Ottawa and Alberta – framing the “energy superpower” discussion

(Part One)

The relationship between Ottawa and Alberta involves much more than oil and gas – at its core is an intricate, convoluted dialogue respecting the country’s cooperation between regions and people. The dynamic Ottawa-Alberta partnership has taken on a new form with the re-election of the federal Liberals and their continued pursuit of green policies, and the increasingly vocal Albertans demanding Ottawa step back from its jurisdictional overreach that has been undermining the province’s resource development. Central Canadians misjudge this relationship, often devaluing Albertans’ demands as self-serving. Given the country’s current crises, it is high time for Canadians to better understand Alberta’s stand and appreciate exactly what is at stake.

There is presently a great deal to be hopeful for with this Ottawa-Alberta relationship, given prime minister Mark Carney’s repeated pledge to turn Canada into an energy superpower, and Alberta Premier Danielle Smith’s focus on doubling the province’s oil and gas production. Yet, this promise belies the fact that Carney’s ability to answer to Albertans’ aspirations will be one of the greatest tests of his federal government. How the Carney Liberals respond to Albertans and western Canadians will likely determine both the intrinsic strength of the nation as well as the economic growth and future prosperity of Canadians.

During the past decade, the Trudeau government closely aligned Canada’s economic growth strategies to global climate change objectives that are centrally planned by the United Nations (U.N.) and the World Economic Forum (WEF). In doing so, Ottawa has implemented an industrial strategy that is focused on transitioning energy use away from fossil fuels to renewables. It has been expressly an anti-oil and gas strategy. One of the most fevered champions of this “keep oil and gas in the ground” approach was Mark Carney, a man wearing many hats: the U.N. special envoy on climate action and finance, the WEF’s lead banker for the global financial alliance for net zero goals, and the special advisor on the economy and implementing a global environmental agenda in Canada for the Trudeau Liberals (and all of this while he was chair of the international mega-investment firm Brookfield Asset Management).

There is a heavy skepticism in Canada’s oil and gas sector and among western Canadians that Carney, as Canada’s PM, has so abruptly completed an about-face concerning his core beliefs on climate action and net zero goals. As David Staples of the Edmonton Journal states in his column, Mark Carney's new economic promises go against everything he values, “Carney — known as the single most influential figure in driving investors and financial institutions worldwide to adopt carbon policies — envisions a Canada where every single private financial decision and transaction is to be classified and regulated by a government elite.” Staples reminds us of Carney’s fondness for a top-down approach to environmental policy in his book Value(s) – and he underlines Carney’s anti-resource development observation, “In total, 80 per cent of fossil fuel reserves (75 per cent of coal, 50 per cent of gas, 33 per cent of oil) will need to stay in the ground, “stranding” these assets.”

In the weeks since he was elected PM, Carney’s cabinet selections and his commitment to carry forward environmental laws, regulations, and policies set by the Trudeau government leave many to doubt his intent. Moreover, the PM has surrounded himself with environmental zealots who hold strong biases against oil and gas development - Steven Guilbeault and the new Environment Minister Julie Dabrusin at the cabinet table, Marc-Andre Blanchard as his chief of staff, and Gerald Butts as well as Carney’s wife Diana Fox at the Eurasia Group. Carney has refused to repeal the no-more-pipeline law C-69 and the tanker ban, and refused to review the emissions cap regulations and the net-zero electricity regulations. It was noted by many that, within the government’s Throne Speech, King Charles talked around the notion of Canada being an energy superpower without mentioning either oil and gas, or pipelines.

Even though the signals from Ottawa suggest that the governing Liberals are fully committed to implementing net-zero policies and meeting the environmental goals set in the WEF and U.N. agendas for 2030 and 2050, Premier Smith still expresses optimism that she can work with PM Carney for the best interests of Albertans – and for the economic stability and greater prosperity of Canadians. On the first day after the federal election, Premier Smith congratulated PM Carney and called for an immediate reset of the federal-provincial relationship that had been so damaged by the Trudeau Liberals. The Premier publicly released her appeal to Carney:

“As Premier, I invite the Prime Minister to immediately commence working with our government to reset the relationship between Ottawa and Alberta with meaningful action rather than hollow rhetoric. A large majority of Albertans are deeply frustrated that the same government that overtly attacked our provincial economy almost unabated for the past 10 years has been returned to government. As Premier, I will not permit the status quo to continue. Albertans are proud Canadians that want this nation to be strong, prosperous, and united, but we will no longer tolerate having our industries threatened and our resources landlocked by Ottawa.”

Later in the week after meeting with her caucus, Premier Smith followed the congratulatory note up with a direct message to Albertans on the province’s negotiation plans with the federal government. The Premier issued a frank public statement: “After a decade of destructive Liberal-NDP policies that have cost us over half a trillion dollars in lost investment and hundreds of thousands of jobs, the time for real action has come. We are standing up for Alberta’s future with strength and resolve.” She telegraphed her government’s plans, which includes:

• pursuing a new “Alberta Accord” within Canada

• demanding guaranteed port access for Alberta energy and resources

• calling for the repeal of harmful federal laws like C69 and the emissions cap

• requiring Alberta’s consent on any export restrictions of our resources

• granting Alberta the same federal transfers as B.C., Ontario and Quebec

• launching the Alberta Next panel to explore long-term options for economic and constitutional protections from Ottawa

• preparing for a 2026 referendum on key proposals that emerge from these discussions

• defending Indigenous rights and Treaties without compromise

To further frame the federal-provincial discussion, the Premier wrote a lengthy five-page letter to PM Carney that provided nine specific issues that require immediate attention. Her message was straightforward: the Carney government must repeal the Trudeau-era anti-energy policies or it risks leaving $14 trillion worth of natural resources in the ground. She did not mince words in stating to the PM that there must be “a clear path to increasing oil and gas production so that Canada can achieve its full economic potential by avoiding the stranding of trillions of dollars of energy assets in Alberta.”

The premier’s nine issues requiring federal government action include many long-standing irritants:

1. Guarantee Alberta unfettered corridor and port access to tidewater off the Pacific, Arctic and Atlantic coasts for the international export of Alberta resources.

2. Repeal the no-new pipelines law C-69 that will respect provincial jurisdiction and reduce red tape for pipeline and resource infrastructure.

3. Lift the tanker ban off the coast of B.C. to permit exports from the Port of Prince Rupert.

4. Eliminate the unconstitutional and industry-killing oil and gas emissions cap, which is a production cap.

5. Scrap the federal “Clean Electricity Regulations.”

6. End the prohibition on single use plastics.

7. Eliminate the net-zero mandate and associated power regulations.

8. Return oversight of the industrial carbon tax to the provinces.

9. Repeal the federal censorship laws on energy companies publicly reporting their environmental efforts.

Many of the Premier’s issues were also concerns expressed by the leading oil and gas sector CEOs in their open letter to PM Carney that urged the federal government to “Build Canada Now.” The CEOs stated, “The time is now to take action, signaling to the global investment markets that Canada is ready to move forward with achieving our shared vision of Canada as a leading global energy superpower.” They requested the government simplify regulations like the west coast tanker ban, commit to firm six-month deadlines for project approvals, eliminate the emissions cap, and eliminate the industrial carbon tax as well as set more realistic carbon regulations, and support Indigenous co-investment resource development projects.

PM Carney and the newly appointed Energy Minister, Tim Hodgson, received these explicit messages from western governments and business leaders in stride and they responded with a can-do attitude. In the last few weeks, both the PM and energy minister met with oil and gas executives, and Carney met with Smith in what has been described as a positive meeting. Carney expressed a desire to work in partnership with the oil and gas industry to find ways of boosting economic growth that might mitigate the damages being caused by the trade war with the United States. Minister Hodgson delivered a well-received speech to Calgary Chamber of Commerce – “Together – Let’s Build” – that called for bold action in the oil patch and provided the promise to fast-track infrastructure projects.

PM Carney also called a first ministers’ meeting to begin the talks with premiers on a new working relationship that will eliminate internal trade barriers and spur on the building of critical infrastructure across the country. At that meeting Carney promised to identify a shortlist of nation-building projects that the first ministers could begin to focus on, however in the end he tabled a new federal approval process for infrastructure projects.

Carney suggested to the premiers that the federal government is committed to building a new pipeline to ship more oil to foreign markets and he also spoke of a desire for green investments in the oil and gas sector to “de-carbonize” the product and reduce the industry’s environmental footprint. Premier Smith quickly picked up on the PM’s quid pro quo offering and she stated that a “grand bargain” of a rapid approval of a new pipeline to the west coast alongside the green investments into oil sands technology would be the start of a promising energy game plan for Canada.

Postscript

Premier Danielle Smith’s reasoned argument for a pipeline

In the media conference to wrap up the first ministers’ meeting last week, Alberta Premier Smith was asked why she is fond of tying the issue of an oil pipeline to national unity. Smith spoke of Canadians’ lost opportunity for wealth generation as a result of past failed pipeline projects in western Canada.

“You have to understand just how damaged Alberta is by the fact that we didn’t get pipelines built. If we had built Northern Gateway, if we built Keystone and Energy East we would have 2.5 million barrels more per day of production, which is $55 billion a year worth of GDP value, which is worth $17 billion to my government alone and about an equal amount to the federal government. So, this is not just an ideological argument. It is no just a minor disagreement. Oil is by far the most valuable export for Canada. Any of the projects you will see on the ultimate list [of nation-building projects], I will tell you that a bitumen pipeline will be by far the greatest benefit to all of Canada. That’s why we are going to continue to push for it because it’s just a good project, it’s good for our country. There’s $9 trillion worth of value in discoverable and achievable reserves right now. And so why would you leave that in the ground? No other country in the world would and we shouldn’t either.”

In a subsequent interview on the Candice Malcolm Show, Premier Smith repeated the tremendous cost to Canadians of the failed pipeline projects, and then she provided a promising prospect.

“Maybe we [Albertans] have been a little too stoic than we should have about how unfair and unreasonable it was. But we are not being stoic and silent any more. We are saying this is our time. That we need to get another pipeline built to tidewater if we are genuinely interested in getting our markets expanded we can’t keep sending everything to the United States. We have to build a pipeline to the west coast of a substantial nature so that we can continue to develop the Asian markets. Ideally we will also get a pipeline to Churchill so that we would be able, with icebreakers move up and over to feed the east coast refineries as well as get to Europe. That’s what nation-building projects look like. We work together for our mutual benefit. That’s the spirit that I am approaching this with and I think that is the spirit that the other premiers are approach it with as well.”

Watch the full interview between Candice Malcolm and Premier Smith.

Next week: Processing the gritty details of this “grand bargain”

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The article was published this morning in The Niagara Independent. The By George Journal version above includes additional text, quotes, and links to source media materials, as well as the postscript.

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