Pivoting West: What the Canada - Alberta MOU Means for Canadian Industry
On November 27th, 2025, Prime Minister Carney and Alberta Premier Danielle Smith struck an agreement which signals a fundamentally different approach to governance for the Federal Liberal Party. The Canada-Alberta Memorandum of Understanding (MOU) establishes a new federal-provincial relationship with Alberta, and offers an early window into Carney’s approach to federalism, economic development and industrial policy he plans on executing as Prime Minister.
This agreement is not merely a sign of encouragement for Alberta-based energy companies; it is a clear and concise message to industry nationwide that this government is committed to economic growth - even when it's at the expense of its traditional voter coalition. Understanding what this agreement means for your industry is essential for the creation of effective advocacy strategies during this Parliamentary session.
Details of the Canada-Alberta Memorandum of Understanding
At its core, the Canada-Alberta MOU outlines the federal government’s commitment to support the construction of a privately-funded bitumen pipeline from Alberta’s oil sands to the B.C. coast. From the federal perspective, this pipeline is a tangible commitment towards Canada becoming a leading global energy exporter, allowing over 1-million barrels a day to reach Canada’s Pacific coast to export into Asia’s energy hungry markets. For Alberta, this MOU is a direct sign that the Liberal government will no longer get in the way of its natural gas industry, which, when combined with mining, accounts for over 24% of the Province’s GDP.
The MOU is not a contract for the development of a pipeline. Rather, it is a political agreement aimed at establishing a cooperative framework between the federal and provincial government which provides the necessary foundation to encourage the private sector’s investment into a pipeline.
Along with designating an Alberta-B.C. pipeline as a Project of National Interest, the framework created by the MOU also aims to realign Alberta’s environmental regulation. This includes suspending the federal Clean Electricity Regulations (CER) and oil-and-gas emissions cap, two long-standing barriers to the expansion of the province’s natural gas industry. Simultaneously, the agreement reinforces Alberta’s carbon-pricing regime and expands the province’s Carbon Capture Incentive Program to Pathways Plus, an industry-led carbon capture program aimed at reducing the emissions across the energy sector.
This realignment strives to create the long-term regulatory stability necessary to attract private investment while ensuring that both parties’ remain committed to the province reaching net-zero emissions by 2050. The next step in this process will be a final settlement between the federal and Alberta governments on a new carbon pricing agreement by the deadline of April 1st, 2026.
Although nothing is certain, especially when considering the compatibility of the government’s agenda with necessary partners like Indigenous Groups and the B.C. government, the Canada-Alberta MOU represents a credible step towards the creation of a pipeline.
Disrupting the Status Quo of Federal Politics
Beyond the realignment of Alberta’s energy and industrial policy, the MOU suggests a broader change in the status quo of federal politics.
After nine years of Trudeau’s government, Canadians have gotten used to the Liberal Party placing environmental considerations at the forefront of their industrial policy. Public controversy over legislation like Bill C-69, which aimed to enhance federal regulation over energy projects, became a rallying call for environmental and conservative movements alike.
Prime Minister Carney’s MOU represents a significant pivot from this narrative, with the political fallout of the agreement encapsulated by the resignation of long-time Cabinet member Steven Guilbeault. As a figurehead for Trudeau’s environmental policy and a prominent public figure in Quebec, Guilbeault’s resignation was a direct response to this government's new approach to stimulating the Canadian economy.
Serving as Prime Minister Carney’s Quebec Lieutenant, the impact of his resignation on the Liberals’ popularity in Quebec remains yet to be seen, with many political analysts suggesting a possible downturn in the party’s performance specifically in the province’s critical urban ridings. The Liberal Party’s new representative in Quebec, sitting Minister of Government Transformation, Joël Lightbound, has noted that Canada’s second most populous province recognizes the need for “economic realism” in today’s world.
For the Conservatives, the MOU is yet another example of the Carney government pulling the rug from under their platform. Trudeau’s environmental policy has been the foundation of the Tories’ incredibly strong pro-development western base in recent years. With the MOU garnering the support of both Premier Smith and natural gas companies, the Conservatives are once again forced to pivot from their national strategy. Whether the effect of the MOU is strong enough to damage the Conservatives’ hold on the province is yet to be seen; however, it undoubtedly presents another challenge for the Official Opposition.
Dealmaking and Carney’s New Approach to Federalism
With the federal landscape undergoing significant changes, the MOU is also an example of Prime Minister Carney’s updated approach to federalism. Specifically, by highlighting his government's emphasis on bilateral negotiations and deal-making between provincial levels of government.
As illustrated by the MOU, individual negotiations allow for the federal government to be more flexible and direct in its discussions with individual stakeholders. As opposed to the broader, multilateral negotiations Trudeau’s government favoured, this approach reduces the ability of opposing stakeholder groups to stall and complicate a final settlement.
This new bilateral approach still comes with challenges within the context of the Canada-Alberta MOU. In opposition to the pipeline project, B.C. Premier David Eby has voiced his government's concerns over the agreement's approach to environmental regulation. A critical incentive for a pipeline project is the removal of the oil tanker ban from the B.C. coast, a federal regulation signed into law in 2019. Its removal would allow Canadian industry to capitalize on their extended capacity to export energy products to the high-demand markets of Asia. Despite this, Premier Eby, and Coastal First Nations Groups have voiced their steadfast support of the Oil Tanker Moratorium Act, suggesting that they will not sign on to its removal.
The federal government must secure a formal settlement to align these stakeholder groups with the needs of Alberta’s natural gas industry, however, both parties seem far away from reaching an agreeable settlement. Much like the agreement with Alberta, the federal government will pursue negotiations individually with these interest groups in order to realize the economic potential of a pipeline project, however, their ability to find a compromise will be tested.
What the Canada-Alberta MOU Means for Your Industry
Despite its focus on Canada’s energy sector, the Canada–Alberta MOU agreement offers an early window into the Carney government’s priorities, and how it is willing to engage with industry.
Put simply, Carney’s emphasis on economic growth during the April campaign was not just rhetoric. The Prime Minister’s Office has demonstrated a willingness to advance the growth of Canadian industry even when it requires difficult political trade-offs. This was reinforced in the 2025 federal budget, which saw the vast majority of government expenditure focused on catalyzing private sector investment in the Canadian economy. A significant pivot from the Trudeau government's heavy emphasis on social programs.
Beyond this shift in priorities, the MOU has demonstrated this government’s desire to engage with industry. If strong, data-driven arguments are made in favour of policy that would support or enable the growth of Canadian industry, this government has demonstrated a willingness to listen and cooperate.
The Trudeau government’s emphasis on social and environment initiatives are taking a back seat to the Federal Liberal’s new priorities of making Canada a leading economic power in the G7. What this means for industry leaders is that the political considerations have been simplified; if you can point to a recommendation or support that can develop your industry’s competitiveness, productivity, or employment level, this government will be receptive.
As Canada’s economy pivots to address an evolving global landscape, it's essential that you don’t get left behind. To ensure your industry is able to respond, Impact’s Team of Economists and Public Affairs Specialists are ready to develop data-driven arguments that this government can’t ignore.