The federal and Alberta governments have finalized a landmark agreement to clear regulatory hurdles and advance the construction of a new, Indigenous co-owned oil pipeline to the west coast, aiming to break ground as early as Sept. 1, 2027.
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The implementation agreement, announced May 15, builds on an energy memorandum of understanding signed in November 2025. It establishes a streamlined regulatory framework intended to reduce industrial uncertainty, boost energy exports to Asian markets and insulate Alberta from steep increases to the federal industrial carbon tax.
“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,” Alberta Premier Danielle Smith said in a statement, adding that the province “cannot afford to lose another decade.”
Under the terms of the deal, Ottawa has committed to a prompt review of Alberta’s submission to the federal Major Projects Office. The goal is to designate the proposed pipeline as a project of national interest by Oct. 1, allowing design and construction to begin the following year.
Once operational, the pipeline is expected to transport more than one million barrels of oil per day to a strategic west coast port. Officials emphasized the project will involve early and meaningful consultation with First Nations and Métis communities, focusing on opportunities for Indigenous ownership.
The agreement also introduces a reworked industrial carbon pricing schedule under Alberta’s Technology, Innovation and Emissions Reduction (TIER) system. The new schedule rolls back the previously mandated federal target of $170 per tonne by 2030.
Instead, the industrial carbon price will remain at $95 per tonne for the rest of 2026, rising to $100 per tonne from 2027 to 2030, and capping at $130 per tonne by 2035. The province estimates the adjustment will save industrial partners roughly $250 billion by 2050.
“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,” Prime Minister Mark Carney said.
As part of the regulatory alignment, the federal government agreed not to proceed with a proposed oil and gas emissions cap and placed a temporary hold on the application of federal Clean Electricity Regulations in Alberta.
Industry groups and Indigenous leaders welcomed the announcement, citing the economic certainty it brings to major energy and emission-reduction projects, including the large-scale Pathways carbon capture, utilization, and storage infrastructure.
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