Mark Carney's Alberta deal defies some of his own MPs who see 'zero political win' federally

Within the federal Liberal caucus and outside it, on the federal-provincial stage, there are fissures developing.

Carney, pressed earlier Thursday about caucus concerns and whether there is enough in the Alberta energy deal to keep Guilbeault inside cabinet, Carney said curtly, “It’s enough for the government of Canada.”

“I’m the prime minister, and my role is to make decisions in the interests of Alberta and Canada. And what we’re seeking here are the results, real emissions reductions, and that requires investment, investment in Alberta and investment in British Columbia, investment on a large scale right across Canada,” said Carney.

As the Star reported, Guilbeault was in intense “candid” conversations with Carney over what was coming, and left a cabinet meeting on Tuesday night to huddle for several minutes with a B.C. cabinet minister Gregor Robertson, before going back inside.

“There’s zero political win in this for us federally,” said a Liberal MP on Thursday who told the Star 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 actions and commitment to reconcile Indigenous rights and concerns.

The MP said it is not clear if Carney wants to get to “yes” on a pipeline, or to “no,” and said while Carney is a very smart man, he is also able to do politically “really dumb” things. 

The Star spoke to several MPs to gauge reaction, granting confidentiality where some insisted they would not otherwise discuss internal matters.

Carney explained to his MPs on Wednesday that there are a lot of conditions still to be met before a pipeline can be built, according to the Star’s sources.

That was before the prime minister enthusiastically signed the energy deal Thursday in Calgary with a grinning Alberta Premier Danielle Smith.

“At the core of the agreement, of course, is a priority to have a pipeline to Asia,” said Carney.

The first MP said the deal raises major concerns in a Liberal caucus that was not fully briefed ahead of time on the details, adding it makes for a very difficult decision for Guilbeault, the minister whose climate change regulations are largely set aside, to be supportive.

According to a second Liberal MP, Energy Minister Tim Hodgson scolded members of the B.C. caucus not to be “naive,” saying they should stop being “boy scouts” on energy at a time of U.S. tariffs and global trade uncertainties.

The MP said Hodgson, a former chair of Ontario’s Hydro One, told them that they should feel lucky to have Carney as prime minister.

Hodgson’s spokesperson Carolyn Svonkin did not deny the minister made those comments.

“It’s really disappointing that some members of that discussion aren’t taking the confidence it was held in seriously,” she said.

A third Liberal MP told the Star Thursday that the government was making a political “mistake” that could be the first significant strain on Carney’s hold over the party’s voter base since he took office in March.

The MP said the deal with Alberta will make the public believe the federal government is going to build a new oil pipeline, and will place the Carney Liberals in the position of defending one if the current proposal ends up going forward against the objections of B.C. and First Nations.

“It’s leading us to conflict,” the MP said. “It’s now on our plate. And it didn’t have to be this way.”

However, a fourth Liberal, Surrey MP Sukh Dhaliwal, said he has no concerns. “I completely support the prime minister on this one. This Alberta-Canada MOU will create thousands of good-paying jobs, boost Canada’s GDP all while advancing clean energy,” he said, adding technology has improved significantly, with double-hulled tankers and tugboats which should allow oil tankers to operate safely off B.C.’s coast. 

The deal met immediate resistance from First Nations.

“We will never allow our coast to be put at risk of a catastrophic oil spill,” said Marilyn Slett, head of the Coastal First Nations – Great Bear Initiative and elected chief of the Heiltsuk Nation, in a written a statement.

“We have zero interest in co-ownership or economic benefits of a project that has the potential to destroy our way of life and everything we have built on the coast.” 

Alberta’s premier boasted in a news conference that she won an end to seven out of nine so-called “bad laws” she’d long identified to Ottawa.

Smith said she blames Carney’s predecessor Justin Trudeau, and his climate policies, for the rise of Alberta separation sentiment. 

In her first meeting with Carney, Smith said she told the prime minister he could end the separatists’ rise by agreeing to the kinds of changes he signed onto Thursday, “so I’m hopeful” it will ease, she added.

Smith won Carney’s agreement to eliminate the oil and gas emissions cap — which Alberta claimed was a productions cap, a claim Ottawa previously disputed. She won an Alberta-only exemption to clean energy regulations for April 1. Ottawa has eased a regulation on methane emissions by using a different baseline year for reductions. Smith gets ongoing federal backing and financing for a massive multibillion-dollar carbon capture and storage project, and while she agreed to toughen industrial carbon pricing, she has committed to $130 a ton not $170 a ton that was previously planned. Also gone, said Smith, are the interim climate action targets for the interim years, with the main net-zero target now being 2050.

Carney touted Smith’s agreement to toughen carbon pricing over time, and the prospect that the major Pathways carbon capture and storage project would get built to decarbonize Canadian oil.

The Liberal prime minister did not use the Harper-era phrase “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 this will be an incredible feat.”

Apart from caucus trouble, the Alberta deal has consequences in federal-provincial politics.

Ontario’s Premier Doug Ford wants the same break on clean electricity regulations that Alberta stands to get, the Star’s Robert Benzie reports.

Bloc Québécois Leader Yves-François Blanchet mocked Carney’s decision to agree an Alberta bitumen pipeline to Asian markets is “a project of national interest” for referral to the major projects office and potential fast-tracking, without the express approval of B.C., and vowed to oppose it.

B.C. Premier David Eby is furious at having been left out of the negotiations for a deal that he said risks Indigenous consent and support for various liquid natural gas projects in his province. If B.C. had been involved, he would have insisted, for example, on measures dealing with an oil spill response.

Eby on Thursday underscored that the pipeline proposal doesn’t have a proponent, a route, no First Nation support, and represents “a marked departure” from federal climate policy. The oil tanker ban on B.C.‘s north coast is key to Indigenous consent for other projects.

“The bottom line for us is we need to make sure this project doesn’t become an energy vampire … that it cannot draw limited federal resources, limited Indigenous governance resources, limited provincial resources away from the real projects that will employ people, provide the country with money that we desperately need, and provide investment and access to global markets to deepen our trade relationships overseas.”

Eby said the pipeline proposal runs the “very big risk” of distracting from current projects that have or are about to have all regulatory approvals, have private sector backers and “are ready to go.”

Smith said she talked to Eby Wednesday night but underlined that “the MOU does not contain a veto.”

“But I think that we both recognize jointly that there is a requirement for consultation, and indeed we believe that there’s an imperative for Indigenous ownership,” Smith told reporters.  “We know that that’s hard work that needs to be done, that we will do, we intend to do, and we’re looking forward to having genuine consultation and ownership.”

A different political story within the federal Conservative caucus could unfold too, as Alberta’s premier embraces stricter industrial carbon pricing at a time when federal Conservative Leader Pierre Poilievre has gone all in on eliminating industrial carbon pricing, arguing it raises costs for agricultural, steel, aluminum and other industries.

On Thursday, Poilievre said he was glad Smith forced Carney to “flip-flop” on some Liberal climate policies. But he said the deal would “not bring a new pipeline to the Pacific; it brings higher taxes, long delays and more dependence on the U.S.” A Conservative federal government led by him “would approve a pipeline to the Pacific without a carbon tax, without delay, without excuses. Period.”

Carney has taken gambles before — most recently as a minority government leader on his budget.

He bet he’d be able to pass a federal budget without negotiating 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 Clerk Michael Sabia. “We know the numbers.”

Now he’ll have to count that all of his 169 MPs will also stick with him.

With a file from Ryan Tumilty