The Alberta and federal governments have finalized a sweeping energy agreement that lays out a timeline for a new Indigenous co-owned oil pipeline to the West Coast and dramatically overhauls industrial carbon pricing—a deal both sides say will unlock billions in investment while avoiding a steep rise in industry costs.
Announced on Friday, the implementation agreement flows from the Alberta–Canada Energy Memorandum of Understanding (MOU) signed last November. It commits Ottawa to designate the proposed pipeline a project of national interest by Oct. 1, 2026, to begin design and construction as early as Sept. 1, 2027.
The pipeline would carry more than one million barrels of oil per day through a strategic port to Asian markets, breaking Canada’s near-total reliance on the United States as a customer.
“This agreement sends a clear message to investors and global partners that Canada and Alberta are serious about expanding market access,” Alberta Premier Danielle Smith said in a statement. “The door is open, and it's time to turn shared ambition into real projects, jobs and results”
The federal government, in the joint announcement, echoed that tone. “Today's agreement reinforces that Alberta and Canada are lands where the opportunities are plentiful, the rules are clear, and one project means one review” the Prime Minister said said.
Carbon price rolled back, future increases capped
At the heart of the agreement is a substantial revision to industrial carbon pricing. The deal prevents the federal carbon price from hitting $170 per tonne by 2030—the previous trajectory—and instead caps it at $130 per tonne by 2035, with annual increases of 1.5% thereafter to 2040. The price remains at $95 per tonne for the rest of 2026, then rises to $100 from 2027 through 2030.
The changes apply to large emitters under Alberta's Technology, Innovation and Emissions Reduction (TIER) system and come with sector-specific adjustments for oil and gas and electricity. A market price floor for TIER credits will also be introduced in 2030 to stabilize the carbon market.
The province estimates the new path will save industry roughly $250 billion by 2050.
Industry groups welcomed the certainty. Nancy Southern, chair and CEO of ATCO Ltd., called it a “rare moment” that “reflects the scale of ambition required for future.” Mark Poweska, president and CEO of ENMAX, as an electricity sector representative, said the framework provides the clarity needed to double generation capacity by 2050.
Environmental concerns and political reaction
Opposition parties and environmental organizations were quick to criticize the deal. NDP Leader Avi Lewis issued a blistering response on social media, calling the announcement “the Carney government's official surrender to the oil and gas lobby.”
“By gutting carbon pricing to the point of irrelevance, it has dismantled the last federal climate measure standing,” Lewis wrote. “We now have a federal government that no longer even pretends to rein in big corporate polluters.”
Lewis accused the government of “locking us into more pipelines, more fossil fuel dependence, and more handouts for some of the richest corporations on earth,” noting the oil and gas sector is expected to make $90 billion in profits this year alone. He also charged that the government is “flooding the zone with sweeping changes all at once, bulldozing public debate, Indigenous consultation, and environmental protection along the way.”
“None of these giant changes make our country more secure, independent, or stable. None of them directly address the cost of living crisis,” Lewis wrote. “All of them promise corporate welfare for the billionaire class, and more hardship for the 99%.”
Despite the criticism, the agreement marks a significant step in the ongoing realignment of federal-provincial energy policy, with both governments betting that expanded pipeline access to Asia and a more predictable regulatory environment will attract the capital needed to grow Alberta's energy exports.
