Carney's new Alberta oil pipeline deal already faces opposition

Nadine YousifSenior Canada reporter

Alberta Premier Danielle Smith and Prime Minister Mark Carney have signed a long-awaited agreement on a new pipeline

Canadian Prime Minister Mark Carney has signed a deal with the province of Alberta that opens the door for an oil pipeline to the Pacific - a project long pushed for by Canada's oil heartland but which faces significant hurdles.

The deal marks a historic reset between Alberta and Ottawa, but is opposed by British Columbia Premier David Eby, who has called the yet-to-be-built pipeline a "distraction".

The political challenges for Carney were later made clear with the resignation of a prominent cabinet minister and longtime environmentalist following the deal's announcement.

The energy accord exempts Alberta's proposed pipeline from some federal climate laws.

In exchange, Alberta must increase its carbon pricing and develop the world's largest carbon capture programme in a bid to reduce its overall emissions.

For Alberta, Thursday's deal is a "first step" to seeing its proposed pipeline become a reality.

Premier Danielle Smith said it signalled the end of "dark times" for her province, which she argued had long been hampered from developing its resources.

Carney, meanwhile, said he supports Alberta's project as being crucial for the country's economic development by helping sell more Canadian oil to Asian markets.

Eby expressed his frustration that his province was not included in discussions leading up to the agreement.

"It would have been good for BC to be at the table," he told reporters on Thursday. "No question about it."

He noted that the project did not have a private backer or buy-in from First Nations communities - both significant challenges to it being built.

Federal culture minister Steven Guilbeault announced on Thursday evening that he had resigned from Carney's cabinet, saying he is strongly opposed to the energy agreement and believed the pipeline Alberta was proposing "would have major environmental impacts".

Guilbeault previously served as environment minister and had worked for the global climate advocacy group Greenpeace before entering politics. He made headlines in 2001 for scaling Toronto's CN Tower as part of a climate campaign along with British activist Chris Holden.

He said on Thursday that he believed many elements of the climate action plan he implemented as environment minister "have been, or are about to be, dismantled".

In response, Carney said his government shared Guilbeault's "fundamental commitment to climate ambition and climate competitiveness for Canada".

Liberal minister Steven Guilbeault resigned from Carney's cabinet on Thursday over the energy deal with Alberta

The agreement signed by Carney and Smith exempts the proposed pipeline from a tanker ban off BC's coast, and commits to suspending a federal oil and gas emissions cap - a significant reversal from the policies of Carney's predecessor, Justin Trudeau.

It also spells out that the pipeline must have Indigenous co-ownership and be financed by a private company, not tax dollars.

The deal adds that both Alberta and Ottawa will bring British Columbia "immediately" into a discussion on the project.

The Alberta government is the main proponent for the project, pledging C$14m ($10m; £7.5m) to put together a proposal that the province hopes will later be taken on by the private sector.

The plan is in its preliminary stages with no firm route yet identified, though it is expected to run through to BC's northern coast, opening more access to Asia.

The US is currently the largest purchaser of Canadian crude oil, accounting for over 90% of exports, according to 2023 data by the Canada Energy Regulator.

Carney has said that Canada's economic ties to the US have become a vulnerability in light of protectionist tariffs implemented by US President Donald Trump, and that he aims to double non-US exports in the next decade.

In opposing the project, Eby has expressed concern that an oil pipeline through BC could risk sapping support from Indigenous communities on liquified natural gas projects his province is pursuing.

"The bottom line for us is that we need to make sure this project doesn't become an energy vampire, with all of the variables that have yet to be fulfilled," he said.

A group representing Coastal First Nations in BC said in a statement on Wednesday that an oil pipeline to the province's northern coast "will never happen".

Conservative leader Pierre Poilievre said the Ottawa-Alberta memorandum only kickstarted a lengthy process that does not ensure the pipeline's completion.

"This from a prime minister who promised during the election to move with 'unimaginable speed'," the opposition leader said.