The Carney-Smith deal is a grand concession, not a grand bargain

Guest post by Amy Janzwood, assistant professor of political science at McGill University and the author of "Mega Pipelines, Mega Resistance."

In response to the stunning Carney-Smith Memorandum of Understanding, some have suggested there is a “method to Carney’s madness,” while others have called it a grand betrayal. In understanding this deal, we should recall the last time the federal government struck a so-called grand bargain with Alberta.

In 2018, in exchange for Alberta’s support of the federal climate plan, the federal government agreed to buy the existing Trans Mountain pipeline and plans for the expansion from Kinder Morgan for $4.5 billion. Canadians are now on the hook for a pipeline with loans of $36 billion, and the former federal finance minister Bill Morneau recently admitted that the government was “gamed” by Kinder Morgan.

Just seven years after getting fleeced at the negotiating table, Carney is effectively giving back the policy gains and more from the last bargain in hopes of appeasing Smith, and the separatist base she is “playing footsies” with. Despite the federal government’s disastrous experience with the last pipeline deal, the Prime Minister is now sweetening this bargain with a fresh mega pipeline promise. While it’s unlikely that the federal government would buy another pipeline outright, its willingness to pave the way for Alberta to do so shows just how quickly costly lessons fade in Ottawa.

The market won’t build another oil pipeline to the northwest coast. The economic case for a new oil pipeline is nonexistent and would very likely worsen conditions for the sector. There remains staunch opposition from many First Nations, who successfully fought and won against Enbridge’s original Northern Gateway. Premier Eby has a strong political incentive to fight this project to a bitter end. The only way forward is one of massive subsidization and bulldozing Indigenous rights.

The attempted resurrection of a long-dead pipeline is a dangerous distraction, and it will not bring economic security to Trump-proof the Canadian economy. The deal does nothing to address the structural problems facing the province’s oil sector, including job loss, slower growth, a looming global oil supply glut, and ballooning costs of orphan oil and gas wells. This is a sweetheart deal for Danielle Smith, though it was booed at the recent United Conservative Party (UCP) convention, showing just how difficult (impossible) it is for Smith to placate her base.

The real tragedy is that the Memorandum of Understanding is a death knell for Canada’s climate policy, on which four consecutive federal governments were elected to deliver. Nearly every part of the Trudeau government’s climate plan has been abandoned or undermined, with a ‘Trust Me’ approach instead. But Carney’s finance bros didn’t do their math. This deal creates more emissions and risk at taxpayers’ expense, including loosening restrictions on subsidies for a dubious carbon capture and storage project that would be used to squeeze more oil from depleted wells.

This is not a grand bargain. It is a massive capitulation to the UCP with a standing ovation. These concessions, if implemented, not only undermine Canada’s climate goals but also the federal government’s own recently announced Climate Competitiveness Strategy.

Canada has already lost credibility and a cabinet minister. Carney’s deal is a grand concession for which Canadians will have to pay.