Prime Minister Mark Carney and Alberta Premier Danielle Smith were in Fort McMurray, Alta., on Thursday to announce that a proposed oil pipeline to the West Coast had been designated a project of national interest.Todd Korol/The Canadian Press
Ottawa designated a proposed pipeline to the West Coast from Alberta a project of national interest on Thursday, the starting point for what will likely be intense consultations and negotiations with Indigenous communities along the route, with some First Nations leaders already voicing concerns about the plan.
Prime Minster Mark Carney made the announcement on a frosty morning in Fort McMurray in northern Alberta – the heart of the oil sands – alongside Premier Danielle Smith and Indigenous leaders from various communities in the region, including Treaty 8 Grand Chief Trevor Mercredi.
It marked the first official designation of a project of national interest under the Building Canada Act, which provides an accelerated pathway through regulatory approvals with the support of the federal government. The legislation is a marquee element of Mr. Carney’s economic agenda and while the government has begun the process of listing other projects in the national interest, none have yet made the list.
The next step for the pipeline – now called Pacific Link – is a federal review to finalize the conditions of the project. The review will include consultations with stakeholders about the project’s ownership, Indigenous rights and environmental protections.
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The process will be led by Ottawa’s Major Projects Office with support from the Canada Energy Regulator, Mr. Carney said Thursday. The MPO aims to finalize conditions for the pipeline by Sept. 1, 2027, leading to a construction process and the pipeline being operational by 2032. Its expected price tag is between $35.2-billion and $43.7-billion.
Faster approvals for major projects have been a focus for Mr. Carney’s government. Major infrastructure builds have been “weighed down by well-intentioned but arduous and often duplicative regulatory processes” in recent years, he said.
“In a more volatile, dangerous and divided world, speed, certainty and predictability are competitive advantages,” the Prime Minister said. “Canada will remain a country of high standards, but high standards do not require slow decisions.”
However, Terry Teegee, Regional Chief of the British Columbia Assembly of First Nations, said many affected nations in the province were disappointed with the abbreviated consultation process that led up to the MPO decision.
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“The average pipeline lasts 25 years, maybe 50 years, maybe longer. It’s going to last for generations, and I think we shouldn’t take it lightly,” Mr. Teegee said.
He acknowledged there is both support and opposition to the project among the 130 Nations along the pipeline route, but said “there needs to be adequate time for consultation,” and to allow First Nations to have free, prior and informed consent.
The Coldwater Indian Band, in B.C., also criticized the speed at which Ottawa listed the new pipeline, particularly because the community was in a wildfire-induced state of emergency during the MPO’s feedback period this summer.
“There is anger in our community today,” Vice-Chief Michael Smithers said in a statement. “The Crown’s duty to consult and accommodate Coldwater remains unfilled.”
Mr. Carney and Ms. Smith meet with Indigenous chiefs and energy workers in Fort McMurray, Alta., on Thursday.Todd Korol/Reuters
Pacific Link is a key part of Mr. Carney’s suite of policy changes that aim to reset federal relations with Alberta and diversify Canadian exports away from the United States. It would carry one million barrels of oil a day to the coast, allowing Alberta oil to access more international markets and garner higher prices.
In less than three weeks, Albertans will vote in a referendum on whether they wish to remain in Canada or start the legal process toward holding a second, binding independence vote.
Ms. Smith said Pacific Link’s designation underscores how much the relationship between Alberta and Ottawa has changed over the past year.
“There’s always going to be issues where we might have some disagreement. But the approach that I’ve seen the Government of Canada take is one where they genuinely want to identify problems and genuinely solve them,” she said.
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The pipeline would be majority publicly owned. Crown corporations Trans Mountain Corp. and the Alberta Petroleum Marketing Commission will form a new company with Pembina Pipeline Corp. PPL-T Pembina’s economic interest through construction would be 10 per cent, with the opportunity to acquire an additional 10 per cent once the pipeline is up and running. Indigenous communities would be offered a minimum 10-per-cent ownership interest through federal and provincial loan-guarantee programs.
Natural Resources Minister Tim Hodgson said discussions about Indigenous equity in Pacific Link would be “live and ongoing,” and informed by concurrent negotiations between Ottawa and First Nations communities around a 15-per-cent stake in the existing Trans Mountain system, which follows largely the same route as the new proposal.
Federal officials acknowledged there probably will be legal challenges to Pacific Link and its designation, but Mr. Hodgson said he’s confident the government is using best practices.
“What we see in pretty much any project these days, is somebody decides to challenge them. Whether they’ll be successful or not is a very different question,” he said.
Joe Dion, chief executive of the Western Indigenous Pipeline Group, which is vying for equity in the existing Trans Mountain pipeline system, said he didn’t think First Nations supported Pacific Link as a project of national importance yet, given there hasn’t been full consultations.
“We’re prepared to work with Mark Carney to make sure First Nations get their equitable share,” Mr. Dion said. “We know the urgency of these projects.”
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Mark Podlasly, the CEO of the First Nations Major Project Coalition, said he’s pleased that the government’s offer of 10-per-cent equity was a starting point and not a fait accompli.
“That allows Indigenous people to go further if they want, which is great,” he said in an interview, adding there has been a sea change in the way Ottawa approaches First Nations.
“Ten years ago, Indigenous people were not a thought in terms of the economic benefits that come from projects,” Mr. Podlasly said.
The five chiefs of the Athabasca Tribal Council met with Mr. Carney on Wednesday, ahead of the announcement. Chief Allan Adam of Athabasca Chipewyan First Nation, who is president of the council, said he went into the meeting with serious concerns “but left encouraged,” after the Prime Minister committed to meaningful consultation and co-development.
Various environmental groups pilloried the project listing Thursday, saying the pipeline would substantially increase greenhouse gas emissions and put billions of taxpayer dollars at risk.
The business community, however, largely viewed it as a positive move to help boost growth in Canada’s energy sector and bolster international trade.
Shares in Canadian oil sands producers, including Suncor Energy Inc. SU-T, Canadian Natural Resources Ltd. CNQ-T and Cenovus Energy Inc. CVE-T, all rallied after the announcement on Thursday, though oil prices gained sharply as well.
Editor’s note: A previous version of this article incorrectly stated that the plan is for the pipeline to be under construction by 2032. The plan is for the pipeline to be operational by 2032.