Carney's Pipeline Pragmatism

If you paid any attention to the news this week you already know the big news of the week... the Memorandum of Understanding (MOU) between Alberta Premier Danielle Smith and Prime Minister Mark Carney to support various energy projects for Alberta, including a controversial bitumen pipeline to the northern BC coast. I won’t get into the details...you can read the MOU here...but the really interesting aspect for me is this is considered by some (including me) to be a political PR win for both Smith and Carney. Either by design or by the reality of an increasingly vocal Alberta separatist movement. Carney is getting a rough ride over backing a (theoretical at this point) oil pipeline from the lefter side of a Liberal party that PM Carney months ago signaled he was steering into the political centre lane.

Carney received two standing ovations at the Calgary Chamber of Commerce after releasing the MOU. Danielle Smith got booed at a UCP party event after the announcement. So this is not a black & white issue.

What I don’t get is why so many people in the media and the progressive left Liberals are surprised or upset about this MOU. Carney literally campaigned on ‘making Canada an energy superpower in both clean and conventional (oil & gas) energy.’ He even said the word ‘pipelines’ during his campaign. Polls show a slight majority of Canadians are OK with exploiting oil due to our precarious new relationship with the US under Trump.

Prime Minister Carney’s a smart guy. He knows the politics of pipelines, the economics of energy and the future demand for clean energy as well as oil. The facts are clear...clean energy demand is on the rise at an astounding rate...oil & gas are at or near the peak, heading for a slowdown as we approach 2050.

I think the Alberta-Ottawa MOU was a very smart move and it sends three distinct messages to (at least) three different audiences.

We’ve been unexpectedly thrust into a new global trade environment and time is not on our side. Countries around the world are scrambling to find certainty in a chaotic trade environment. It’s never going back to what was once considered ‘normal’.

PM Carney has spent the past six months travelling the globe, talking to dozens of world leaders about potential trade and security agreements to find like minded partners in this chaotic new world reset. He’s built up a growing portfolio (or at least a Rolodex) of proposed or signed agreements. Carney’s visited Europe, Ukraine, Malaysia, South Korea, the United Arab Emirates, Indonesia and other ASEAN countries. On the sidelines at the G-20 in South Africa he met with Prime Minister Modi of India - one of the fastest growing economies in the world, with a population of 1.4 billion people. A contingent from Sweden…including the King & Queen travelled to Canada in November to pitch a partnership with Saab to build Grippen fighter jets in Canada…a direct competitor to the US F-35 jets that Canada has on order.

Carney’s selling Canada as a reliable alternative North American resource hub for energy, critical minerals, AI Enterprise software, military hardware, technology and other sectors. But we need investment to develop the infrastructure to extract, refine, build, transport and ship these products to trading partners around the world.

Unfortunately our track record for developing and exploiting our abundant natural resource has been less than stellar over the past few decades. Canadian projects historically have been mired in red tape, jurisdictional and environmental reviews and other regulations that slow down or kill investments into Canada’s resource sectors like oil & gas as well as mining. That’s what Carney’s Major Projects Office is all about...a one stop shop to pull the various aspects of complex deals together as quickly as possible.

His message to the world with this MOU is that Canada is getting back in the game...ready to do whatever’s necessary to get Canada’s resources out of the ground and shipped to those global markets. We’re open for business...and by the way...we’re right next door that huge unstable market south of the border that we’ll have better access to at some point.

One of the realities of Alberta’s oil & gas industry that Mark Carney knows very well is that demand for oil is forecast to peak sometime between 2030 and 2035. Based on the MOU, if everything went as Alberta hopes it will... it won’t see shovels in the ground until 2029. And if they can negotiate a path through BC to the coast after consultation and agreement with BC’s coastal first nations. At this point they are a hard no and unlikely to change their position.

So there’s that.

But Danielle Smith has a problem (that could soon become PM Carney’s)...a frustrated, growing and very vocal separatist movement threatening to call for a referendum on an Independent Alberta. They also happen to be a significant portion of her United Conservative Party (UCP) base. I really didn’t fully understand how deep this issue runs for Albertans until I heard a CBC pundit put it this way:

‘Oil is intrinsic to Alberta’s identity the same way that language is to Quebec’s’

Those of us that remember the tensions around the 1995 referendum in Quebec understand how something similar to that precarious moment rising out of Alberta at this crucial point in time would be exploited by bad actors from outside and within Canada. A very dangerous prospect for Canada’s success in the current fraught US trade negotiations and CUSMA renegotiations next year.

So to me, this looks like a move to address a national unity issue before it blossoms into a full-blown crisis. It’s a political balancing act but PM Carney is willing to spend some political capital on this MOU. Carney may also be calling Alberta’s bluff on how economically viable a new pipeline would be for investors...in an environment of currently sagging oil prices and heading into a future of reduced demand due to electrification of just about everything. He’s laying out the opportunity, and it’s up to Alberta, the oil industry and pipeline sectors to come up with investors willing to take this project on. We’ll see if anyone steps up to the plate.

But the MOU isn’t just about oil & gas...it’s laying out a plan for investment into rail, power generation, the electrical grid and other industries like AI data centres that are heavy users of electricity. That’s why this MOU is a win even if the pipeline never gets built.

Here’s the preface of the MOU:

At this pivotal global moment, Canada and Alberta, working closely with Indigenous Peoples and industry, must work together cooperatively, and within their respective jurisdictions, to foster the conditions necessary for infrastructure, including pipelines, rail, power generation, a strong and integrated transmission grid, ports and other means that will unlock and grow natural resource production and transportation in Western Canada. As a result, Canada will be able to reach its international export goals and develop new technologies including Artificial Intelligence (AI), and, through innovation and intergovernmental cooperation, be a source of clean energy to lower global greenhouse gas (GHG) emissions.

So I see this MOU as a message to Alberta recognizing it’s identity with oil and the national unity issues that would result from outright declining approval for a new pipeline... while also saying the federal government will do it’s part of this agreement if you can make a business case for investment that includes the emissions targets as well as consulting and partnering with BC and the affected coastal first nations.

The message to Trump is pretty clear...’Canada is moving on without you’. The ‘who cares’ is implicit.

As the official White House tweet above shows (none of which is true)...nobody...not even Donald Trump knows what he’s going to do or say from one moment to the next. That’s just fact.

Despite Trump’s blathering about how much money the US is raking in through tariffs, the ‘real’ American economy is crushing small business and consumers...and it’s getting worse every day. Between bad economic policies like using tariffs as leverage over allies, masked ICE agents raiding farms & construction sites looking for migrants to deport (including a Hyundai car factory under construction by South Koreans) and Trump’s blatant pay to play corruption schemes, even his MAGA base is starting to regret their vote for Trump last fall.

The US economy is in real trouble. Americans now know they are paying the tariffs. Migrant labour is not showing up for work in fear of being deported. Manufacturing businesses are laying off workers to save costs due to tariffs. And in January 2026, health care premiums will be going up significantly...in some states by up to 200% which translates in thousands of dollars for some families.

As of late 2025, 23 States are now considered in or near recession with another 12 ‘treading water’ that could tip into recession in the near future. Some people claim that Trump’s so out of touch these days that he really doesn’t know what’s going on with the economy.

The stock market is going great guns… almost entirely supported by huge tech investments in AI data centres…a big bet that some are warning is a bubble that could burst in the near future. An event that could make the 2008 financial crises pale in comparison. These power-hungry data centres are also driving up the cost of electricity…another affordability blow to American families.

He thinks by just saying everything is cheaper that people will believe him despite their lived reality trying make ends meet. (If you think that’s crazy… I’ve seen polls that showed MAGA followers believe Trump over any other source of information including traditional news media, clergy, doctors, community leaders and even family.) Truly frightening.

Meanwhile Trump’s cognitive disabilities are becoming more apparent as his filters are failing... he’s regularly lashing out at female reporters that have asked legitimate questions with recent snarky responses like ‘Quiet Piggy!’ and ‘Are you stupid?’.

You can bet PM Carney has long known that as the US economy continues to get worse… Canada’s leverage gets better. Surely Trump is well aware of Carney’s travel to distant places to diversify Canada’s trade partnerships. The Alberta MOU is another step away from Canada’s dependence on the US and literally a pipeline to Asia and other Pacific markets. Carney has clearly stated that Canada is ready to talk whenever the US comes back to the negotiating table.

Next week Carney is planning to go to Washington for an event around the FIFA soccer events co-hosted by Mexico-Canada & the US in 2026. It will allow him a chance for a casual temperature check to see if Trump is ready to talk about trade again...now that Carney’s holding a lot more cards than he had a few months ago.

The ball is in Trump’s court...we’ll soon know if he believes he’s winning or if he cares enough about anyone other than himself to actually do what’s right for America and it’s two closest trading partners.