OTTAWA — Mark Carney, the central banker turned prime minister, boasts that he “knows the numbers,” but in backing a future new oil pipeline from Alberta to British Columbia, he may have calculated the political price to pay.
Stephen Guilbault, a former environment minister and Carney's political lieutenant in Quebec, left Carney's cabinet on Thursday, hours after a memorandum of understanding was presented in Calgary by the premier and Alberta's premier.
Cracks are developing within the federal Liberal caucus and beyond at the federal-provincial level.
Carney, pressed earlier Thursday about the caucus issues and whether there is enough in the Alberta energy deal to keep Guilbeault in cabinet, Carney replied curtly: “That's enough for the government of Canada.”
“I'm prime minister and my role is to make decisions in the best interests of Alberta and Canada. And what we're looking for here is results, real emissions reductions, and that requires investment, investment in Alberta and investment in British Columbia, investment on a large scale across Canada,” Carney said.
Guilbeault had intense “candid” conversations with Carney about what would happen and left Tuesday night's cabinet meeting to speak for a few minutes with British Columbia cabinet minister Gregor Robertson before heading back inside, the Star reported.
“It's not going to be a political win for us at the federal level,” a Liberal MP told the Star on Thursday that the deal gives Alberta everything it wants, even without a realistic private sector pipeline proposal on the table right now, and although it has the potential to alienate voters who supported the Liberal Party because of its climate action and commitment to reconciling Indigenous rights and concerns.
The lawmaker said it was unclear whether Carney wanted a “yes” or a “no” on the pipeline and said that while Carney is a very smart man, he is also capable of doing “really stupid” things politically.
The Star spoke to several MPs to gauge the reaction, granting confidentiality, although some insisted they would not discuss internal matters otherwise.
On Wednesday, Carney explained to lawmakers that many conditions still need to be met before the pipeline can be built, according to Star sources.
That was before the prime minister enthusiastically signed the energy deal Thursday in Calgary with a grinning Alberta Premier Danielle Smith.
“At the heart of the agreement, of course, is the priority of building a pipeline to Asia,” Carney said.
The first lawmaker said the deal was causing serious concern among the Liberal caucus, which was not fully informed of the details in advance, adding that it made it a very difficult decision for Guilbeault, a minister whose climate change rules have been largely ignored, to lend support.
Energy Minister Tim Hodgson scolded members of the British Columbia caucus not to be “naive,” saying they should stop being energy “boy scouts” at a time of U.S. tariffs and global trade uncertainty, according to a second Liberal MP.
The MP said Hodgson, former chairman of Hydro One in Ontario, told them they were lucky to have Carney as prime minister.
Hodgson's spokeswoman Carolyn Swonkin did not deny the minister's comments.
“It's very disappointing that some people in this debate don't take seriously the trust that has been placed in her,” she said.
A third Liberal MP told the Star on Thursday the government was making a political “mistake” in what could be the first significant effort to weaken Carney's grip on party voters since he took office in March.
The MP said the Alberta deal would lead the public to believe the federal government is going to build a new oil pipeline and would put Carney's Liberals in a position to defend it if the current proposal ultimately passes over the objections of British Columbia and First Nations.
“This leads us to conflict,” the deputy said. “Now it's on our plate. And it didn't have to be this way.”
But a fourth Liberal, Surrey MP Sukh Dhaliwal, said he had no concerns. “I fully support the Prime Minister on this issue. The Alberta-Canada Memorandum of Understanding will create thousands of good-paying jobs, increase Canada's GDP while promoting clean energy development,” he said, adding that technology has greatly improved with double-hull tankers and tugs that should allow oil tankers to operate safely off the coast of British Columbia.
The deal met immediate opposition from indigenous peoples.
“We will never allow our coastline to be at risk of a catastrophic oil spill,” Marilyn Slett, chief of the Coastal First Nations Great Bear Initiative and elected chief of the Heiltsuk Nation, said in a written statement.
“We are not interested in shared ownership or economic benefit from a project that could potentially destroy our way of life and everything we have built on the coast.”
Alberta's premier boasted at a news conference that she had secured the repeal of seven of the nine so-called “bad laws” she long ago identified to Ottawa.
Smith said she blames Carney's predecessor Justin Trudeau and his climate policies for the rise in sentiment about Alberta secession.
In her first meeting with Carney, Smith said she told the prime minister he could end the separatist rise by agreeing to the changes he signed on Thursday, “so I hope” they will ease, she added.
Smith won Carney's deal to end an oil and gas emissions cap that Alberta claimed was a cap on production, a claim Ottawa had previously disputed. As of April 1, it won an Alberta-only exemption from clean energy rules. Ottawa has relaxed its methane emissions regulations, using a different base year for cuts. Smith has continued federal support and funding for a massive multibillion-dollar carbon capture and storage project, and while she has agreed to tighten industrial carbon prices, she has committed to paying $130 per ton rather than $170 per ton as previously planned. Also gone are interim climate change targets for interim years, with the main net zero target now set to 2050, Smith said.
Carney touted Smith's agreement to tighten carbon prices over time, as well as the prospect that a massive Pathways carbon capture and storage project would be built to decarbonize Canadian oil.
The Liberal prime minister did not use the Harper-era phrase about “ethical oil” but said “we will have the lowest energy-intensive oil from Alberta and the most competitive oil, the most competitive in the world. And that will be an incredible feat.”
Caucus issues aside, the agreement with Alberta has implications for federal and provincial politics.
Ontario Premier Doug Ford wants the same relaxations in clean electricity rules as Alberta, the Star's Robert Benzie reports.
Bloc Québécois Leader Yves-François Blanchet ridiculed Carney's decision to agree that a bitumen pipeline from Alberta to Asian markets was a “project of national interest” for bringing major projects into office and potentially expediting without explicit approval from B.C., and vowed to oppose it.
British Columbia Premier David Eby is furious at being left out of negotiations over a deal that he says threatens Indigenous consent and support for various liquefied natural gas projects in his province. If BC were involved in this, it would, for example, insist on measures to eliminate oil spills.
Eby on Thursday stressed that the pipeline proposal has no proponent, route or Indigenous support and represents a “noticeable departure” from federal climate policy. Banning oil tankers on British Columbia's north coast is key to First Nations consent to other projects.
“The bottom line for us is that we have to make sure that this project does not become an energy vampire … that it cannot divert limited federal resources, limited Indigenous government resources, limited provincial resources from real projects that will employ people, provide the country with the money we desperately need, and provide investment and access to global markets to deepen our trade relationships overseas.”
Eby said the pipeline proposal carries a “very high risk” of diverting attention from ongoing projects that have received or are about to receive all regulatory approvals, have private sector support and are “ready to move forward.”
Smith said she spoke with Eby on Wednesday night but stressed that “the MOU does not contain a veto.”
“But I think we both collectively recognize that there is a need for consultation and we do believe there is a need for Indigenous ownership,” Smith told reporters. “We know there is hard work that needs to be done, that we will do and that we intend to do, and we look forward to genuine consultation and engagement.”
Another political story within the federal Conservative caucus could also unfold as Alberta's premier advocates for stricter prices on industrial carbon emissions at a time when federal Conservative leader Pierre Poilievre has pushed hard to eliminate industrial carbon prices, arguing it raises costs for agriculture, steel, aluminum and other industries.
On Thursday, Poilievre said he was glad Smith had forced Carney to “flip” on some liberal climate policies. But he said the deal “will not lead to a new pipeline to the Pacific Ocean; it will lead to higher taxes, longer delays and greater dependence on the US.”
Carney has taken risks before, most recently as leader of a minority government on his budget.
He bet he could pass a federal budget without negotiations with opposition parties and told the Montreal Chamber of Commerce: “First of all, you have a government that can count, OK. We can count. Me, Champagne and Sabia,” he said, naming his finance minister and Privy Council secretary Michael Sabia. “We know the numbers.”
Now he will have to count on all of his 169 MPs staying with him, too.
With a file from Ryan Tumilty
