Unruly Ducks

What will it take Premier Danielle Smith to get them all in a row?

Contributed by Robert Lyman © 2025. Robert Lyman’s bio can be read here.

Executive Summary

The Agreement in Principle reached by the governments of Canada and Alberta in November 2025 set out four near-term goals, or “deliverables”, each of which required follow-up federal-provincial agreements. For Premier Smith these are the four “ducks in a row” that she must somehow prepare for and align.

They included: an agreement with the federal government on a carbon pricing regime for large Alberta industrial emitters of greenhouse gases (GHG); an agreement with the federal government on project impact assessment; an agreement with the federal government on reducing methane emissions from the oil and gas industry; and a tripartite agreement among Alberta, Canada and the industrial sponsors of the Pathways project. Premier Smith set a fifth goal, or duck in the row, which was to submit a formal application for a west coast oil pipeline before the end of June, 2026.

While the November agreement referred to a number of goals for future agreements, it did not specify what the parties would actually do to fulfill those agreements’ objectives; it was an agreement-in-principle to talk more later. Detailing what exactly is to be done is proving to be far more difficult than announcing promising outcomes.

By April 1, 2026, Alberta and Canada agreed to conclude an agreement on a carbon pricing regime for large Alberta industrial emitters that will raise the effective credit price to $130 per tonne of carbon dioxide equivalent by 2030. The continuation of ever-rising carbon taxes on large industrial emitters, including major oil and gas producers and electricity generators, will impose a large cost burden on Canadian industry that will not be matched by any of our major trading partners – the United States, China and Mexico. These costs will largely be passed on through energy prices to Canadian consumers.

On March 6, 2026, the federal and Alberta governments announced an agreement in principle to work together more cooperatively with respect to the regulatory reviews of proposed energy projects, with the goals of eliminating duplication and streamlining assessment. The agreement, while desirable in terms of process, does not change any of the criteria that must be applied by the federal government in assessing the impacts of projects under the Impact Assessment Act or the Canada Energy Regulator Act. The Impact Assessment Agency of Canada (IAAC) must take into consideration eleven factors in conducting its assessment; these include “the extent to which the designated project contributes to sustainability” and “the extent to which the effects of the designated project hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments in respect of climate change”.

On March 25, 2026 the governments announced that they had reached an agreement-in-principle on a proposed framework to curb methane emissions from the oil and gas industry. Under the framework, Alberta would implement a performance-based approach that combines regulations, offset credits, and targeted investments. The announcement of this agreement-in-principle contained no estimate of either the costs or the benefits of methane emissions. For context, in 2020 Canada’s methane emissions amounted to 92 million tonnes of carbon dioxide equivalent (MtCO2e). That is 13.6% of Canada’s total GHG emissions in 2020 or 0.2% (two one thousandths) of global GHG emissions in 2020. Only a third of this is from oil and gas.

The November agreement committed Alberta in principle to conclude an agreement with the federal government and the companies that are sponsoring the Pathways project that will allow the project to move ahead. The sponsoring companies have requested that governments (i.e. federal and provincial taxpayers) cover roughly 70% to 75% of the capital costs. The trilateral MOU and the approval and commencement of the initial Phase 1 Pathways Project will be a precondition to the commencement of the proposed oil pipeline to the west coast referred to in the November agreement. So, Alberta will have to make huge financial commitments before it will be assured that the Major Projects Office and the federal Cabinet will agree to deem any west coast oil pipeline as “of national interest”.

Premier Smith announced that the province would aim to submit a formal application for a west coast oil pipeline before the end of June, 2026. Alberta is assuming the initial “proponent” role and has organized a team of experts to do the initial planning. This is intended to prepare the way for an eventual turnover of the proponent and planning responsibilities to private sector participants. There has been relatively little news concerning the progress of the planning process. No private sector partner or group of partners has come forward to express a willingness to take on the risks of moving a pipeline application through the regulatory processes. The opposition of the British Columbia government and of several coastal indigenous groups, as well as that of well-funded environmental groups that enjoy “charity” status will make the process of planning and seeking approval for a west coast pipeline a challenging proposition.

Alberta’s energy prosperity, and Premier Smith’s ordering of the ducks, may be hampered ultimately by a key provision of the November agreement – a joint commitment to achieve net zero greenhouse gas emissions by 2050. As has been documented by the Canada Energy Regulator, the increased production and sale of Canada’s oil and natural gas resources is inconsistent with the net zero goal. It is only a matter of time before the conflict between these two objectives forces governments and the public to choose which objective will take precedence.

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