Carney, Smith moving closer to a deal that could include B.C. oil pipeline: source

Prime Minister Mark Carney and Alberta Premier Danielle Smith are moving closer to reaching a deal on the future of Alberta's energy sector, according to a senior government official, and it's likely to include some language about a path forward for the northwest B.C. oil pipeline that Smith has long demanded.

While the last Liberal government essentially slammed the door shut on an oil pipeline to the region, Carney is open to considering such a project if Alberta, as the proponent, conducts the necessary Indigenous consultation and negotiates with the B.C. government, among other conditions, the official said.

B.C. Premier David Eby has strenuously opposed such a pipeline. Another potential roadblock is the Trudeau-era B.C. tanker ban bill, which prohibits ships laden with oil from docking at ports along the province's northern coast.

The federal government is considering granting limited exemptions, and there's a possibility it could use its power under C-5, the One Canadian Economy Act, to allow tankers associated with this proposed pipeline to bypass that moratorium.

The government isn't open to doing away with the tanker ban entirely, said the official, who spoke to CBC News on the condition they not be named due to the sensitive nature of the ongoing bilateral discussions. The Globe and Mail first reported on the progress around a possible new B.C. pipeline and potential exemptions to the tanker ban.

Whatever Ottawa's decision on the pipeline, a construction start date is not imminent.

Alberta will have to do the regulatory and constitutional work required and only then would Ottawa consider referring the project to the Major Projects Office to get it on the road to potential completion, the source said.

Pipeline construction has been notoriously slow in recent years. The federal government purchased the languishing Trans Mountain expansion project in 2018 and it didn't open to shippers until 2024.

That project, which was built at huge expense using taxpayer dollars, is profitable. According to company's filings, in the first three months of 2025 alone, Trans Mountain generated some $568 million in earnings.

The pipeline has opened up new markets for Canadian oil in Asia and the U.S. West Coast, helping to close the longstanding differential with global oil prices while also delivering more tax and royalty revenue for the provincial and federal governments.

Smith hopes another pipeline, this time to the northwest, will deliver more of the same.

Part of this proposed grand bargain between Ottawa and Alberta is a commitment to reduce the oil sector's emissions.

Carney is intent on getting the Pathways Plus project built, and has already tasked the Major Projects Office with seeing it through. It's an Alberta-based carbon capture, utilization and storage project, which could reduce the emissions intensity of exports from the province's oilsands.

Carney is also committed to the industrial carbon tax, which, after the consumer levy was scrapped, has emerged as the centrepiece of the Liberal government's climate action plan. The most recent federal budget calls for that tax to be "strengthened."