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CALGARY — Alberta and Ottawa have finalized a sweeping new energy and climate agreement aimed at accelerating construction of a major new oil pipeline to Canada’s west coast, a move both governments say could reshape the country’s economic future and strengthen energy exports to Asian markets.
The agreement, announced Friday by Prime Minister Mark Carney and Alberta Premier Danielle Smith in Calgary, lays out a pathway for design and construction of a new pipeline to begin as early as Sept. 1, 2027.
The proposed project would transport more than one million barrels of oil per day to tidewater, reducing Canada’s long-standing dependence on the United States as its primary energy customer while expanding access to growing Asian markets.
The deal builds on a memorandum of understanding signed between Alberta and the federal government in November 2025 and includes agreements on industrial carbon pricing, regulatory streamlining, emissions policy and support for major infrastructure development.
“This agreement sends a clear message to investors and global partners that Canada and Alberta are serious about expanding market access, building major infrastructure and creating the conditions for long-term investment in our province’s energy sector,” Smith said in a statement.
“Alberta is ready to build, invest and partner, but we cannot afford to lose another decade.”
Carney framed the agreement as a signal Canada is prepared to move more quickly on major nation-building projects while balancing economic growth with emissions reduction goals.
“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,” Carney said.
“We are building a Canada with a more prosperous, sustainable and resilient economy for all.”
Under the agreement, Alberta intends to submit a proposal for the pipeline to the federal Major Projects Office by July 1, with Ottawa expected to designate it as a project of national interest by Oct. 1, 2026.
The governments say consultations with Indigenous communities will remain central to the project’s development, with officials emphasizing opportunities for Indigenous ownership and long-term economic participation.
Former Fort McKay First Nation chief Jim Boucher welcomed the agreement and said Indigenous co-ownership could generate significant long-term prosperity for communities.
“I’m encouraged to see the governments of Alberta and Canada take this next step toward advancing a new Indigenous co-owned pipeline to the west coast,” Boucher said.
“This project would provide significant economic benefits and long-term prosperity for First Nations.”
Métis Settlements General Council president Dave Lamouche also praised the agreement, saying projects of this scale could create long-term employment, training and economic stability across generations.
Business groups and industry leaders also described the agreement as a major turning point for Canada’s energy sector.
Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, said the agreement arrives at “a pivotal moment in the history of global energy markets.”
“We commend the governments of Canada and Alberta for advancing key components of the MOU through collaborative action, including a commitment to develop a west coast pipeline through the Major Projects Office under a defined timeline, providing much-needed certainty needed by industry to invest capital,” Yedlin said.
The agreement also significantly reshapes Alberta’s industrial carbon pricing framework.
Instead of rising to $170 per tonne by 2030 under previous federal plans, the industrial carbon price will now remain at $95 per tonne for the rest of 2026, rise to $100 in 2027 and gradually increase to $130 per tonne by 2035.
Alberta says the revised pricing structure could save industry partners roughly $250 billion in avoided costs through 2050.
The agreement also includes a price floor for Alberta’s Technology Innovation and Emissions Reduction system beginning in 2030 to reduce volatility and encourage investment in emissions-reduction technologies.
Oil Sands Alliance president Kendall Dilling said the organization appreciates the additional clarity provided by the agreement, although he cautioned carbon pricing still creates competitiveness challenges for the sector.
“Oil Sands Alliance is committed to advancing the Pathways carbon capture and storage project provided the necessary regulatory and fiscal terms are in place,” Dilling said.
“We fully support the Prime Minister and Premier’s shared vision of making Canada an energy superpower and growing Alberta oil production.”
The agreement also commits both governments to continue supporting the Pathways carbon capture and storage project, which proponents say could become the world’s largest carbon capture network.
Additional measures include a commitment not to proceed with a federal oil and gas emissions cap, continued abeyance of federal Clean Electricity Regulations in Alberta and an agreement-in-principle allowing Alberta to continue regulating methane emissions under its existing system while targeting a 75 per cent reduction from 2014 levels by 2035.
The agreement also establishes plans for a joint federal-provincial electricity working group exploring nuclear energy, geothermal power, hydrogen, wind, solar and natural gas generation.
The announcement comes as Canada and its allies increasingly focus on energy security, export diversification and domestic infrastructure development amid geopolitical instability and rising global energy demand.
While some environmental groups criticized the agreement Friday, both governments argued the deal strikes a practical balance between economic growth and long-term emissions reduction goals.
Smith described the agreement as evidence Alberta and Ottawa can work together after years of strained relations over energy policy.
“It means we’re much closer to attaining our joint ambition to make Canada a global energy leader,” Smith said during Friday’s signing ceremony.
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