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Alberta

Premier Smith negotiates publicly with PM Trudeau: cancel ‘just transition’ and collaborate on carbon capture

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Letter from Premier Smith to Prime Minister Trudeau

Premier Danielle Smith invites Ottawa to collaborate with Alberta on carbon capture, utilization and storage investment and halt introduction of Just Transition legislation and oil and gas emissions cap.

Dear Prime Minister:

I am writing in follow up to our meeting of February 7th, during which we discussed the need for the Government of Canada to halt introduction of the proposed Just Transition legislation and implementation of unachievable targets and measures under the federal Emissions Reduction Plan (ERP) such as the Clean Electricity Regulations (CER) and oil and gas sector emissions cap.

As a much more productive alternative, I invited your government to agree to commencing a collaborative effort between Ottawa and Alberta to develop a series of cooperative initiatives to attract investment and workers into Alberta’s emerging, conventional and non-conventional energy sectors while substantially reducing Canada’s and Alberta’s net emissions.

In that meeting, you expressed a willingness to pursue this course of collaborative action, but requested it be commenced promptly. The morning following my return to Alberta, I met with several of my ministers regarding this issue and can advise as follows.

The Government of Alberta is prepared to work with the federal government on a coordinated approach for a carbon capture, utilization and storage (CCUS) incentive program for the purpose of net emissions reductions in our province while attracting billions in new investments for Alberta-based oil and gas projects, electricity, manufacturing and other sectors.

To this end, we propose coordinating a federal CCUS income tax credit with an expansion of our current Alberta Petrochemicals Incentive Program (APIP) to include CCUS projects. This new incentive program would be in addition to the over $1.8 billion already invested into CCUS projects across the province by the Government of Alberta as well as our province’s additional implicit contribution to CCUS made through our current royalty regime.

Our government is also willing to discuss with your government expanding this coordinated approach to incentivizing other emerging emission reducing technologies as well, though we suggest beginning with agreement on a coordinated CCUS incentive program, so we are able to establish a successful foundation on which to build upon.

To this end, I request that we immediately create a federal/provincial minister-led working group with the objective of reaching agreement on a coordinated provincial-federal CCUS incentive program in the coming weeks.

Prime Minister, I must make it clear that the above invitation for cooperation and collaboration on this CCUS proposal and other energy and climate initiatives comes with one non-negotiable condition.

It is that the federal government refrain from introducing any new federal legislation or policies that materially impact Alberta’s oil and gas resource development, management or workforce participation without the full involvement, consultation and consent of Alberta.

This includes the contemplated Just Transition legislation and implementation of unachievable targets and measures under the federal Emissions Reduction Plan (ERP) such as the Clean Electricity Regulations (CER) and oil and gas sector emissions cap.

Each of these initiatives, as currently understood, would pose an unconstitutional and existential threat to the Alberta economy and the jobs of hundreds of thousands of Albertans.

As an alternative to this policy package of economic destruction, Alberta proposes working collaboratively with the federal government on aggressively advancing emission reducing technologies in Alberta as outlined above while simultaneously increasing export of LNG through the lens of replacing higher emitting fuels around the world to meet aggressive but achievable overall emissions reduction in Alberta’s oil and gas and other sectors. Ideally, our government would like to incorporate these collaborative federal-provincial initiatives into our soon-to-be-released Alberta Emissions Reduction and Energy Development Plan.

I must once again emphasize to you, Prime Minister, that although Alberta is willing to work as an active partner with the federal government on a coordinated approach to reducing Alberta’s and Canada’s net emissions, under no circumstances will our province accept the imposition of arbitrary and unachievable targets or policies that spell the end of meaningful long-term investment in Alberta’s energy sector, and as a result, the imminent phase out of Alberta’s largest industry. In such circumstances, our government would have no other choice but to oppose these destructive policies using every tool at our disposal in order to protect Albertans, their jobs and our province’s future.

Prime Minister, this issue is far larger and more important than you or I. There are literally hundreds of billions in public revenues and investments, and millions of jobs, riding on Alberta and Ottawa working together – instead of in conflict – on energy and environmental issues to create an attractive and certain investment climate that millions around the world want to invest in and move to.

Failure to do so will not only undermine Canada’s prosperity by driving billions in energy investment and revenue out of Canada and into the hands of the world’s most brutal and undemocratic regimes, but will also result in increased energy poverty and food insecurity in many of the world’s most impoverished countries, a loss of our nation’s global influence, and most ironically, an increase in the world’s global emissions due to an increased use of coal, as opposed to LNG, by developing nations to meet increasing world demand for electricity.

Canada has the potential to become a global energy superpower with all of the economic and political influence for good that such standing would grant us. We can and must seize this opportunity without delay. Please come to the table and work collaboratively with Alberta on likely the most important economic issue facing this country in a generation.

I look forward to reading your response and to learning of the appointment of your government’s side of the federal/provincial minister-led working group for the CCUS incentive program so that our two governments can take our first steps in this critical collaborative effort.

Alberta

Big win for Alberta and Canada: Statement from Premier Smith

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Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:

“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.

“This is precisely what I have been advocating for from the U.S. administration for months.

“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.

“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.

“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.

“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”

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Alberta

Energy sector will fuel Alberta economy and Canada’s exports for many years to come

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From the Fraser Institute

By Jock Finlayson

By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.

Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.

In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.

Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).

Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.

The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.

Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.

Jock Finlayson

Senior Fellow, Fraser Institute
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