The failure of Premier Danielle Smith and Prime Minister Mark Carney to resolve the outstanding conditions of the 2025 Memorandum of Understanding by the April 1 deadline was utterly predictable, but nevertheless still depressing. This outcome underscores the ongoing tension between Alberta's economic aspirations and federal environmental policies.
Federal Rules Stifling Growth
The growth of Alberta's resource industry has been consistently stifled by federal regulations, and there is little reason to believe that Prime Minister Mark Carney will reverse this trend. The conditions imposed—open-ended carbon taxes on industrial emissions and mandatory carbon capture and sequestration (CCS)—remain non-negotiable for Carney, who prioritizes Canada's net-zero credibility over economic pragmatism.
A Decade of Lost Opportunities
This result is set against 11 years of federal Liberal governance, during which Alberta has been perversely frustrated in realizing its full economic potential from hydrocarbon development. The cumulative value loss is estimated in the hundreds of billions of dollars. Key historical setbacks include:
- 2015: Rejection of the Northern Gateway pipeline project, which would have linked Alberta oilsands to Asian crude markets.
- 2017: Loss of the Petronas LNG and Energy East pipeline projects due to regulatory and political hurdles.
- 2015 and 2021: Denials of permits by U.S. Democratic administrations for the Keystone XL pipeline.
- 2019: Imposition of Bill C-69, designed to obstruct rather than expedite hydrocarbon development in Alberta.
Global Pricing Disparities
Despite higher global hydrocarbon prices, North American natural gas has remained below $3 per mmBTU, while global LNG prices have averaged $20 to $25 per mmBTU. Similarly, crude oil prices have risen by more than $40 per barrel. Canada could have produced at least an additional 1.5 billion cubic feet per day of LNG and nearly one million barrels per day of oilsands production, accessing premium Asian markets. This missed opportunity has contributed significantly to Canada's declining GDP per capita relative to the United States.
Unrealistic Expectations
The Alberta government appears to expect the federal Liberal government to act in good faith, expediting expanded hydrocarbon production and market access while refraining from imposing untenable costs that global markets will not absorb. However, such optimism seems misplaced. Open-ended carbon taxes and CCS requirements constitute climate extremism, which should only be implemented if the developed world, especially the U.S., is prepared to impose similar costs on itself.
I ardently hope that some epiphany strikes Prime Minister Carney, but I doubt it. It was never in Canada's self-interest to be at the forefront of climate extremism, and the consequences for Alberta's economy continue to mount.
