Canada is looking to scrap some climate rules to ease regulatory challenges for the West Coast Pipeline— a major crude oil pipeline project expected to transport crude from Edmonton, Alberta, to British Columbia’s coast for export. 

Prime Minister Carney and Alberta Premier Danielle Smith signed an agreement last week that rolls back key federal climate policies to spur energy sector investment and clear a path for a new oil pipeline to Canada’s west coast. 

The deal signals a significant policy pivot by the federal government in favour of increased fossil fuel development.

Under the agreement, Ottawa will scrap a planned emissions cap on the oil and gas sector and drop clean electricity regulations. In exchange, Alberta committed to strengthening industrial carbon pricing within the province and supporting a key carbon capture-and-storage project.

Carney defended the move by arguing that trade uncertainty, including tariffs imposed by the Trump administration, is projected to cost the Canadian economy $50 billion. 

He stated that building key energy projects is "vital" to spark economic growth and reduce the country's reliance on the United States.

The shift immediately sparked a cabinet crisis, with Steven Guilbeault, who served as environment minister under former Prime Minister Trudeau, resigning from the cabinet, voicing concern that Canada's climate plan was being dismantled.

While the project appears to have immense economic value, the pipeline proposal faces significant opposition, with private-sector support still largely absent. British Columbia Premier Eby continues to oppose the project and calls for the federal Oil Tanker Moratorium Act to remain in place. 

A group of indigenous organisations in British Columbia also vowed to block the project, stating they would not allow oil tankers on the northwest coast and the pipeline "will never happen."

In early October, Alberta Premier Danielle Smith said that Alberta would contribute $14 million to the pipeline project that would help diversify the country’s economy amid tariff fears from U.S. President Trump. 

Market analysts at CIBC expressed scepticism, noting they do not expect the private sector to fund a new West Coast pipeline as long as the B.C. provincial government and First Nations groups remain opposed. 

The federally-owned Trans Mountain Corp. pipeline, which already runs from Alberta to B.C., has been operating near its total capacity of 890,000 barrels per day in recent weeks.