Canada could tweak its existing energy policies to allow new oil pipelines to be built, but prime minister Mark Carney's first six months have lacked tangible change that would help to restore investor confidence, industry experts say.
"We have seen progress but it is insufficient to stimulate the investment and growth required," more than 90 oil and gas executives wrote in an open letter to Mark Carney on 15 September. Carney says he wants Canada to become an "energy superpower", to break its economic dependence on the US, but his approach has yet to resonate with the industry that could help realise that aim.
Carney on 11 September unveiled a short list of major projects his Liberal government wants fast-tracked, allowing them to skip through some of the regulatory burden that has saddled proponents for the past 10 years. The five projects selected include Shell-led LNG Canada's Phase 2, two mining developments, a nuclear project and a container port expansion. Carney's choices were welcomed by the executives, but Conservatives say the government is swooping in to take credit when projects are nearing their final stages while adding another layer of bureaucracy with its new Major Projects Office.
A tanker ban on the northern coast of British Columbia, an emissions cap on oil and gas producers and a host of other laws continue to stifle investment, say executives from the country's largest energy companies including Canadian Natural Resources, Cenovus, Suncor, Enbridge, TC Energy and Pathways Alliance.
Carney says exceptions could be made under the new regulations, but the seemingly improvised method of carving out rules for select projects is not instilling much confidence among oil and gas executives wanting material change. Industry leaders listed key areas they want the government to focus on, including significantly simplifying regulations, shortening project approval timelines, committing to grow conventional production and eliminating the industrial carbon tax.
The Grand Bargain
Emissions reductions tied to another Pacific coast pipeline and growing oil sands production make up the three pillars of a so-called Grand Bargain that Alberta premier Danielle Smith and Carney agree on. Carney has asked his new projects office to steer the 22mn t/yr Pathways Alliance carbon capture and storage project so it too can be fast-tracked, while Smith finally sees a path for a sought-after 1mn b/d bitumen pipeline. In a rare move, Smith has called on Albertans for patience amid a growing separatist movement that she has been accused of encouraging. "I look forward to reaching an agreement that will profoundly benefit the Canadian and Alberta economies," she wrote on social media platform X.
Pathways and the oil sands producers behind it have been quiet about the project since a federal greenwashing law came into effect in 2024. But Pathways needs more tax relief to get off the ground, and the projects office can apparently help to organise it. Alberta plans to allow investments in such technology — rather than emissions reductions itself — to cover up to 90pc of its obligations in the provincial Technology Innovation and Emissions Reduction programme.
This would support projects such as Pathways, but questions remain over how it would be measured and the pressure it could exert on credits the market relies on to stimulate low-carbon investment. And Smith is still forging ahead with a new path for emissions reductions that could force Carney to take a position on the federal government's own programme. Alberta has frozen its industrial price for carbon at C$95/t ($69/t) indefinitely, which will put it out of sync with the federal price due to rise to C$110/t next year. Ottawa defers to the provinces' own emissions programme, provided they can "fully replace" the federal one.
