water port” could well be Vancouver if it’s a TMX expansion that is ultimately approved.
Most of the agreement is couched in similarly vague terms – “work cooperatively” is a phrase that is used repeatedly.
To be fair, this MOU can be read as greenlighting a new pipeline – as most of the media, the BC government and native groups have interpreted it. My positive interpretation is based largely on my assessment of the personalities and backgrounds of the principal players.
