Trust. Broken.
Carney seals the pipeline deal, and his energy minister touts a $43-billion taxpayer bailout as a good investment. Would you buy a used “energy superpower” strategy from these guys?
“Trust is probably the most sought-after commodity now.”
— Finance Minister François-Philippe Champagne, addressing a media scrum at the IEA’s 11th Annual Global Conference on Energy Efficiency, June 29, 2026, Montreal
“The most important thing Canada has today, which makes Canada a very important partner for many countries, is trust and predictability.”
— International Energy Agency Executive Director Fatih Birol, in the same media scrum
“Completing a pipeline will also require…a private sector proponent.”
— Prime Minister Mark Carney, November 27, 2025
With his gas terminal and pipeline deals in British Columbia and Alberta this week, Prime Minister Mark Carney did more (even more) than just bow to Alberta Premier Danielle Smith’s demands and abandon everything he must surely know about the depth of the climate emergency, and how quickly the rest of the world is embracing clean energy as an alternative to fossil fuels.
He gave up the one thing that has been so central to his own political brand—the essential, intangible cornerstone that no central banker, past or present, should ever want to trade away:
Trust.
It isn’t just that Carney and his team have arrived at a pipeline pact and found B.C.’s price for not opposing it in court. Donald Trump, his continuing annexation threats, and his traitorous, fifth-column supporters in the Alberta separatist movement ensured that some sort of deal would need to be done.
But even after Carney and Smith signed their controversial, give-it-all-away memorandum of understanding (MOU) on pipeline development in November, even after they finalized an implementation plan in May, there were still enough guardrails to impose some discipline on Smith’s and the fossil industry’s wildest development fantasies.
• As Carney declared Nov. 27, the day the MOU was signed, and has maintained since, the pipeline was only supposed to happen if a private sector proponent stepped up to pay for it.
• The pipeline and the fossil industry’s equally questionable Pathways carbon capture and storage hub were supposed to be “mutually dependent”—or, as Energy and Natural Resources Minister Tim Hodgson memorably said during an IEA media conference last week, “co-dependent”. Setting aside the deeper psychological truth that Hodgson accidentally revealed, the more practical intent was that neither project was supposed to proceed unless the other one did, too.
All in a Day’s Work
Carney blew all of that up in a single day, with a pipeline deal that saddles federal and provincial agencies with about 90% of the financing. That means taxpayers, not private investors, will pick up the tab for a project estimated at $35.2 to $43.7 billion—before the foreseeable and inevitable cost overruns (584%, the last time the federal government bought us all a pipeline) start to pile up.
Related story: ‘90% Public Ownership’ as Carney, Smith Announce New Pipeline into Declining Global Oil Market
But wait! there’s more.
• As our sharp-eyed investigative ace in Calgary, Jody MacPherson, pointed out this week, there was a subtle and previously unreported shift in language between the original MOU and the implementation agreement. The MOU called for “construction of one or more private sector constructed and financed pipelines” (emphasis added). The implementation plan refers more generally to “construction of the oil pipeline project as set out in the MOU,” with no explicit mention of a private sector proponent. Nuances matter, and the importance of this particular rewrite is reflected in the final result.
• As The Energy Mix reported last week, the pipeline deal calls for only a scaled-back version of the deeply flawed carbon capture scheme the oil sands industry has been touting for years—always demanding more lavish taxpayer subsidies for the project, never committing any share of their own record profits to get the job done. And even then, nothing in Thursday night’s deal “actually compels the companies to move forward with this project,” Pembina Institute Executive Director Chris Severson-Baker pointed out. That’s how a “mutually dependent” (or “co-dependent”) component of a grand bargain becomes a nice-to-have. Or a giveaway.
• And what about the supposed private sector “proponent”, Pembina Pipeline? (As we’ve been noting all week, Pembina Pipeline and the Pembina Institute are unrelated organizations.) If this is the best, most ringing private sector endorsement the two governments could find, I’d love to see the rejection letters they received from everyone else!
Here’s some of the fine print from the Pembina Pipeline media release for what it emphasizes is a “non-binding Heads of Agreement”. (Investopedia helpfully explains that a Heads of Agreement is just “the first step toward creating a formal deal, and due to its tentative nature can often be renegotiated or reneged.”)
Pembina, through the HOA, is in early stages of reviewing the development plans and initial capital cost estimates for the Project; this due diligence work stream will continue until signing of definitive agreements, which is targeted for September 2026…
Pembina will evaluate participation in the Project through a disciplined and rigorous investment framework. The proposed multi-stakeholder structure is intended to appropriately align risk and responsibility among participants and includes protection for Pembina related to matters such as cost overruns and returns. Pembina has full discretion over any final investment decision (”FID”) for its interest and shall have no at-risk development capital prior to FID. Pembina will assess the opportunity against defined Project milestones throughout the development period and will evaluate its participation in the context of its longstanding prudent capital allocation guardrails and its broader development portfolio.
Or in plainer language…we’re all-in, kind of, sort of, as long as taxpayers take all the risks, we don’t have to cover the cost overruns, our profits are guaranteed, and Jupiter aligns with Mars. Compare that to the more straightforward, apparently iron-clad assurances in the MOU, and once again, it all comes back to trust.
This Shakedown Spans Generations
As Carney surely understands, it’s a shakedown that our grandchildren and theirs will pay for—in the cost and inevitable cost overruns to get the project built, and in all the additional climate chaos that four liquefied natural gas (LNG) terminals and a million-barrel-per-day oil pipeline can unleash. He knows full well that they’ll be confronting so much more than what he called “biblical weather” when he apologized, without a hint of irony, that record storms and flooding in Ottawa had grounded his plane before he could depart for Canada Day celebrations in Edmonton.
Meanwhile, Smith is already plotting her next set of over-the-top demands, apparently claiming federal regulations on plastics pollution are hobbling an agriculture sector that is already being slammed by the climate impacts she’s striving so hard to push to the max.
It was never about “making Canada work”, as she likes to claim. The thuggery and bullying are the point, and in end, this wasn’t a negotiation. It was a capitulation, not even to benefit Albertans as a whole, but brought to you by a provincial premier who made her living as a fossil fuel lobbyist before her bosses lifted her into elected office.
Trust: The ‘Most Sought-After Commodity’
At some point last week, the echo in the room became deafening. (And I’m already deaf. So it must have been pretty obvious if I noticed.) Just days before the Carney-Smith deal shattered Canadians’ trust, Finance Minister Champagne was at the IEA energy efficiency conference in Montreal, enthusing about trust as the “most sought-after commodity”.
The split-screen sensation at the conference was as unmistakable as the mixed message in Carney’s Canada Day message, the latest in his Forward Guidance video series. On one hand, he acknowledged the climate crisis and devoted considerable air time to a national electricity strategy that will be at the centre of any effort to decarbonize. In the same breath, he dismissed the country’s climate targets in favour of short-term support for oil and gas.
At the IEA conference, the sessions and hallway discussions focused on the massive opportunity and urgent need to tap into the full potential of energy efficiency. We heard repeatedly that efficiency never gets as much attention or support as a solar or wind farm, but that it’s still the “first fuel”—both Champagne and Environment Minister Julie Dabrusin repeated the long-understood truth that the cheapest unit of energy is the one you never have to produce.
One senior executive told The Energy Mix that Europe has already reduced its energy consumption by 30%, and has the ability to eliminate another 70% of its remaining demand by 2050.
Extend that potential to the countries in Asia and Africa that are hurting the most in light of the American/Israeli war on Iran and the resulting disruptions on the Strait of Hormuz, and you have to wonder who will be left to buy the oil and gas that Canada is so hell-bent on exporting.
Yet the IEA’s top-line political message was all about energy security. That was understandable in response to the last four months of price shocks. It was far less understandable that IEA Executive Director Fatih Birol’s consistently framed energy security as access to fossil fuels.
Here’s Birol at last Monday’s media scrum:
The most important thing Canada has today, which makes Canada a very important partner for many countries, is trust and predictability …
The world will need oil and gas [for] years to come, even in a world where we see the climate change…and that oil, I prefer to come from countries like Canada rather than somewhere which is volatile.
Birol left the media scrum and Champagne left the building before The Mix could ask them the ultimate question about trust in a moment of accelerating energy transition:
Can we trust in turn that our trading partners’ short-term need for oil and gas won’t leave us with a massive, new collection of stranded assets—a risk that Carney himself warned about—in the next decade or two?
Such a Good Investment
But that worry doesn’t seem to be keeping one of Champagne’s key Cabinet colleagues up at night.
With pointed questions beginning to fly about a “private sector constructed and financed” pipeline with 90% taxpayer support, Energy Minister Hodgson doubled down. “I am quite comfortable that this is a good investment for Canadian taxpayers,” he told CBC Power & Politics. “This project is the most significant economic opportunity in the country today.”
Hodgson seems to have missed the memo from the #ElbowsUp for Climate campaign, with its five massive “nation-building, not nation-burning” projects that will actually build Canada stronger, rather than tearing us apart.
For all that he quoted Carney’s mantra that “we actively take on the world as it is, not wait for a world we wish to be”, both Hodgson and his boss seem to be selectively, willfully wishing away a key aspect of where the world is going. This particular moment of hope and strategy comes to you from Morgan Solar Executive Chair Mike Andrade, writing on LinkedIn:
I continue to say that the strategy with the oil and gas industry is to “hoist them with their own petard”. Keep saying yes and addressing their “alleged” issues, and then eventually make them acknowledge that they will not make the investment. Because there is no business case now, much less in three years…
The Asian demand for oil, and thus the market clearing price, will torpedo any economics of this. The oil and gas companies will not pony up the additional capacity that is required to fill this pipeline… I do believe that there are going to be potentially billions of dollars spent and wasted here, but I doubt very much that we’re going to get the full pipeline.
Meanwhile, the collateral damage from the Carney government’s strategy are coming into focus. Last week, The Mix reported on the 1,100 jobs at risk in Alberta’s clean economy, thanks to a carbon pricing deal between Carney and Smith that throttled the economics of Varme Energy’s “shovel-ready” waste-to-energy project in Edmonton. There’s also a bigger, fascinating question taking shape: whether Carney’s and Hodgson’s hyper-focus on a fossil fuel deal, and their willingness to mostly obliterate Canada’s climate regulations to support it, will undercut other exporting industries—think steel, aluminum, cement, and more—that are looking for customers in countries that do take emissions seriously.
Yet again, the underlying question comes back to trust: Why should a start-up like Varme Energy and its parent company in Oslo spend years putting a project together when an unforeseen, capricious change in policy can drive a spike through their business plan?
Especially in service to a largely U.S.-owned fossil industry that Andrade describes as “shameless grifters” who will “continue to leverage every political angle they can to extract as many concessions and dollars as possible”?
The Damage Is Done
We know this moment of madness will pass, possibly as soon as midterm elections in the United States. Our ever-trusty countdown app puts that possibly momentous event just 120 days away, so much better than the 730 we started with. Which means the dates to mark on your calendar are the Alberta referendum October 19, and the moment on the evening of November 3 when we have to hope Trump will lose his hammerlock control over the U.S. government.
But this week’s sense of serial betrayal will take longer to heal. Trust doesn’t recover easily once it’s been shattered, and Carney is about to find out how badly this deal has damaged his own public persona.
Even more than his reputation for being the smartest kid in the room (and maybe, sometimes, being a bit too aware of it), Carney’s signature brand until now has been steadiness and trust. He’s long since lost that with many climate hawks. But now, as Canadians outside the climate and energy “bubble” get a better sense of the pipeline deal—once they realize they’re on the hook for $40 billion in the midst of an affordability crisis—he’ll have to scramble to regain trust and credibility with a wider swath of the public.
That includes anyone who has until now given him the benefit of the doubt that his compromises were motivated by Trump’s 51st state threats. And the large majority of Canadians, including 61% of Albertans, who took him at his word when he swore repeatedly that there would be no pipeline without a private sector proponent.
The last word here goes to veteran climate campaigner Tzeporah Berman, chair and founder of the Fossil Fuel Non-Proliferation Treaty initiative:
Building a new oil sands pipeline is not simply building infrastructure. It is locking in decades of future emissions at a moment when science tells us we need to rapidly reduce them. It is planning for a hotter, more dangerous future.
More deadly heat. More fires. More floods. More displacement. More food and water insecurity.
Already today, one person dies from extreme heat every minute. Millions die each year from air pollution linked to fossil fuels.
The challenge with this decision is not only the climate impact. It is the opportunity cost.
This pipeline could cost taxpayers $40 billion.
Forty billion dollars could build hospitals, schools, public transit, renewable energy projects, climate resilience infrastructure, clean manufacturing facilities, or retrofit more than a million buildings to lower energy costs and create jobs.
I keep asking myself: where are those comparisons? What would $40 billion invested in food production, housing, clean technology, or climate adaptation deliver for Canadians?
Mitchell Beer traces his background in renewable energy and energy efficiency back to 1977, in climate change to 1997. Now he and the rest of the Energy Mix team scan 1,200 news headlines a week to pull together The Energy Mix and The Energy Mix Weekender.
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Senators pen trio of letters to minister over ‘significant concerns’ in feds’ climate policy (The Hill Times)
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Three Wildland Firefighters Killed in Colorado Blaze (Inside Climate News)
TotalÉnergies to account for role in greenhouse gas emissions, court rules (Financial Times)
European Nations Now Believe Some Hormuz Fees Are Inevitable (Bloomberg)
Mines will hold back Strait of Hormuz shipping for months, CEO warns (Financial Times)
Oil Markets Oversupplied (Semafor)
UK Apartment Owners Are Getting Locked Out of Money-Saving Green Tech (Bloomberg)
Delhi to ban petrol rickshaws and scooters in net-zero drive (The Telegraph)
Airlines brace for up to $127B in extra costs from carbon credit shortage (Financial Times)
FERC Was Already Losing Its Independence. Now It’s Gone. (Heatmap)
Michael thanks for the extensive coverage of the game Carney plays . A very sad and discomforting occasion for Liberals to experience . This double speak as Orwell called it will be soon apparent .
NO. I would not buy this energy superpower strategy from ‘these guys’, or anyone else. I think they’re the ones that have been ‘sold’, or perhaps they have just ‘SOLD 🇨🇦OUT’.