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

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
Low oil prices could have big consequences for Alberta’s finances

From the Fraser Institute
By Tegan Hill
Amid the tariff war, the price of West Texas Intermediate oil—a common benchmark—recently dropped below US$60 per barrel. Given every $1 drop in oil prices is an estimated $750 million hit to provincial revenues, if oil prices remain low for long, there could be big implications for Alberta’s budget.
The Smith government already projects a $5.2 billion budget deficit in 2025/26 with continued deficits over the following two years. This year’s deficit is based on oil prices averaging US$68.00 per barrel. While the budget does include a $4 billion “contingency” for unforeseen events, given the economic and fiscal impact of Trump’s tariffs, it could quickly be eaten up.
Budget deficits come with costs for Albertans, who will already pay a projected $600 each in provincial government debt interest in 2025/26. That’s money that could have gone towards health care and education, or even tax relief.
Unfortunately, this is all part of the resource revenue rollercoaster that’s are all too familiar to Albertans.
Resource revenue (including oil and gas royalties) is inherently volatile. In the last 10 years alone, it has been as high as $25.2 billion in 2022/23 and as low as $2.8 billion in 2015/16. The provincial government typically enjoys budget surpluses—and increases government spending—when oil prices and resource revenue is relatively high, but is thrown into deficits when resource revenues inevitably fall.
Fortunately, the Smith government can mitigate this volatility.
The key is limiting the level of resource revenue included in the budget to a set stable amount. Any resource revenue above that stable amount is automatically saved in a rainy-day fund to be withdrawn to maintain that stable amount in the budget during years of relatively low resource revenue. The logic is simple: save during the good times so you can weather the storm during bad times.
Indeed, if the Smith government had created a rainy-day account in 2023, for example, it could have already built up a sizeable fund to help stabilize the budget when resource revenue declines. While the Smith government has deposited some money in the Heritage Fund in recent years, it has not created a dedicated rainy-day account or introduced a similar mechanism to help stabilize provincial finances.
Limiting the amount of resource revenue in the budget, particularly during times of relatively high resource revenue, also tempers demand for higher spending, which is only fiscally sustainable with permanently high resource revenues. In other words, if the government creates a rainy-day account, spending would become more closely align with stable ongoing levels of revenue.
And it’s not too late. To end the boom-bust cycle and finally help stabilize provincial finances, the Smith government should create a rainy-day account.
Alberta
Governments in Alberta should spur homebuilding amid population explosion

From the Fraser Institute
By Tegan Hill and Austin Thompson
In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.
Alberta has long been viewed as an oasis in Canada’s overheated housing market—a refuge for Canadians priced out of high-cost centres such as Vancouver and Toronto. But the oasis is starting to dry up. House prices and rents in the province have spiked by about one-third since the start of the pandemic. According to a recent Maru poll, more than 70 per cent of Calgarians and Edmontonians doubt they will ever be able to afford a home in their city. Which raises the question: how much longer can this go on?
Alberta’s housing affordability problem reflects a simple reality—not enough homes have been built to accommodate the province’s growing population. The result? More Albertans competing for the same homes and rental units, pushing prices higher.
Population growth has always been volatile in Alberta, but the recent surge, fuelled by record levels of immigration, is unprecedented. Alberta has set new population growth records every year since 2022, culminating in the largest-ever increase of 186,704 new residents in 2024—nearly 70 per cent more than the largest pre-pandemic increase in 2013.
Homebuilding has increased, but not enough to keep pace with the rise in population. In 2024, construction started on 47,827 housing units—the most since 48,336 units in 2007 when population growth was less than half of what it was in 2024.
Moreover, from 1972 to 2019, Alberta added 2.1 new residents (on average) for every housing unit started compared to 3.9 new residents for every housing unit started in 2024. Put differently, today nearly twice as many new residents are potentially competing for each new home compared to historical norms.
While Alberta attracts more Canadians from other provinces than any other province, federal immigration and residency policies drive Alberta’s population growth. So while the provincial government has little control over its population growth, provincial and municipal governments can affect the pace of homebuilding.
For example, recent provincial amendments to the city charters in Calgary and Edmonton have helped standardize building codes, which should minimize cost and complexity for builders who operate across different jurisdictions. Municipal zoning reforms in Calgary, Edmonton and Red Deer have made it easier to build higher-density housing, and Lethbridge and Medicine Hat may soon follow suit. These changes should make it easier and faster to build homes, helping Alberta maintain some of the least restrictive building rules and quickest approval timelines in Canada.
There is, however, room for improvement. Policymakers at both the provincial and municipal level should streamline rules for building, reduce regulatory uncertainty and development costs, and shorten timelines for permit approvals. Calgary, for instance, imposes fees on developers to fund a wide array of public infrastructure—including roads, sewers, libraries, even buses—while Edmonton currently only imposes fees to fund the construction of new firehalls.
It’s difficult to say how long Alberta’s housing affordability woes will endure, but the situation is unlikely to improve unless homebuilding increases, spurred by government policies that facilitate more development.
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