Prime Minister Mark Carney and Alberta Premier Danielle Smith met in Calgary on Thursday to sign an energy agreement that includes a pledge for a new pipeline to the West Coast.Jeff McIntosh/The Canadian Press
Prime Minister Mark Carney likes to talk about how we are living through a hinge moment, an inflection point in the arc of global history. The sweeping entente between Ottawa and Alberta unveiled on Thursday represents just such a hinge moment on a domestic scale: a welcome, wise and overdue rethinking of pipeline, energy and climate policy by the federal Liberals and, to a lesser extent, the United Conservative provincial government.
The most obvious example of the policy pivot by the Carney Liberals in the memorandum of understanding published on Thursday is the stated commitment to a new oil pipeline to the Pacific, and onward to Asian markets as part of a wider expansion of Alberta’s oil and gas production.
That is an acknowledgment of a changed world, one in which Canada must act decisively to reduce this country’s economic dependence on the United States. A world in which demand for crude will rise through to at least mid-century. And a world in which Canadian oil can displace production from anti-Western regimes.
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Yes, there are asterisks appended, including the need for private investment for a pipeline (a sensible provision). But there is no doubt about the seriousness of Ottawa’s intent, as witnessed by the rollback of Trudeau-era climate policy.
The emissions cap on oil and gas production is scrapped. Clean electricity regulations are to be scrapped as well, once Ottawa and Alberta agree to more stringent provisions for the province’s industrial carbon pricing system. “Greenwashing” provisions are also gone. And the ban on tankers off Canada’s west shores will be subject to “appropriate adjustments” for a pipeline project that allows for Indigenous communities to benefit, including through co-ownership.
Each one of those changes is significant. Together, they amount to a repudiation of the overly rigid and ideologically fervent approach of the Trudeau government in favour of a measured pragmatism that strikes a more sensible balance between growth, national security and climate goals.
Even before one foot of pipeline is laid, the about-turn on climate policy signals that Ottawa understands the need to bolster investor confidence in Canada’s energy sector.
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Part of that welcome signal comes in the memorandum’s description of how – not if – discussions over a pipeline will proceed. There is no veto for British Columbia or Indigenous bands, a reflection of settled law and common sense.
Gone is the Trudeau-era mantra of “free, prior and informed consent” from Indigenous communities, a notion that was completely at odds with Canadian jurisprudence, which stipulates a duty to consult with Indigenous peoples and, in some cases, accommodate their interests.
The memorandum spells out the obligation to “consult with, and where appropriate accommodate, Indigenous Peoples” and goes on to commit the federal and Alberta governments to “early, consistent, and meaningful consultation.”
Pair that with the imperative to give Indigenous communities a direct stake in a new bitumen pipeline and you have a negotiating framework biased toward success and shared prosperity.
There is new thinking on Alberta’s part as well. An explicit commitment to tie expansion of oil production to carbon capture, and a strengthening of industrial carbon pricing, including a much higher target price for emissions, are both significant changes.
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The gains from the memorandum are potentially huge, but the political dangers are not slight. Alberta Premier Danielle Smith has made commitments to Ottawa that she will need to fulfill. More significant, the onus now falls on the province to find private capital willing to build a pipeline. And Ms. Smith will now need to show that co-operation benefits Alberta more than endless confrontation.
Mr. Carney faces the tougher test. An Angus-Reid opinion poll released Thursday indicates a large majority of Canadians, 60 per cent, supports a new oil pipeline to the Pacific Coast, including 53 per cent of British Columbians. But opposition to a pipeline is highest in B.C., at 37 per cent. Some Indigenous communities have already signalled their opposition. And the resignation of Steven Guilbeault from cabinet underscores the potential backlash from the Liberals’ left flank.
It is undoubtedly a risk to assert the national interest over parochial and political concerns. But Canada’s future is worth that risk. The Prime Minister is to be commended for seizing this hinge moment.