Before the 112th Grey Cup kicks off at Princess Auto Stadium in Winnipeg, Alberta Premier Danielle Smith anticipates a significant development in the ongoing federal-provincial dispute over energy policies. These policies have been shifting in Alberta in recent months, with Smith aiming for a resolution before the CFL’s championship game on Nov. 16.
Smith expects the federal government to finalize a memorandum of understanding by Grey Cup to pave the way for attracting private capital back to Canada’s natural resource sector. This would involve eliminating or revising what Alberta deems as unfavorable laws and striving for the ultimate approval of a pipeline to the B.C. coast. Additionally, the premier is keen on advancing the Pathways Alliance initiative, a major carbon capture and storage project near Cold Lake.
On the federal front, Ottawa is considering scrapping its proposed oil and gas emissions cap in exchange for robust carbon pricing, methane regulations, and increased carbon capture and storage deployment. Finance Minister François-Philippe Champagne emphasized the need to meet certain conditions to eliminate the emissions cap.
Alberta’s industrial carbon tax, known as Technology Innovation and Emissions Reduction (TIER), holds a pivotal role in the energy landscape. Liberal MP Corey Hogan highlighted the significance of Alberta’s system and the importance of meeting federal standards to obviate the need for an emissions cap.
The frozen $95 per tonne industrial carbon price in Alberta, maintained through 2026, poses a challenge as it diverges from the federal backstop price trajectory. Discussions are ongoing regarding potential adjustments to this carbon pricing framework to align with federal standards and promote investments in emissions reduction technology.
While uncertainties loom, there is room for collaboration on carbon pricing between the federal and Alberta governments. The Pembina Institute stresses the necessity of strong industrial carbon pricing and a stable TIER market for the successful implementation of the “grand bargain.”
Amidst these discussions, it remains unclear how Alberta’s aspirations for expanded oilsands production align with emissions targets. The federal government is engaging with Alberta and industry stakeholders to bolster Canada’s energy sector and pursue major projects. The Pathways Alliance refrains from commenting on the ongoing negotiations between the two governments.