Striking A "Grand Bargain": Alberta's Bold Pipeline Pitch A New Model For Nation-Building Energy Projects?

In a move that could reshape Canada's energy infrastructure landscape, the Alberta government has announced its intention to act as proponent for a proposed crude oil pipeline to British Columbia's northwest coast. This approach—government-led, industry-supported, and early-stage Indigenous-partnered—is a novel approach for energy infrastructure and bears resemblance to the collaborative frameworks of public-private partnerships often used in public infrastructure projects.

This development builds on the framework outlined in our recent bulletin, A New Blueprint For Nation-Building Projects: Canada's Major Projects Office Takes Shape. That bulletin explored the federal government's efforts to streamline approvals and coordinate nation-building infrastructure through the newly established Major Projects Office. Alberta's pipeline initiative may be one of the first major tests of that framework in action.

Government-Led Energy Initiatives: Implications for Industry and Investors

Alberta is leading a technical advisory group to submit a pipeline proposal under the Building Canada Act, backed by $14 million for early planning. This marks a shift toward government-led infrastructure, aiming to reduce uncertainty and align with national priorities. The technical advisory group will be overseen by a panel of seasoned executives and directors currently or formerly associated with: Cenovus Energy, Vermilion Energy, Enbridge, TransMountain, South Bow TC Energy, Talisman Energy and Blackfish Enterprises, along with government ministers and board directors. Alberta has engaged Indigenous groups from both provinces, emphasizing co-ownership and cultural inclusion. While some B.C. First Nations have voiced opposition, the strategy aims to reflect diverse governance and community contexts.

We are starting to see other unique and proactive approaches to large-scale energy infrastructure in other provinces, such as British Columbia's proposed Energy Statutes Amendment Act aimed at enabling the streamlined development and construction of a new much-needed transmission line to meet growing electricity demand for nation-building industrial projects in the mining, natural gas, LNG and other emerging sectors.

These province-led initiatives could reshape how energy projects are developed in Canada by accelerating timelines, improving and strengthening Indigenous partnerships, and reducing early-stage risk—offering greater certainty for industry and investors.

Federal Red Tape: Can Alberta Cut Through?

While the Building Canada Act streamlines approvals and provides a coordinated process for projects subject to multiple regulatory regimes, significant legal barriers remain. The Oil Tanker Moratorium Act (Bill C-48), enacted in 2019, prohibits oil transport through northern B.C. waters and is not currently listed among laws eligible for exemption under the Act. Cabinet would need to explicitly add it to Schedule 2 of the Building Canada Act for exemption, which has not occurred. Additionally, the Federal Cap on Oil and Gas Sector Emissions may stifle the production required to fill the pipeline profitably. Recent federal discussions suggest the cap may be revised or repealed if Alberta demonstrates credible progress on carbon reduction, particularly through the Pathways Alliance CCUS initiative.

Two Big Levers: Carbon Cuts and Indigenous Consent

Time is of the essence to achieve the Building Canada Act's goals. Whether Alberta will be successful in obtaining the green light to build an oil pipeline is likely dependent upon two key drivers:

1. How imperative it is for carbon reduction measures such as the proposed Pathways Alliance Carbon Capture Utilization and Storage (CCUS) project to be built (by the same oil producers); and
2. Is there a partnership opportunity where First Nations currently opposing the oil pipeline would obtain sufficient value and long term benefits that persuade them to support the export of bitumen from the BC coast.

Both of these key drivers need to be addressed quickly, and the Federal government is in the best position to facilitate them. If carbon reduction remains a high priority whilst achieving the nation's ambitions on getting projects built, trade diversification and getting resources to market, then a re-alignment of policies that currently stand in the way of producers being able to gain market access will pave the way for the same producers to proceed with such carbon reduction measures. But if the re-alignment of those same policies slows down or even stops a bitumen pipeline from being built because First Nations do not support it, trade diversification will not be achieved, and resources will remain trapped in Canada. Both the economic and carbon reduction objectives that should benefit all Canadians will be lost.

If Approved, Industry to Build and Operate the Pipeline

If the Major Projects Office approves the Alberta Pipeline Proposal, the Government of Alberta has stated that the further development, construction and operation of the pipeline will not be paid for by taxpayers, but rather private industry will take over the project. This approach provides private industry participants, including pipeline operators, oil producers and the investors necessary to fund such large projects, the security that has been lacking in previous major energy infrastructure projects. It would also signal to all Canadians that our national resources can be exported to international markets, providing them much needed energy security and shoring up Canada's place as an 'Energy Superpower'.

Strategic Context: Public Sentiment and Political Timelines

While the Alberta announcement marks a significant shift in how large energy infrastructure projects are usually developed, it is still early days. Recent polling suggests a majority of Canadians support the idea of a pipeline to the northwest coast, though many also support maintaining provincial veto rights and the tanker ban. Premier Smith has expressed hope that the pipeline will be included in the federal list of nation-building projects by the Grey Cup in November. This timeline adds urgency to federal decision-making and stakeholder engagement. Indications by the federal government on the application of existing laws and regulatory frameworks, thoughtful and meaningful engagement with Indigenous groups opposing the export of oil on the BC coast and maximum equity Indigenous participation will be important developments to watch as the project planning progresses.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

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