Carney’s retreat on climate policy a major win for Alberta

Carney’s climbdown from Trudeau-era climate policies shows Alberta’s long resistance to federal overreach may finally be paying off

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After years of federal policies clashing with Alberta’s energy interests, a major course correction may finally be underway. With Prime Minister Mark Carney backing off key Trudeau-era policies, Alberta may finally be getting its way.

Carney and Premier Danielle Smith appear to be on a fence-mending mission. Relations between the federal government and Alberta were rocky at best during the Trudeau era. Ottawa’s heavy focus on environmental issues was a major bone of contention with Alberta, the oil-rich, energy capital of Canada.

Alberta produces most of Canada’s oil and gas and has long resisted federal climate regulations it sees as threats to jobs and investment.

For years, Smith made combativeness with Ottawa a cornerstone of her policy. But after a meeting last week with Carney, she signalled a change in approach.

“I found more common ground with the prime minister when I met with him yesterday than I have in any meeting with a prime minister,” she said in Edmonton the next day.

Carney has already withdrawn the federal consumer carbon tax—though the industrial carbon pricing system remains in place—and delayed the federal electric vehicle mandate. Now, the most contentious file of all may be next: the emissions cap. Ottawa is in talks with Alberta and oil companies about oil sands emissions, which account for nearly a third of Canada’s greenhouse gas output.

The government may abandon the proposed cap if Alberta and energy firms agree to other environmental concessions. The Trudeau-era cap, announced last November, aimed to cut emissions from oil and gas operations to 35 per cent below 2019 levels. While it focused on emissions rather than production, Alberta warned it would still harm investment.

Smith strongly opposed the proposal at the time, vowing to “use all means at her disposal” to oppose federal policies that could hurt the province.

But the bad air is lifting.

Federal Energy Minister Tim Hodgson confirmed Friday that discussions are underway.

“We are in the middle of discussions around how we get to the results,” he said, calling the talks “productive” and noting the “unity” among participants, although he declined to share details, saying he would “not negotiate through the media.”

One project now under consideration for fast-tracking is the Pathways Alliance carbon capture and storage proposal. Pathways Alliance is a consortium of major oil sands producers working to reduce emissions through large-scale carbon capture.

If approved, the project could pave the way for a new “decarbonized” pipeline, Carney said Thursday—a move that would have been unthinkable just a year ago.

Greenhouse gas emissions remain a delicate subject.

Responding to reports that the emissions cap may be scrapped, a senior energy strategist with Greenpeace Canada accused Ottawa of bending to political pressure.

“It would be a tragic mistake for the Liberal government to back off on climate action while wildfires are still burning across this country,” said Keith Stewart in a media statement.

It’s too early to say whether Ottawa’s gestures will heal the rift with Alberta. But the direction has changed—and the outcome could reshape how Canada balances climate goals with resource development.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.