Carney-Smith Pipeline Talks Show Progress But Deadlines Slip

Alberta Premier Danielle Smith left her Friday meeting with Prime Minister Mark Carney sounding more confident than she has in months that a memorandum of understanding clearing the way for a new bitumen pipeline can finally be inked. The two leaders met at Carney's office in Ottawa on May 8, capping a frustrating stretch in which their negotiating teams blew through an initial April 1 deadline and a later mid-spring target with no signed deal to show for it.

Both Smith and Carney told reporters after the session that progress had been made on a document expected to outline the conditions that need to be met before a new pipeline can be approved, including a federally backed carbon capture and storage commitment. Smith stopped short of declaring victory but said industry, which had grown impatient with the pace of talks, should now be reassured that the file is moving.

What is on the table

The MOU under negotiation would not approve any specific pipeline. It would, however, set out a framework under which the federal government and Alberta agree on the regulatory pathway, the climate conditions and the financial backstops that would have to be in place for a new bitumen export line to receive a green light.

Among the most contentious items remains the timeline for implementing an industrial carbon price of $130 per tonne. Alberta wants flexibility on how and when that price is applied, particularly to oilsands producers, while Ottawa has insisted on a credible carbon trajectory that gives investors certainty and meets Canada's international climate commitments. Smith said Friday that talks on that specific number remain unresolved but characterised the gap as narrower than it was a month ago.

The MOU is also expected to commit Ottawa to working with Alberta on a major carbon capture and storage build-out, anchored by the long-discussed Pathways Alliance project in the Athabasca region. Industry has tied any new export pipeline to that decarbonisation infrastructure receiving meaningful federal financial support.

The Major Projects Office angle

The timing of the talks matters because of an internal government deadline that has come to dominate the file. Alberta has told Ottawa it intends to file a formal submission to the federal Major Projects Office in June, asking that a new pipeline be designated a project of national interest under the recently passed Building Canada Act.

If the MOU is signed before that submission lands, the Major Projects Office can use it as a road map to fast-track its review under Bill C-5, which gives Cabinet the ability to compress regulatory timelines for projects deemed in the national interest. If the MOU is not in place, the file lands in a much messier political position with the federal government potentially holding the line on conditions Alberta has not agreed to.

Smith made clear after Friday's meeting that she would prefer the signed agreement to be on the desk before her government has to file. Carney, for his part, has framed the talks as part of a broader push to get major energy and infrastructure projects moving in a country that he has repeatedly called too slow to build.

The political stakes for both leaders

For Carney, who won a majority in the April 13 federal election after a campaign built around economic sovereignty and nation-building investment, delivering a pipeline deal with Alberta would be a tangible win. It would also give him a credible answer to critics in the West who have long accused Ottawa of paying lip service to resource development while quietly throttling it.

For Smith, the political dynamics are sharper. A citizen-initiated petition seeking a referendum on Alberta separation cleared its signature threshold last week, and a court challenge from Alberta First Nations is now in front of a judge. Smith has positioned a successful pipeline deal as evidence that her preferred approach, hard bargaining inside Confederation, can deliver where separatism cannot.

That framing puts pressure on the prime minister to deliver, and quickly. Industry stakeholders, Smith said Friday, are getting a bit impatient. So is a slice of the Alberta electorate that has watched separatist organisers collect more than 300,000 signatures on a petition that, if upheld by the courts, could put the question of leaving Canada on the provincial ballot as soon as October.

Reaction from industry

Energy executives have publicly welcomed the MOU push while privately cautioning that even a signed framework would not, on its own, get steel in the ground. A new pipeline would still face Crown consultation with First Nations along any proposed route, environmental assessment under the modernised process Carney is preparing to legislate, and the always vexing question of which company would actually pony up the billions of dollars needed to build it.

The Pathways Alliance, the consortium of oilsands producers behind the proposed carbon capture network, has been clear that it expects federal support equivalent to what was offered to similar projects in the United States under the Inflation Reduction Act. The price tag for that level of support runs into the tens of billions of dollars across multiple years.

Pipeline operators including Enbridge and TC Energy have been more circumspect, signalling interest only if regulatory and political risk can be reduced. Both companies have been burned in the past on the file and are unlikely to commit capital without ironclad federal backing.

First Nations and the consultation question

Any new bitumen line would cross territory covered by historic treaties as well as unceded Indigenous lands in British Columbia. Carney has signalled that Indigenous economic participation, including equity ownership, will be a non-negotiable feature of any project approved under the new framework.

That position has been welcomed by some First Nations leaders who see a path to long-term revenue from major resource projects. It has been treated more skeptically by others who argue that economic participation cannot substitute for the right to say no to a project on traditional territory. The Federal Court of Appeal's earlier jurisprudence on consultation duties continues to shape what counts as a defensible process.

The Carney government has also moved to embed Indigenous lenders and the Canada Infrastructure Bank as financial partners on major projects, an approach designed to lower the cost of capital for First Nations equity stakes. How that financing piece fits into a final pipeline deal will be among the most closely watched details once the MOU is signed.

The wider energy agenda

The pipeline talks are unfolding alongside a broader push by the Carney government to clear regulatory bottlenecks for major energy and infrastructure projects. Ministers Dominic LeBlanc and Steven MacKinnon launched consultations on May 9 on changes to federal environmental laws aimed at ensuring that federal reviews and decisions take no longer than one year.

The government also intends to table legislation soon that would further expedite the regulatory approval process for big energy and infrastructure builds, layering on top of Bill C-5's existing major projects framework. Five projects have already been designated for fast-tracking under that legislation, including the LNG Canada Phase 2 expansion in Kitimat, a small modular nuclear reactor at Darlington, and an expansion of the Port of Montreal.

Environmental groups have warned that compressed timelines risk gutting the integrity of impact assessments. Industry associations have countered that the existing process is so slow that it amounts to a de facto veto on private investment. Carney has positioned his approach as a middle path that delivers both decisions on time and rigorous environmental review.

What's next

Smith said Friday she expects the MOU to be signed within days, though Ottawa has been more cautious about putting a specific date on it. Alberta's submission to the Major Projects Office is still pencilled in for June, which functions as the practical deadline that both governments have an interest in meeting.

Once a framework is in place, the harder negotiation begins. A specific corporate proponent, a route, an Indigenous equity package and a final regulatory schedule all have to come together before a shovel can break ground. None of that is likely to happen before late 2026 at the earliest, and any actual construction would not begin until the second half of the decade.

For now, the political symbolism of a Carney-Smith handshake on a signed MOU would matter on its own. It would calm restive industry players, give Alberta's premier a tangible answer to the separatist movement, and let the prime minister claim that his nation-building agenda is producing results in the country's most strategically important resource province.