Carney, Smith sign carbon price deal, suggest 2027 pipeline approval

Prime Minister Mark Carney and Alberta Premier Danielle Smith said Friday they’re eyeing a fall 2027 start date for construction of a new bitumen pipeline to the West Coast.

It’s part of a plan to accomplish the remaining steps of the landmark energy deal they signed last fall.

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Ottawa says the pipeline could be declared in the national interest by October of this year.

Alberta’s effective industrial carbon emission price is to rise to $130 per tonne by 2040. And its headline price would rise to $140 per tonne also by 2040 from the current $95 per tonne.

The effective price refers to how much carbon credits are sold for on the market, while the headline price refers to how much companies pay the province to comply with emission limits.

Carney and Smith, meeting in Calgary, said the implementation plan shows Alberta and Canada are serious about supporting and expanding the energy sector.

“Our agreement with Alberta is about building trust in a Canada that works,” Carney said in a statement.

“The door is open, and it’s time to turn shared ambition into real projects, jobs and results for Alberta and Canada,” said Smith.

The agreement also includes a commitment from Alberta to facilitate investment in renewable energy projects.

The prime minister said the pipeline remains dependent on the Pathways carbon-capture project in Alberta.

The next step is reaching a mutual agreement with the Oil Sands Alliance, the consortium of major oil players behind the project.

No private company to build and own the pipeline has come forward or been announced.

Smith’s government has been acting as the proponent so far and has been undertaking initial planning and consultations. She has said an initial proposal would be submitted to Ottawa before July.

A headline carbon emission price of $140 per tonne by 2040 for Alberta means Ottawa is permitting a much weaker pricing scheme, as the current federal backstop price is scheduled to reach $170 per tonne by 2030.

The deal is likely to force Ottawa to be more lenient with other provinces following the federal price. The Supreme Court of Canada ruled in 2021 that all jurisdictions need equal treatment for carbon pricing.

Oil and gas industry leaders have said in recent weeks that Ottawa’s carbon policy is putting Canada at a competitive disadvantage, especially compared to other oil-exporting nations that don’t have carbon pricing.

Others, including Nancy Southern, chief executive officer of ATCO, have said Canada’s industry can afford a higher price.

This report by The Canadian Press was first published May 15, 2026.