He has had few missteps since becoming prime minister, but PM Mark Carney’s sweetheart deal with the Alberta government may come back to haunt his government.
As last week’s column accurately predicted, Carney and Alberta Premier Danielle Smith signed a memorandum of understanding last Friday that will roll back the federal industrial carbon tax in that province and potentially pave the way for another oil pipeline to B.C.’s west coast.
Whether that pipeline materializes – there are still significant hurdles in its way – remains to be seen, but giving Alberta a much better deal than other provinces when it comes to a federal tax could become politically problematic.
While all other provinces will see their carbon price rise to $170 a tonne by 2040, Alberta’s will rise to just $130 a tonne, giving that province a potentially significant edge over other provinces when it comes to attracting investments from the private sector.
B.C. Premier David Eby was quick to cry foul, and it is likely other premiers may weigh in as well and object to the now two-tier carbon tax.
On more than one occasion, Eby has linked Smith’s backing of holding a referendum on Alberta separating from Confederation with receiving favourable treatment from the Carney government.
While Smith does not support her province separating from the rest of the country, she has danced around the issue. She is no doubt concerned about keeping her United Conservative Party together, as polls show about half of her party’s supporters back independence.
While there is no evidence that the Carney government was motivated by the separation issue when it came to giving Alberta its special deal, it certainly can’t be dismissed out of hand.
Still, potentially paving the way for another oil pipeline and lessening financial pressures on Alberta’s oil sector fits Carney’s prioritizing critical minerals and natural resource projects as a central part of his economic vision.
His deal with Smith gives the Alberta premier a pretty big win, and it will likely go a long way to placate those in her party who favour independence.
But this may come at a big price for this province. Carney’s party won 20 seats in B.C. in the last federal election and just three seats in Alberta.
Eby has warned that pushing an oil pipeline through northern B.C. to the coast could put critical minerals mine projects, LNG projects and even the North Coast power line at risk by damaging relations with First Nations, some of whom are partners in some of those projects.
If any of these projects ultimately fail because of a pipeline being pushed by the federal government, there could be a backlash among B.C. voters, many of whom voted for Carney last time around.
Coastal First Nations, which consists of nine First Nations in northwest B.C., issued a strongly worded statement shortly after the Carney-Smith deal was announced. They said they cannot support such a pipeline because it will lead to greater tanker traffic off the coast and therefore increase the risk of a potentially catastrophic oil spill there.
The debate and fight over the pipeline will continue for the foreseeable future, and while Smith has said construction could start as early as Sept. 1st, 2027, there is absolutely no evidence to support that kind of timeline.
The federal government will declare the pipeline to be in the “national interest” this October, but there remains no indication of a private sector proponent becoming involved.
In the meantime, keep an eye on the premiers regarding the new industrial carbon pricing scheme. When it comes to giving provinces special treatment, federal governments (Conservative and Liberal) usually afford Quebec that kind of thing.
But now Alberta seems to be the new Quebec. Something tells me the other provinces will not be pleased.
Keith Baldrey is Global TV’s legislature bureau chief.
Keith.Baldrey@globalnews.ca
