Carney and Smith sign carbon deal clearing path for Alberta pipeline

Pipeline breakthrough: Carney and Smith agreed on a carbon pricing framework, unlocking progress toward a planned 1‑million‑barrel‑per‑day oil pipeline to Canada’s Pacific Coast.



Price path compromise: Alberta’s carbon price will gradually rise to C$130 per tonne by 2040, a slower pace than environmentalists wanted but lower than Trudeau’s earlier goal.

Conditions remain: The pipeline’s approval hinges on carbon capture projects and Indigenous consultations, with a proposal due to Ottawa’s major projects office before July 1.

Carney and Smith sign carbon pricing pactA compromise on carbon pricing targetsPipeline plans and conditionsPolitical and public reactions


Carney and Smith sign carbon pricing pact
Prime Minister Mark Carney and Alberta Premier Danielle Smith signed an industrial carbon pricing agreement in Calgary, removing a political obstacle to a proposed crude oil pipeline to British Columbia’s northwest coast. The agreement will increase Alberta's carbon price to C$100 per tonne next year and to C$130 by 2040, with incremental rises thereafter. Carney framed the deal as part of a broader effort to expand energy exports to Asia and reduce economic reliance on the United States, while also meeting climate policy conditions. 

A compromise on carbon pricing targets
The deal scales back the faster carbon price hikes set under former Prime Minister Justin Trudeau, who had targeted C$170 per tonne by 2030. Environmental groups argue the 2040 timeline delays necessary emissions cuts, while some oil executives remain wary of competitiveness issues against the U.S., which lacks a national carbon price. The agreement includes escalating price floors to encourage emissions reduction investment, while aiming to maintain industrial competitiveness. 

Pipeline plans and conditions
The proposed 1‑million‑barrel‑per‑day pipeline could begin operations in September 2027 if conditions are met, including a major carbon capture and storage initiative. Alberta plans to submit a formal proposal to Ottawa’s major projects office by July 1, though no private sector builder has yet committed. Carney emphasized that legal obligations to consult Indigenous communities must be fulfilled before any construction can proceed. AFP + 2


Political and public reactions
Opposition leader Avi Lewis criticized the announcement as a capitulation to the oil and gas lobby, while environmentalists sought faster emissions reductions. Some Indigenous groups and First Nations have expressed opposition to any pipeline route from Alberta to the Pacific Coast, adding another potential hurdle. The deal comes amid heightened Alberta separatist sentiment, with Carney stressing the province’s ability to prosper within a united Canada.


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