{"id":52667,"date":"2026-05-20T08:51:05","date_gmt":"2026-05-20T08:51:05","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/52667\/"},"modified":"2026-05-20T08:51:05","modified_gmt":"2026-05-20T08:51:05","slug":"once-a-climate-leader-canada-is-now-doubling-down-on-oil","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/52667\/","title":{"rendered":"Once a climate leader, Canada is now doubling down on oil"},"content":{"rendered":"

Before he became prime minister of Canada, Mark Carney was perhaps one of the world\u2019s biggest supporters of the idea that climate action was good business. He led the clean energy investment fund for Brookfield, one of the world\u2019s largest financial firms, and founded a global alliance of bankers and politicians who wanted to channel their resources toward green energy. When he took over from outgoing Prime Minister Justin Trudeau<\/a>, many expected that he would follow the previous Liberal leader\u2019s ambitious climate agenda, which included taxing fossil fuels and subsidizing clean technology.\u00a0<\/p>\n

But just like in Carney\u2019s beloved<\/a> sport<\/a> of hockey<\/a>, momentum in the climate world can change fast. In the year since he took over, Carney has unveiled a suite of new policies to gut Canada\u2019s ambitious climate regulations and support the country\u2019s powerful fossil fuel industry. This reversal reached a climax last week when he struck a deal with the province of Alberta to prop up its tar sands oil industry and vowed to expand the country\u2019s power grid through the use of natural gas.<\/p>\n

Carney is pitching the reversal as a political and economic necessity. Canada is facing the prospect of a severe economic downturn as a result of President Trump\u2019s disruptive trade agenda, and a group of conservatives in Alberta are waging a campaign to secede from Canada<\/a> altogether. He has claimed that the country can achieve economic security by investing in oil and gas production while still making progress toward reducing its own carbon emissions.<\/p>\n

\u201cIt will be an opportunity to accelerate the energy transition across Canada, and it\u2019s also an opportunity for Canada to be a reliable supplier for partners across the globe, and to do so in a manner that makes Canada more prosperous and independent,\u201d said Carney in announcing the strategy<\/a>.\u00a0<\/p>\n

The reversal reveals a stark truth about the direction of global climate action: Despite the rapid deployment<\/a> of clean energy, even countries and politicians once seen as climate leaders are turning to fossil fuels to protect against the turmoil of Trump\u2019s trade disputes and the war in Iran<\/a>.\u00a0<\/p>\n

But Carney\u2019s new strategy doesn\u2019t seem to have pleased anyone. Major oil producers and conservatives in Alberta are still pressuring Carney for further concessions, and a broad spectrum of left-wing politicians and civil society groups have condemned it as short-sighted. The critics argue that doubling down on fossil fuel exports is the wrong move at a time when the rest of the world may be shifting away from them.<\/p>\n

\u201cThe problem is we\u2019re defaulting back to what Canada\u2019s known how to do in the past, rather than what the world\u2019s going to need in the future,\u201d said Simon Donner, a climate scientist at the University of British Columbia who served as chair of the federal government\u2019s climate policy advisory board until he resigned late last year<\/a>.\u00a0<\/p>\n

Carney has already rolled back several of Trudeau\u2019s climate initiatives. He scrapped Canada\u2019s federal electric vehicle mandate<\/a> and eliminated the country\u2019s unpopular consumer carbon tax<\/a>, which added a surcharge on gas stations and power bills. The one major policy he left alone was the \u201cindustrial carbon price<\/a>,\u201d which charges polluters a fee for every ton of carbon dioxide they emit. The nation\u2019s biggest emitters are multinational oil and gas companies, which produce sticky crude from the massive \u201ctar sands\u201d fields in Alberta; the oil sector produces about 30 percent of Canada\u2019s emissions<\/a>, more than buildings or cars.<\/p>\n

Canada and Alberta have a mutual dependence. Oil makes up more than 15 percent of Canada\u2019s export volume<\/a>, and Alberta\u2019s oil wealth makes it a net contributor to the federal budget. Under the Canadian constitution, provinces have control over natural resources, and Alberta leaders have long viewed the industrial carbon tax as a threat to their sovereignty. But the oil industry in Alberta needs help from the Liberal government too. The inland province is producing more oil than it can sell, and the industry\u2019s future growth depends on building another pipeline to the Pacific Ocean, which needs federal support. (The existing pipeline to the Pacific is nearing capacity. Oil producers are also seeking to build new pipelines to the United States<\/a>.<\/p>\n

Last week, Carney and Alberta Premier Danielle Smith unveiled a \u201cgrand bargain\u201d<\/a> meant to resolve this conflict: Carney removed a proposed hard cap on carbon emissions<\/a> from the oil sector, and in exchange Alberta agreed to support a long-term increase in carbon prices. The federal government will also expedite permitting for a new Pacific Coast pipeline, while oil producers agreed to build a massive carbon capture system<\/a> that would offset emissions from oil drilling.<\/p>\n

Climate advocates in Canada say the final deal is toothless, and makes major concessions to the oil and gas industry. The deal will lower the headline price of the industrial carbon tax and slow down the rate of the price increase by three-quarters, whereas Carney had at first proposed to tighten the price. The proposed carbon capture project has also shrunken to a fraction of its original size, and the oil industry hasn\u2019t agreed to it yet.<\/p>\n

\u201cIt would have been a big enough motivator to find those emissions cuts, but it wouldn\u2019t have jeopardized the possibility of oil and gas companies making money,\u201d said Julia Levin<\/a>, the associate director for national climate policy at the nonprofit Environmental Defence. She noted that under the previous framework, the per-barrel cost of the carbon tax comes out to the price of a Timbit,<\/a> the Canadian equivalent of a Munchkin donut hole: about 50 cents. Now, she says, \u201cthe companies don\u2019t have to do anything at all for 15 years.\u201d\u00a0<\/p>\n

\"AA Syncrude oil sands mining facility near Fort McKay, Alberta. Prime Minister Mark Carney is relying on oil produced in Alberta to help Canada weather the economic turbulence of President Trump\u2019s trade war.
\n Photo by Ed Jones \/ AFP via Getty Images<\/p>\n

Even early news of a potential deal triggered a revolt within Carney\u2019s own party, leading to the resignation of his climate minister<\/a>, Steven Guilbeault, as well as two members of the government\u2019s independent climate advisory panel. But the industry isn\u2019t satisfied either. The chief executive of the Canadian oil company Cernovus said last week<\/a> he doesn\u2019t think the country should have a carbon price at all, saying it \u201cdoesn\u2019t incent us to decarbonize,\u201d and some producers have said they still worry about making money even under the loose regulations. A leader of the Alberta separatist campaign said the deal only made him more convinced<\/a> the province needs to leave Canada.<\/p>\n

Richard Masson<\/a>, a longtime oil sands executive who has worked for Shell and the government of Alberta, said that companies should see the carbon tax as the price of doing business in a country where most voters want some action on climate change.<\/p>\n

\u201cThe producers will probably take a little bit less return, but in the world we\u2019re in, there\u2019s enough money to go around,\u201d he said. \u201cYou\u2019re saying, \u2018I\u2019m going to spend a premium on this to prevent having the world turn its back on me.\u201d<\/p>\n

Masson also said that the ultimate climate impact of the deal depends on whether a pipeline to the Pacific actually comes together. Carney has already eased environmental permitting laws to make it easier, and last month he created a $25 billion development fund<\/a> that could help pay for construction. But there is still no private company that has come forward to build it, and a number of First Nations tribes with treaty rights on the Pacific coast have rejected the idea<\/a>.\u00a0<\/p>\n

\u201cNo offer of equity or ownership will change our position, and no proponent is acceptable to us,\u201d said<\/a> Marilyn Slett, president of the Coastal First Nations, in response to the pipeline plan. First Nations have ironclad consultation rights under British Columbia provincial law, and securing a pipeline without tribal agreement will be impossible.<\/p>\n

Even so, in what seemed to be a further embrace of fossil fuels for economic security, Carney also unveiled a \u201cnational electricity strategy<\/a>\u201d at the same time as the Alberta deal. This strategy seeks to double the size of Canada\u2019s grid by 2050 through investments in renewable energy and a new network of transmission lines connecting the provinces. But it also calls for natural gas <\/a>to have a major role on Canada\u2019s future power grid, even though the country has made major investments in zero-carbon power and gets most of its electricity<\/a> from hydropower dams and nuclear reactors.\u00a0<\/p>\n

Here again, the Carney government framed the decision as a necessary step toward geopolitical resilience. The strategy claims that \u201cCanada\u2019s economic growth and long-term competitiveness will depend on its ability to attract and retain investment in high-growth, electricity-intensive sectors, including artificial intelligence \u2026 liquid natural gas export facilities, mining, and critical minerals.\u201d<\/p>\n

Underlying all these moves is the assumption that fossil fuels will provide protection against economic uncertainty. As long as Canada can extract and export natural resources, it will be able to balance its budgets and keep its citizens safe. But despite Carney\u2019s reputation as a shrewd central banker, critics of his government view the prime minister\u2019s new strategy as short-sighted \u2014 Carney is pinning his economic hopes on the sale of a commodity that the world is starting to abandon.<\/p>\n

\u201cThis is the sort of decision that they\u2019re probably happy about today, and we will look back in 10 years and think, \u2018what the hell were we doing?\u201d said Donner, the former chair of the government\u2019s climate advisory board.<\/p>\n