If federal government ignores reality and continues with Trudeau anti-carbon policies, thinly disguised as ‘national interest’ projects, Canada is facing economic and political trouble
By Ron Wallace, EnergyNow Media, Nov. 17, 2025
On November 13, 2025, the Carney government announced yet another round of projects to be referred to the newly created Major Projects Office (MPO), established under the authority of the Building Canada Act (2025).
The MPO is designed to coordinate and streamline federal approvals for infrastructure projects deemed by Cabinet to be in the “national interest.” The announcement barely mentioned that most of the referred projects had already received the regulatory permits required for construction or are, in several cases, already well under way.
Meanwhile, it remains to be seen if the aspirations of Alberta’s Premier Danielle Smith will be realized with a Memorandum of Understanding to be signed with the Carney government before the 112th Grey Cup in Winnipeg on Nov. 16.
It also remains to be seen if Canada and Alberta can, in fact, “create the circumstances whereby the oil and gas emissions cap would no longer be required” and if these negotiations will result in a “grand bargain” with the federal government.
For its part, Alberta has signalled it is willing to change its industrial carbon tax program to encourage corporations to invest in emissions reduction projects, while Alberta’s major energy producers have signalled that they are willing to consider carbon capture and methane reduction within an agreed industrial carbon pricing scheme. Notwithstanding concerns about its financial and technical viability, the Pathways Alliance Project appears to have become a cornerstone of Alberta’s negotiations with the federal government.
Alberta seeks more autonomy over natural resources and pipeline to west coast
In early 2025 Premier Smith issued a list of nine demands accompanied by a six-month ultimatum demanding the federal government roll back key elements of its climate policy. Designed to re-assert Alberta’s autonomy over natural resources, Smith’s core issues centered on the repeal of Bill C-69 (the “no new pipelines” act) and Bill C-48 (the Oil Tanker Moratorium Act), scrapping the proposed Clean Electricity Regulations, and abandonment of the net-zero automobile mandate.
In face of a possible refusal by Ottawa to deal with these outstanding issues, Premier Smith launched a “Next Steps” panel as a province-wide consultation to “strengthen provincial sovereignty within Canada”– a process that could possibly lead to a referendum on Alberta’s future within Confederation.
Subsequently, in early October, Premier Smith also announced that her government, in collaboration with three pipeline industry partners, would apply to the Major Projects Office for a new oil pipeline from Alberta to a marine terminal on the northwest coast of British Columbia.
The application would have this new pipeline designated as a “project in the national interest” to receive an accelerated review-and-approval timeline. Alberta is planning to submit that application in May 2026 to address the five criteria set by Ottawa for national interest determinations. Notably, the removal of what Premier Smith has termed “bad laws” would be a prerequisite to construction of this proposed project.
As the Carney government continues its complex dance around these issues, it remains to be seen how, or if, Smith’s demands for Canada to roll back federal legislation will be met. While Premier Smith has staunchly advocated for the removal of the “bad laws” blocking the “ultimate approval” of a pipeline to the B.C. coast, it remains to be seen if the Carney government will to agree to most, or even any, of these demands in ways that could clear the way for a new oil export pipeline from Alberta.
At a time when the Carney government appears to be doubling down on its priority to reduce Canadian emissions, it remains to be seen if Alberta can increase oil production without increasing emissions.
Liberal MP Corey Hogan, parliamentary secretary to the Minister of Energy and Natural Resources Tim Hodgson, noted that: “So as long as we can get to common understandings of what all of those mean, there’s not really a need for an emissions cap.” This “common understanding” may signal Ottawa’s willingness to set aside the Trudeau government’s signature proposed oil and gas emissions cap, in exchange for major carbon capture and storage projects in Alberta that would be combined with strong carbon pricing and methane regulations.
‘Grand bargain’ would create two classes of oil in Canada
While this “common understanding” may yet lead to a “grand bargain,” it would nevertheless effectively create two different classes of oil in Canada, each operating under different sets of regulations and different cost structures.
Western Canada’s crude oil producers would be forced to shoulder costly and technically challenging decarbonization requirements in face of a federal veto over any new oil projects that weren’t “decarbonized.” This means Canadian-produced oil would enter international export markets at a significant, if not ruinous, competitive disadvantage, risking not only profitability but market share. Meanwhile, this hypocritical policy would allow eastern Canadian oil refiners to import cheaper “carbonized” oil from countries with significantly looser environmental standards.
Carney’s November 2025 “Canada Strong” federal budget sets out $141.4 billion in new spending over five years, with a projected $78.3 billion deficit for 2025–26. As Jack Mintz points out, while that budget claims to be “spending less to invest more,” annual capital spending will double from $30 billion a year to $60 billion a year over five years:
Federal program spending, which doesn’t include interest on debt, is forecast to rise by 16 per cent from $490 billion this fiscal year to $568 billion in 2029-30. During the current year alone, the spending increase is a remarkable seven per cent. Public debt charges will soar by 43 per cent from $53 billion to $76 billion due to growing indebtedness and higher interest rates. No surprise there. Deficits — $78 billion this year alone — will accumulate by a whopping $320 billion over five years.”
Carney policies point to increased central planning of economy
Since 2015, Canada has experienced a flight of investment capital approaching CAD$650 billion due to lost, or deferred, resource projects, particularly in the energy sector. While many economists recognize that Canada’s fiscal status may be worse than appears, the Carney government is asking Canadians to ignore these figures while it implements industrial policies that, for all intents and purposes, represent a significant regression into central planning.
The “modernization” of the National Energy Board that began early in the Trudeau government’s mandate appears now as just a first step in the progressive centralization of control by the federal government. No longer will an independent, expert energy regulator make national interest determinations based upon cross-examined evidence presented in a public forum. Instead, a cabinet cloaked in confidentiality, and is clearly inclined toward emissions reduction as its paramount consideration, will now determine and select projects.
This centralized decision-making represents a dilemma that confronts not just Premier Smith but the entire Canadian energy sector. The emerging financial debacle in the Canadian EV battery and vehicular manufacturing market is but one example of how centrally planned criteria designed to achieve a Net Zero economy will almost invariably lead to unanticipated, if not economically disastrous, results.
The emerging financial debacle in the Canadian EV battery and vehicular manufacturing market is but one example of how centrally planned criteria designed to achieve a Net Zero economy will almost invariably lead to unanticipated, if not economically disastrous, results.
In short, the “green economy” is not working. The Fraser Institute noted that while Federal spending on the green economy surged from $600 million in 2014/15 to $23 billion in 2024/25, a nearly 40-fold increase, the green economy’s share of GDP rose only marginally from 3.1% in 2014 to 3.6% in 2023. Moreover, promised “green jobs” have not materialized at scale while traditional energy sectors vital to Alberta’s and the Canadian GDP have been actively constrained.
This economic reality has apparently not yet dawned in Ottawa. As Gwyn Morgan points out, Carney, who in 2021 with Michael Bloomberg launched the Glasgow Financial Alliance for Net Zero (GFANZ), has not changed his determination to hike Canadian carbon taxes, proposing to increase the industrial levy from $80 to $170/ton by 2030.
GFANZ was created to align global financial institutions with net-zero emissions targets, bringing together sector-specific alliances like the Net Zero Banking Alliance (NZBA) and the Net Zero Asset Managers (NZAM). However, early in 2025 GFANZ faced significant challenges as major U.S. banks exited the NZBA, followed by the Net-Zero Insurance Alliance (NZIA), which disbanded entirely in 2024 after a wave of member withdrawals. GFANZ was forced to undergo a strategic restructuring in January 2025 to shift from a coalition-of-alliances to a more open, stand-alone platform focused on mobilizing capital for the low-carbon transition through “pragmatic” climate financing. Pragmatic indeed.
Liberals continue Trudeau-era climate policies
While Carney’s GFANZ has effectively imploded, his government ignores developing new realities in climate policy by continuing to implement the Trudeau government’s green agenda with programs like the Pan-Canadian Framework on Clean Growth and Climate Change. That program contains a plethora of “green economy” measures designed to reduce carbon emissions in parallel with the 2030 Emissions Reduction Plan that commits Canada to reducing greenhouse gases (GHG) to achieve net-zero by 2050.
These policies ignore the recent change of mind by thought-leaders like Microsoft founder Bill Gates, who acknowledges that “climate change, disease, and poverty are all major problems we should deal with in proportion to the suffering they cause.” This aligns his thinking with that of Bjorn Lomborg who writes:
Climate change demands action, but not at the expense of poverty reduction. Rich governments should invest in long-overdue R&D for breakthrough green technologies — affordable, reliable alternatives that everyone, rich and poor alike, will adopt. That is how we can solve climate without sacrificing the vulnerable. More countries, including Canada, need to get on board with the mission of returning the World Bank to focusing on poverty. Raiding development funds for climate initiatives isn’t just misguided. It’s an affront to human suffering.
Philip Cross also expressed hope that 2025 may yet represent a “turning point in a return to sanity in public policy”:
Nowhere is the change more evident than in attitudes to green energy policies, once the rallying cry for left-wing parties in North America. Support has collapsed for three pillars of green energy advocacy: building electric vehicles to eliminate our need for oil pipelines and refineries; using the financial clout of the Net-Zero Banking Alliance to force firms to eliminate carbon emissions; and legally mandating the shift from fossil fuels to green energy.
Nonetheless, Prime Minister Carney appears resolute in the belief that Canadian policies for Net Zero are not hobbling investment in the energy sector, while choosing to ignore alternative regulatory and investment tools that could make a material difference for the economy.
Carney also appears to ignore major Canadian firms like TC Energy that have re-directed investments of $8.5 billion into the U.S. as they cite significant concerns about the Canadian regulatory structure. Similarly, Enbridge has advocated for “significant energy policy changes” in Canada, while focussing attention not on new export pipelines but instead on incrementally upgrading capacity within its existing Mainline system network.
Canada’s destiny as a “decarbonized energy superpower” will be largely determined by the serious economic consequences that will result from a sustained ideological push into “clean energy.” That said, will this be accomplished by a chaotic, ever-more centralized process of decision making, masquerading as a coherent national energy policy?
Conclusion
As Gwyn Morgan has succinctly written, it remains to be seen if the Carney government is willing to make a “climate climbdown” in face of the reality that net zero goals are being broadly abandoned globally, or will continue to sacrifice the Canadian economy to single-minded, unrealistic or unattainable, goals for emissions reduction.
To date, none of the projects referred by the Carney government to the Major Projects Office has been designated as “being in the national interest.” Moreover, the Alberta bitumen pipeline advocated by Premier Smith has not yet appeared on any list. Nonetheless, she apparently remains resolute in maintaining negotiations with Ottawa, stating:
Currently, we are working on an agreement with the federal government that includes the removal, carve out or overhaul of several damaging laws chasing away private investment in our energy sector, and an agreement to work towards ultimate approval of a bitumen pipeline to Asian markets.
As Alberta’s ultimatums and deadlines to Ottawa pass, it would be reasonable to question whether Premier Smith is, in fact, being confronted with the illusory freedom of a Hobson’s choice: Either Alberta must accept, at unprecedented cost, Ottawa’s determination to realize Net Zero, or it will get nothing at all.
While Smith may be seeking federal support to enable, or accelerate, construction of new pipelines, Ottawa may only be willing to promise to do better with an Memorandum of Understanding that would ultimately impose massive costs for “decarbonization” on Alberta. Meanwhile, Eastern Canada will import less expensive “carbonized” oil from other, less constrained, jurisdictions at a lower price. Is this a “Grand Bargain?”
Budget 2025 has introduced a Climate Competitiveness Strategy for nuclear, hydro, wind and grid modernization that projects more than CAD$1 trillion in spending over five years. It also reaffirms a commitment to increase carbon taxes by $80-$170/tonne for CO2-equivalent emissions by 2030. Since it appears committed to maintaining, or even expanding, Trudeau-era green legislation, some might question any commitments from the Carney government to enter into an even-handed debate on Canadian energy policies that are so critical to Alberta’s energy sector.
As the Fraser Institute points out:
The Canadian case shows an even greater mismatch between Ottawa’s [international climate commitments, e.g., 2015 Paris Accords] and its actual results. Despite billions spent by the federal government on the low-carbon economy (electric vehicle subsidies, tax credits to corporations, etc.), fossil fuel consumption increased 23 per cent between 1995 and 2024. Over the same period, the share of fossil fuels in Canada’s total energy consumption rose from 62.0 to 66.3 per cent.
While the creation of the MPO may give the appearance of accelerating projects deemed to be in the national interest, it nonetheless means an existing legislative base must be circumvented. This approach further enhances a centrally planned economy and presupposes that more, not less, bureaucracy will somehow make Canada an “energy superpower.”
Canada continues to overlook rising economic challenges while pursuing climate goals with inconsistent policies. As such, it risks becoming an outlier in energy policy at a time when the world is beginning to recognize the immense costs and implausibility of implementing policies for Net Zero.
Premier Danielle Smith may yet face a pivotal moment in Alberta’s, and possibly Canadian, history. If Ottawa’s past performance is but a prologue, predictions of a happy outcome may require a significant dose of optimism.
Ron Wallace is a former member of the National Energy Board and a member of Climate Realists of B.C. To read original article in EnergyNow Media, click here.
Great article. One has to wonder whether the Carney government is deliberately stalling on the negotiations with Alberta, knowing full well that it cannot abandon its climate zealotry for fear of alienating the Liberal Party’s constituencies and that the Canadian media will always report its actions favourably. If they can hit the timing right, they can delay until the timing favours another election in which they would hope for a majority and another four years in office. I do not believe that they take seriously the claims that Alberta can and will take action to deal with the federal anti-fossil fuel agenda.