Why the Alberta-Ottawa energy MOU is far from dead, despite missed targets

The April 1 deadline tied to the Alberta–Ottawa energy memorandum of understanding (MOU) was supposed to be the first big test of whether this grand bargain between the federal government and Alberta was real. In a narrow sense, the deal is already stumbling. But despite what some are calling an “early snag,” or even a deal “gone off the tracks,” there’s plenty to suggest the broader effort is still very much alive. Of the four early agreements both sides had hoped to finalize by next week, only two appear to be on time. Striking a deal to harmonize the impact assessment process and methane regulations is nothing to sneeze at, to be sure. But the more difficult pieces around industrial carbon pricing and the Pathways carbon capture megaproject proved too messy for a tidy political timeline. In truth, those were always the parts where the real negotiations would begin. “Industry, from what I understand, feels pulled in a couple of different directions,” said Keith McLaughlin, a political strategist with New West Public Affairs based in Calgary. “Premier Smith, on one hand, wants to double production, which is going to cost money…to expand the oilsands. And at the same time, the federal government is insisting on a massive carbon capture and storage project,” he said. “And so industry is kind of saying, ‘Okay, we don’t have this amount of money to do both.’” But focusing too much on those details now risks missing the bigger picture. Tonal shift is real It’s true that billions of dollars in potential investment are at stake, with executives from companies like CNRL and TC Energy warning that without cost certainty and a clear carbon pricing framework, capital will continue flowing to the United States instead. This, however, does not render the larger MOU dead. As the saying goes, a glass half empty is also a glass half full. “It’s only been in the recent past that people would look at this saying, ‘Well, you got 50 percent of what you wanted done with the federal government,’ as not enough,” said Andrew Lamb, head of oil and gas with Gowling WLG’s Calgary office, in a conversation with The Hub. “I think there’s definitely momentum, and I think everybody wants to end up in the same place, which is different than it used to be,” he added. For years, the conversation between Ottawa, Alberta, and the energy industry often felt like a dialogue between two mutually unintelligible languages. The feds talked about climate targets, while the province and industry talked about competitiveness and self-determination. Pipelines became political symbols rather than commercial, nation-building projects. That tone has shifted dramatically. And that bullish outlook seems to cut across political lines. “This is just a small hurdle. This is a process milestone,” said Amber Ruddy, a conservative strategist and vice-president with Counsel Public Affairs. “It will be a breakthrough once all four elements are signed.” Ruddy noted that Alberta has already moved to speed up approvals for major projects, recently announcing a proposed 120-day cap on approval timelines—a significant change in a system where major projects have historically faced years of regulatory delays. But she also cautioned that governments will eventually have to show results, not just good vibes and agreements on paper. Major investment decisions, she said, will depend on whether companies see projects actually moving through the system. “If there’s going to be big investment decisions, other companies will want to see how the process is going, whether or not it’s flowing before they start making major investment decisions,” Ruddy said. Industry piping up The fact that companies from Enbridge to Cenovus are lining up to speak publicly—early and often—is itself an optimistic sign. These business leaders are speaking less about ESG targets or climate branding and more about capital allocation, regulatory timelines, and market access. The shift away from public relations suggests industry believes it is being heard—and more importantly, that this negotiation is real. What’s more is that the predictable backlash has hardly made a dent in the broader public conversation. If anything, the politics around the MOU suggest both the federal Liberals and the provincial United Conservatives are seeing considerable political benefit. Prime Minister Mark Carney speaks with Calgary Chamber of Commerce president Deborah Yedlin in Calgary, Alta., Thursday, Nov. 27, 2025. Jeff McIntosh/The Canadian Press. “When the MOU was first announced in November, how many talking heads did you see being like, ‘Oh, Carney’s sacrificing B.C. for Alberta,” said McLaughlin, who once worked as a political staffer in Rachel Notley’s NDP government. “[Carney] has not suffered any consequences from this MOU because British Columbians do want to see more economic development in their province,” he said. None of this means the challenges facing the MOU are insignificant. A pipeline proposal is still forthcoming, and it increasingly appears it will proceed on a separate but related track, potentially with financial backing from Middle Eastern and Asian investors. This second act will come with its own complications. Taken together, all signs suggest both levels of government have every incentive to keep truckin’ along. “It’s not surprising that the four agreements they were trying to get to—the two they’ve accomplished were definitely the low-hanging fruit,” said Lamb. “There’s going to have to be some significant compromise on everybody’s part to move this forward.” That is a very different problem from the one that has defined the past decade. Despite missing some initial targets, the Alberta–Ottawa energy memorandum of understanding (MOU) remains largely intact and active. While only two of the four early agreements appear on track for the April 1 deadline, the more complex issues of industrial carbon pricing and the Pathways carbon capture megaproject remain under negotiation. Experts say the shift in tone between Ottawa, Alberta, and the energy industry is significant — moving from conflicting priorities to a shared desire for progress. Industry leaders are increasingly focused on practical matters such as capital allocation and regulatory timelines, indicating they believe their concerns are being heard. The MOU continues to offer political benefits for both the federal Liberals and Alberta’s United Conservatives, suggesting both sides remain committed. Why is the Alberta-Ottawa energy MOU considered 'alive' despite missing initial targets? How could the MOU's success impact energy investment in Alberta, according to the article? What political benefits might the Liberals and United Conservatives gain from the energy MOU? Comments (1) “It’s not surprising that the four agreements they were trying to get to—the two they’ve accomplished were definitely the low-hanging fruit,” said Lamb. “There’s going to have to be some significant compromise on everybody’s part to move this forward.” Err what? Alberta’s position is pro-development, the federal position is anti-development. If Alberta compromises nothing will move forward. The economics won’t be there for private investors to get involved and no one will be in a rush to put public money behind another Liberal guided white elephant. Stasis will be the outcome. The only way forward for a “made in Canada” solution will be for the Liberals to capitulate on the carbon tax and on Pathways. The former is too punitive and the latter relies on the former. So long as the Liberals hold to these specific outcomes, the MOU, such as the point of it was to build a pipeline within Canada will be dead. (There are some other benefits of it mostly involving cutting to the chase on some supreme court rulings.) If there is an actual out, it may be that the war in Iran might drive in sufficient foreign capital, motivated more by energy security rather than by returns, to push the project over the hump. In that case it wouldn’t be a victory for the MOU, so much as the natural pressure of keeping the world’s 3rd largest proven reserves isolated from the market while other resources face intense bottlenecks. The MOU won’t be a bridge in that case, it’ll be a dam that breaks.