Canada and Alberta have signed a new deal aiming to create an Indigenous co-owned pipeline to Asian markets, boost oil production and suspend key federal energy regulations.
Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a memorandum of understanding Thursday. The agreement includes a one-million-barrel-per-day bitumen pipeline project, declared of national interest. Both governments committed to working toward approval, private financing and construction.
Under the deal, the federal government has agreed not to implement the oil-and-gas emissions cap and to suspend the Clean Electricity Regulations in Alberta. The two levels of government will partner with the Pathways Alliance to build what they call the world’s largest carbon-capture, utilisation and storage project. By April 1, 2026, they will propose new carbon-pricing rules and methane-reduction targets. Over the next decade, the province will work to reduce methane emissions by 75 per cent.
Premier Smith called the agreement “Alberta’s moment of opportunity to take the first steps toward being a global energy superpower,” adding it marked a new era of co-operation for development and sustainability.
“Today is a new starting point for nation building as we increase our energy production for the benefit of millions and forge a new relationship between Alberta and the federal government,” she said.
In a statement, the prime minister said the partnership will help build a stronger and more sustainable economy for the province and country.
“We will make Canada an energy superpower, drive down our emissions and diversify our export markets. We want to build big things, and we’re building bigger and faster together,” Carney said.
The agreement would pave the way for adjustments to the tanker ban and allow Alberta energy companies to market their environmental performance internationally.
The proposed Indigenous co-owned pipeline is intended to reduce Canada’s dependence on a single natural-resource customer. It would supplement the Trans Mountain expansion, adding 300,000 to 400,000 barrels per day destined for Asian markets.
Alexander First Nation Chief George Arcand Jr. said in a statement the partnership marked a positive step toward long-term economic benefits for First Nations and improved government-to-government relationships.
“My hope is that it will create lasting economic benefits for First Nations and strengthen the relationships that matter most — government-to-government and community-to-community. Indigenous equity ownership is shaping Canada’s economy, and when our voices help guide every decision, we build trust and a future that will support generations to come,” Arcand said.
Along with the province’s push for carbon capture and other emissions-reduction technologies, the federal government’s promise to forgo the emissions cap is viewed by industry as a boost to oil production and private-sector jobs. The deal is said to position Alberta to reach production targets of six million barrels per day by 2030 and eight million by 2035.
Business Council of Alberta president Adam Legge said the emissions-cap removal was a condition of the MOU and welcomed the news.
“Now, without the cap, Canada truly can grow energy production, export globally, and generate the investments and jobs that will help deliver a better quality of life for all Canadians,” Legge said.
Kendall Dilling, president of the Pathways Alliance, said the agreement supports Canada’s ambition to become an energy superpower, with Alberta bitumen among the lowest-emission heavy oils in the world. According to the prime minister’s office, the “Pathways Plus” project will reduce emissions while delivering more than $16 billion in GDP and 40,000 jobs.
The agreement also outlines plans to allow Alberta to build and operate competitive nuclear power generation. Officials say this would reinforce the electricity grid to power sovereign AI data centres and build large transmission interties with B.C. and Saskatchewan, giving the three provinces access to low-carbon, low-cost power.
