Prime Minister Mark Carney met virtually with Canada’s premiers Thursday as his government navigates a complex mix of energy policy disputes, U.S. trade pressure and growing regional tensions. The meeting also marked the first formal discussions with Canada’s provincial leaders since Ottawa signed a controversial memorandum of understanding (MOU) with Alberta. Ottawa and Alberta signed the MOU in late November, outlining conditions for the potential construction of a new oil pipeline to Canada’s west coast while committing Alberta to a series of environmental measures. The federal government promoted the agreement as a compromise that could unlock new market access for Canadian energy while maintaining climate safeguards, including a strengthened industrial carbon price in Alberta. But British Columbia Premier David Eby has sharply criticized the deal, saying his province was excluded from negotiations despite being directly affected by any pipeline to the west coast. Eby has said the agreement is unacceptable and has raised concerns about its implications for methane regulations, environmental protection and provincial jurisdiction. He has indicated he wants to meet with Ottawa and Alberta early in the new year to discuss the agreement and “find some common ground.” Alberta Premier Danielle Smith, meanwhile, has hailed the deal as a major win, saying it signals Ottawa’s renewed willingness to support energy development and export infrastructure. Political risks and regional fault lines Keith Brownsey, a retired political science professor with Mount Royal University, said the Alberta agreement with Ottawa highlights long-standing tensions in Canada’s system of co-operative federalism and questioned the practicality of the pipeline concept itself. “The idea that you’re going to put in a pipeline to the northwest coast, to British Columbia, is fantastical,” he said, citing high costs, environmental opposition, Indigenous concerns and navigational risks in northern waters. “Eby was also stiffed. He didn’t know about it.” Brownsey also questioned the political calculus behind the deal, noting the Liberals hold far more seats in B.C. than in Alberta. “I don’t know what the Prime Minister’s Office and the prime minister were thinking,” he said, adding the agreement has exposed internal divisions within the Liberal Party. Those divisions became more visible when Steven Guilbeault, a longtime environmental advocate, resigned from cabinet following the Alberta agreement, though he remains a Liberal MP. Lori Williams, an associate professor of policy studies at Mount Royal University, also said all parties involved will aim to find a strong balance. “Danielle Smith has talked about both Trans Mountain and then the possibility of something going through the United States, and David Eby has also talked about Trans Mountain, so it’s going to be interesting to see where this goes from here,” she said. “I think what’s going to happen is all parties involved—the business folks, the industry folks, the political folks, federally and provincially—are all going to be looking for something that generates political and economic gains for them as quickly as possible.” Brownsey said while Thursday’s meeting is unlikely to produce immediate breakthroughs over political disputes, it could set the tone for a politically sensitive year ahead. He noted that in 2026, formal Canada-U.S.-Mexico Agreement (CUSMA) talks are expected, along with continued debate over energy infrastructure and growing pressure to protect Canada’s economy from U.S. volatility. “I think it’s simply a reflection of the chaos that Donald Trump brings to the world,” he said. Trade and tariffs loom large Beyond energy, international trade—particularly Canada’s relationship with the U.S.—was expected to be a major focus of Thursday’s meeting. Carney has said U.S. President Donald Trump has not indicated he is willing to walk away from CUSMA, which is up for review in 2026. The prime minister met privately with Trump and Mexican President Claudia Sheinbaum earlier this month during the FIFA World Cup draw in Washington, a meeting Carney said helped establish the broad framework for upcoming talks. “We’ve been clear about our approach to supply management,” Carney said. “We continue to protect supply management. And we continue to see tremendous benefits … of pooling resources where possible, in the auto sector, in the steel sector and the aluminum sector.” Carney said Canada is ready to move quickly if Washington is willing. “If the U.S. wanted to sit down this weekend, we could sit down this weekend and hammer out a sectoral deal,” he said. “I’m confident of that from our side.” Despite CUSMA, the U.S. continues to impose steep tariffs on Canadian exports, including 50 per cent tariffs on steel and aluminum, 10 per cent on lumber and 25 per cent on some automotive and manufactured goods. Alberta businesses feel tariff impact For Alberta manufacturers, the trade dispute has already translated into lost work and cut hours. Chad Spicer, president and owner of All-Metal Manufacturing, said tariffs have driven away many of his company’s U.S. customers. “We’ve lost 60 to 70 per cent of our sales because of the tariffs,” he said. He said uncertainty around the upcoming CUSMA review is adding to the strain. “I hope they come up with a good plan that they can take to our U.S. counterparts,” Spicer said. “But you’re relying on the U.S. to agree to everything we’re asking for, which is not always so easy.” Spicer said his company is shifting toward Canadian suppliers and customers. “We’re definitely focusing on buying more Canadian steel,” he said. “Just trying to keep work local, keep our money in Canada.” Ontario deal highlights different approach Thursday also saw Carney and Ontario Premier Doug Ford announce a new agreement aimed at eliminating duplication in environmental assessments for major projects. Under the deal, projects previously requiring both federal and provincial reviews will now undergo a single assessment, depending on jurisdiction. The agreement includes a commitment from Ottawa to complete its review of proposed roads to Ontario’s Ring of Fire mining region by June. Ford said the agreement would help unlock development in northern Ontario and speed up infrastructure projects. The deal advances one of Carney’s election promises of “one project, one review” and aligns with the creation of a new federal Major Projects Office designed to fast-track selected developments. B.C. and New Brunswick have already signed similar agreements, with other provinces expected to follow. Ford’s tariff ad still reverberates Despite co-operation on infrastructure, Carney and Ford have taken sharply different approaches to dealing with the U.S. Earlier this year, Ontario spent $75 million on a U.S.-focused advertising campaign featuring former president Ronald Reagan criticizing tariffs—a move that reportedly angered Trump and coincided with the collapse of trade talks. Ford is defending the ad again, saying it succeeded in drawing attention. “Our intention was to bring it to the attention of the American people,” Ford said. Carney acknowledged the ad damaged negotiations but says Ottawa remains ready to re-engage. “It was the case that we were close to an agreement,” Carney said. “If the United States wants to come back on that, we are ready.” Ford said he understands why Carney has taken a more measured approach. “I’m in a very different position than the prime minister,” he said. “It’s a lot more difficult when you’re the frontline guy that’s negotiating with him.”
