Some Liberal MPs question sustainability of Alberta energy deal touted by Carney

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Members of the Liberal caucus are concerned about the specifics of the energy deal Mark Carney will sign with Alberta on Thursday, sources say, even as the Prime Minister says it will have broad benefits for the country.

The memorandum of understanding is the culmination of weeks of negotiation between the two sides to achieve what Alberta Premier Danielle Smith has taken to calling the “grand bargain”: finding a way to ramp up natural resource development while supporting climate change goals.

For Mr. Carney and Ms. Smith, the MOU also formalizes a new relationship between the two levels of government, after the old one had cratered under the previous Liberal leader.

“The memorandum of understanding, it is about much more than one thing,” Mr. Carney told reporters after an announcement on supports for the steel and lumber sectors Wednesday.

“Fundamentally, it’s about building this economy, it’s about making Canada more independent, and it’s about making Canada more sustainable,” he said.

Carney briefs cabinet on Alberta energy deal to be unveiled Thursday

But some Liberal MPs were questioning Wednesday whether that’s possible.

Among the expected features of the MOU is an exemption for Alberta from clean energy regulations. They are a suite of measures enacted by the previous Liberal government aimed at curbing emissions and helping Canada transition to other sources of energy in the hopes of becoming net-zero by 2050.

Ms. Smith has blamed those regulations for stalling natural gas developments, and has long called for them to be removed, also arguing they violate provincial jurisdiction.

Three Liberals MPs briefed on elements of the agreement during caucus meetings Wednesday said there are concerns within caucus that removing the regulations undermines their party’s overall commitment to combatting climate change. While MPs are worried about the environmental impact, there are also concerns the approach could jeopardize donor and voter support.

The Globe is not naming the MPs because they were not authorized to discuss caucus deliberations.

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One of the MPs said they believe caucus may take their cues on how to respond to the MOU based on two key caucus figures: former environment minister Steven Guilbeault and current environment minister Julie Dabrusin.

Mr. Guilbeault was central to the development of the regulations, which are now up to Ms. Dabrusin to implement.

Neither has recently taken reporters’ questions on the pending deal, with Mr. Guilbeault previously saying he wants to wait to see the details.

Liberals are also watching for B.C. cabinet minister Gregor Robertson’s reaction.

When mayor of Vancouver, he argued against the Trans Mountain pipeline expansion, saying it was environmentally irresponsible, and went as far as asking for a judicial review of the government’s decision to approve it.

But one of the Liberal MPs and two other Liberal sources said Mr. Robertson is now trying to play peacemaker within caucus and tone down tensions.

Alberta pushes back on B.C.’s opposition to proposed pipeline

For B.C. Liberals, there is a particular sore spot: The deal is expected to pave the way for a new heavy oil pipeline from Alberta to B.C.’s northwest coast and exemptions to environmental regulations to support it.

The Alberta government has said it will put a pipeline proposal to the federal government by spring, though there is no company yet backing the idea.

Randy Ollenberger, oil and gas analyst at BMO Capital Markets, said there is no proponent because companies don’t know what the regulations are, and so there is no certainty around timeline or cost.

“Are you going to be subject to endless reviews, court challenges and so forth?” he said.

“Or is the constitutional mechanism going to be put in place that makes sure we don’t get tied up endlessly in the courts? I think you need that level of certainty.”

The Carney government has said numerous times in recent days that any new pipeline would have to have the support of the B.C. government as well as First Nations – neither of whom is showing any sign of being happy with the idea.

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Marilyn Slett, president of the Coastal First Nations-Great Bear Initiative, said the alliance of First Nations on B.C.’s north coast will never allow oil tankers in the area and that the pipeline project “will never happen.”

“We’ve been really clear about why. There is no technology that can clean up an oil spill,” said Ms. Slett, who is also elected Chief of the Heiltsuk Tribal Council.

Many Liberal MPs declined to get into their specific concerns with the deal when asked by reporters on Wednesday, while others – such as B.C. MP Sukh Dhaliwal – said they support Mr. Carney’s direction.

Calgary Liberal MP Corey Hogan said the moments before any details of a deal become public are always full of anxiety, but he thinks there is the potential for the deal to win widespread support in caucus.

“An MOU where Alberta and the government of Canada got on the same page in terms of meaningful action on methane, meaningful action on industrial carbon pricing, meaningful action on carbon capturing sequestration, would be incredible for the climate,” he said.

“I think that’s something that my B.C. colleagues would be very excited about.”

With reports from Emma Graney in Calgary and Andrea Woo in Vancouver