The Canada-Alberta agreement announced on May 15 shows a fearful lack of concern for the uncertainties and risks roiling energy markets today, and the many calls worldwide to reduce future economic risks by reducing dependence on fossil fuels. To believe that the future (2033 and beyond) demand for the world’s most expensive fossil fuel, Alberta bitumen, will make a new pipeline profitable is not only imprudent but also flies in the face of global business and political logic. The opportunity cost of forgone investments in renewables, so clearly now the energy sources of the near future, will be enormous.<\/p>\n\n\n\n
The November 27, 2025 MOU between Canada and Alberta reversed the November 4, 2025 budget commitment that using Carbon Capture and Storage projects (CCS) to increase oil production (“enhanced oil recovery”) would not be eligible for Investment Tax Credits. That reversal led directly to the resignation on principle of former Minister of Environment and Climate Change, the Hon. Steven Guilbeault.<\/p>\n\n\n\n
The fiscal update of April 28, 2026 (spring economic statement) explicitly completed that reversal.<\/p>\n\n\n\n
As November’s MOU was a low water mark for climate policy, it was unexpected that elements of that agreement were clearly stronger than the May 15, 2026 update.<\/p>\n\n\n\n
For example, the November 27, 2025 MOU stated: “Canada and Alberta remain committed to achieving net zero greenhouse gas emissions by 2050.”<\/p>\n\n\n\n
The May 15, 2026 update states a commitment only to “tangible progress toward net zero greenhouse gas emissions by 2050.”<\/p>\n\n\n\n
The November 27 MOU withdrew the promised oil and gas emissions cap in exchange for Alberta agreeing to ramp up to a minimum effective credit price of $130\/tonne by 2030.<\/p>\n\n\n\n
The May 15, 2026 MOU pushes that pricing back to 2040. It also introduces carbon market mechanisms that may prove useful in carbon pricing through so-called “Carbon Contracts for Difference.”<\/p>\n\n\n\n
Overall, where commitments are hardened since November 27, 2025, they are for expanding production and exports of bitumen from the oil sands, whereas commitments for climate goals and tools to reach those goals are weakened.<\/p>\n\n\n\n
Today’s 1,000-word MOU contains many specific commitments, including elements of the national electricity grid strategy, further expansion of nuclear energy and methane equivalency agreements.<\/p>\n\n\n\n
The May 15, 2026 agreement gives Alberta until July 1 to submit its specific proposal to the federal Major Projects Office, with Canada committing to designate it as a “project of national interest” by October 1, 2026. The pipeline would transport more than 1,000,000 barrels of oil per day, beginning construction as early as September 2027.<\/p>\n\n\n\n
As of now, the pipeline route is unknown, but we do know Alberta’s government wants the pipeline to cross northern B.C. and require a lifting of the ban on supertanker traffic through the hazardous waters of B.C.’s north coast.<\/p>\n\n\n\n
“If Canada’s prime minister cares about climate action, it is clear that Alberta’s premier is the more skilled negotiator. Over the last six months, Alberta has won more concessions from Canada. At this rate, Canadians may once again find a Liberal prime minister spending public funds to build an uneconomical pipeline, just as former PM Trudeau did. The reality of global capital is that investors are moving away from fossil fuels,” noted Green Party leader Elizabeth May. “While the PM cited International Energy Agency head Fatih Birol in his press conference, he notably omitted Birol’s warning that the days of fossil fuels are numbered. Our government is choosing to embrace Trump’s energy strategy, thus risking our economic and climate future.”<\/p>\n\n\n\n
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