Prime Minister Mark Carney has made a new pipeline to the British Columbia coast a national priority.Jeff McIntosh/The Canadian Press
There is a negotiation maxim widely heard in trade talks that nothing is agreed until everything is agreed. By that measure nothing has been agreed between Ottawa and Alberta.
Prime Minister Mark Carney and Alberta Premier Danielle Smith wanted to make a show of signing a memorandum of understanding on energy and the environment, even though all the actual commitments are still TBD.
But politically: Wow.
The Liberal Prime Minister has made a new one-million barrels-a-day pipeline to the British Columbia coast a national priority. Alberta’s United Conservative Premier has made a long-term commitment to more stringent industrial carbon pricing to reduce emissions.
If both sides follow through on what is essentially a negotiating agenda for a real agreement, it will transform the prospects for Canada’s energy sector and its climate policy and internal politics.
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It calls for a new pipeline, on the condition that the oil industry builds a massive carbon-capture project to reduce oil emissions. It gets rid of the emissions cap and several other regulations that Ms. Smith called “bad laws” if Alberta raises its industrial carbon levy to $130 per tonne − much higher than it is now but less than the increase that was supposed to take effect under existing federal climate policy. That’s a groundbreaking compromise.
All Mr. Carney has to do is convince critics in his own Liberal Party, and Liberal voters, that it’s worth the tricky decisions still to come. All Ms. Smith has to do is convince Alberta conservatives. Oh, and probably British Columbia Premier David Eby and the First Nations that are adamantly opposed. Perhaps pipeline peace in our time is not quite at hand.
Already, Mr. Carney has lost a cabinet minister, Steven Guilbeault, the former climate campaigner who had lent activist cred to Justin Trudeau’s Liberals in Quebec.
A deal would be a compromise across a political divide and for Mr. Carney, the risks are inside his own house. The Liberals could lose B.C. seats. In Quebec, the Liberals could be hurt by Bloc Québécois accusations that Ottawa is supporting “dirty oil.” When former prime minister Justin Trudeau pursued a similar “grand bargain,” buying and twinning the Trans Mountain pipeline, it reaped no political reward. In Alberta, Ms. Smith’s conservative critics will say she accepted too much regulatory burden on the oil patch.
Still, the fact that both Mr. Carney and Ms. Smith wanted to announce the MOU now, even though they don’t yet have a binding agreement, showed that politically, they have something to gain.
Mr. Carney gets to claim he is mustering a common national purpose to build an independent Canadian economy. It undercuts his main rival, Conservative Leader Pierre Poilievre, who campaigned against industrial carbon levies, which are now effectively endorsed by Alberta’s conservative Premier. Ms. Smith was smiling warmly at Mr. Carney and calling it a great day for Alberta.
British Columbia Premier David Eby says Alberta’s proposed northern oil pipeline threatens to be an ‘energy vampire,'’ draining federal, Indigenous and provincial resources, while Coastal First Nations say they’ll mobilize their communities to stop tankers on the northern coast.
The Canadian Press
For Ms. Smith, it opens the possibility that she could be the Alberta premier who got another pipeline, even while the Liberals are in power in Ottawa. Or if it all falls apart, she can rail against Liberal betrayal.
The biggest obstacle comes from the objections of Mr. Eby and B.C.’s Coastal First Nations, who oppose a pipeline to the northwest B.C. coast and the lifting of the tanker ban that such a project requires. Mr. Eby described the tanker ban as key to First Nations support for several major projects, suggesting that lifting it would be like removing a Jenga piece that makes it all fall apart.
So it’s worth noting that the wording of the MOU signed Thursday allows for a way to work around that issue, quite literally. It called for a pipeline to Asian markets, without mentioning northwest B.C., so a compromise could conceivably be reached to instead triple the conduits of the now-twinned Trans Mountain pipeline to Burnaby, B.C.
Just imagine if that kind of compromise could be reached in a real deal, along the most ambitious lines of the MOU.
It would open the door to a pipeline and provide more efficient, stable carbon regulation that would make things predictable for investors. It would not reduce greenhouse-gas emissions by as much as the planned policies put forward in Mr. Trudeau’s tenure but it could make it unlikely that any future Alberta or federal government would scrap or weaken the industrial carbon pricing regime. All that would mean a national long-term approach that won’t whipsaw back and forth with every new government.
That would be a big deal. But Mr. Carney and Ms. Smith still need to convince their own supporters. For now, nothing has been agreed.