Carney backs West Coast pipeline in win for Alberta and oil industry

Carney backs West Coast pipeline in win for Alberta and oil industry

Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a climate and energy agreement on July 2, 2026, that paves the way for a new oil pipeline to the West Coast. The project aims to transport one million barrels of Alberta-produced oil per day to Asian markets, reducing Canada's economic dependence on the United States.

The pipeline will largely follow the existing Trans Mountain corridor, running from Bruderheim, northeast of Edmonton, to the southern British Columbia coast. Prime Minister Carney stated the route is the gateway to the world’s fastest growing markets and affirmed that the project will respect the Oil Tanker Moratorium Act, keeping the ban on tankers off northern British Columbia's coast.

The Alberta government will act as the project's proponent, submitting a proposal to the federal major projects office by July 1. If the federal government designates the pipeline as a project of national interest by Oct. 1, construction may commence as early as Sept. 1, 2027. An official indicated the pipeline could begin carrying oil no later than 2033 or 2034.

Partnerships and Economic Impact

The project is structured as a public-private partnership. The federal government, via the Trans Mountain Corporation, and the Government of Alberta will share equal partnership, with a meaningful equity stake reserved for Indigenous Peoples. Pembina Pipeline Corporation will serve as a private sector investor. While the governments' stakes are intended to catalyze further private investment, neither leader specified the amount of public money currently committed to the project.

Combined with the Pathways carbon capture project, the pipeline is expected to create approximately 175,000 new jobs across Alberta, British Columbia, and the rest of the country. Premier Smith noted the project would generate tens of billions in federal and provincial revenues and is essential for her goal to double Alberta's oil production to eight million barrels per day over the next 10 to 15 years.

Climate Commitments and Carbon Pricing

The agreement links the pipeline to the Pathways project, a carbon capture and storage initiative involving the Oil Sands Alliance. The two projects are described as mutually dependent. However, the goals for Pathways have been reduced; the project now aims to capture six megatonnes per year by 2035, targeting an overall reduction of 16 megatonnes by 2045, down from an initial goal of 62 megatonnes by 2050.

The deal also establishes a plan for Alberta's industrial carbon emissions price. The effective market price will rise to $130 per tonne by 2040, while the headline price—paid to the Alberta government for emissions reduction technology—will reach $140 by the same date. This is lower than the national target of $170 per tonne by 2030. Premier Smith called the carbon fee a pretty big concession on our part, noting she would have preferred a price around $50 a tonne.

Prime Minister Carney dismissed criticisms from the Canada Climate Institute and the Pembina Institute, who argued the deal undermines clean energy and net-zero targets. Carney asserted that the written commitment to reach net zero by 2050 more than compensates for any emissions increase from the pipeline.

Political Tensions and Federalism

The agreement arrives amid brewing separatist sentiment in Alberta, where voters will decide in October if they want to hold a referendum on leaving Canada. Premier Smith praised Carney's approach to co-operative federalism as a departure from the policies of former Prime Minister Justin Trudeau.

The project faced immediate criticism from British Columbia Premier David Eby, who claimed the federal government was rewarding bad behaviour in response to Alberta's separatist threats. However, Eby acknowledged that B.C. Does not have the authority to stop a new pipeline and noted that Carney has committed to compensating the province for environmental risks. On the same day, Carney also announced a cooperative prosperity agreement with B.C. To fund liquefied natural gas and mining projects.

Opposition leaders offered diverging views. Conservative Leader Pierre Poilievre criticized the pace of the pipeline build and called for the removal of the industrial carbon price. NDP Leader Avi Lewis described the agreement as an official surrender to the oil and gas lobby.

Next Steps

• Immediate: Consultations with Indigenous representatives will begin.
• July 1: Alberta to submit the pipeline proposal to the major projects office.
• Next Week: Prime Minister Carney is scheduled to meet with Premier Eby to discuss the project's way forward.
• October 1: Deadline for the federal government to designate the pipeline a project of national interest.
• October: Alberta voters decide on a potential referendum regarding secession.