A major Canadian oil and gas company reported dozens of incidents at its pipelines after the provincial regulator exempted thousands of its pipelines from normal clean-up timelines. 

According to provincial data reviewed by the Investigative Journalism Foundation and The Narwhal, Canadian Natural Resources Ltd., or CNRL, reported 45 incidents since 2020, many of them spills of unspecified amounts of natural gas and other toxic cargo caused by metal corrosion at aging pipelines. 

Those spills came after a 2020 decision from the BC Energy Regulator to exempt roughly 4,300 of the company’s pipelines from the usual requirement that inactive pipelines be fully decommissioned within 18 months. Decommissioning, or deactivating, a pipeline includes removing any fluid and disconnecting it from the system. The sealed-off pipeline will remain in the ground in perpetuity. 

A CNRL spokesperson did not directly respond to a question about whether the spills occurred at pipelines associated with the exemption. Neither did the BC Energy Regulator.

Most of the pipelines operated by CNRL are short, transporting fracked natural gas and other fuels from wells scattered across northeastern B.C. to larger pipelines which carry the products to consumers or exporters. But even after those wells have run dry, the pipelines associated with them can still leak leftover contaminants into the local environment.  

“If it’s not properly [decommissioned] after its end of life, you have a substantial risk of groundwater contamination,” Philip Gass, a director of the energy program at the Ottawa-based International Institute for Sustainable Development, said in an interview. 

Gass said such spills might go unnoticed.

“If it’s been sitting there for a long time, you have to be really careful about the monitoring because this isn’t an active pipeline where you would notice a spill right away,” Gass said.The BC Energy Regulator reports for the CNRL incidents include leaks of natural gas, liquid hydrocarbons and produced water — a byproduct of oil and gas extraction that often contains heavy metals and hydrocarbons. Of the 45 reported instances, 23 were due to metal loss, often internal corrosion that allowed toxic fluids to escape.The regulator said incidents don’t automatically mean spills, since they can also include “incidents with the potential to affect pipeline integrity.” But many of the CNRL incident reports explicitly indicate that they resulted in spills or pipeline failure.

The regulator did not say how much of each fluid leaked into the surrounding environment or if there was any ecological damage associated with those spills.

Critics argue the spills are further evidence the regulator erred in giving CNRL such a broad exemption, which they called a sign of the undue influence the oil and gas industry has on provincial regulators. 

“It doesn’t give us a lot of faith that the regulatory system is operating as it should,” BC Green Party MLA Jeremy Valeriote said. 

‘No impact to the environment’: CNRL

For comparison, in the six years prior to 2020, CNRL reported 25 incidents at its pipelines, 17 of which were due to metal loss. 

A CNRL spokesperson said the company operates 14,896 kilometres of pipelines in B.C. and that spills are dealt with properly and promptly. 

“Clean-up and remediation activities were completed, resulting in no impact to the environment,” the spokesperson said of the 45 incidents since 2020. “When events occur, such as equipment malfunction that results in an incident, we have safety and environmental management systems in place to quickly manage these events. To mitigate any impacts, incidents are quickly and effectively managed in accordance with our structured emergency management and spill preparedness programs.”

Daryl Foley, president of Group 10 Engineering, said producers like CNRL work hard to minimize incidents.

“Their intention is to do the right thing and to prevent spills because it costs them an enormous amount of money when they have a substantial spill,” he said in an interview. Foley’s Calgary-based company works with companies and producers on pipeline integrity issues and advises the Alberta and B.C. regulators on best practices. “I’m not claiming that everybody’s perfect — if perhaps they’re ignoring it and there is a residual risk of environmental impact, well, they need to pull up their socks and get after it and prioritize based on where the highest risks are.”

Foley said corrosion affecting pipelines has been an issue for decades, but fracking can exacerbate the problem.

“The challenges are real,” he said. “Northeast B.C. in particular, they’re fracking these wells to try to enhance production. The challenge is after fracking, they’ve run into issues where they can get some of these frac solids, and some of them can be really aggressive sulphur compounds.”

Frac solids are a mixture of silica sand, water and chemicals used in fracking to extract oil or gas trapped in underground rock formations. Those mixtures, if not properly removed from sections of pipeline that move material from wells to larger, safer transportation pipelines, can damage the metal and cause leaks or spills. Foley said any pipelines with potential or identified corrosion issues associated with active wells should be prioritized.

“Are these wells known to have been discontinued properly?” he wondered. “That’s really what they should be checking in on and making sure of. Any that hasn’t been discontinued properly, that needs to be dealt with immediately.”

CNRL pipelines exempt from clean-up timelines

The BC Energy Regulator said a 2020 audit identified thousands of CNRL pipelines that were either inactive or soon would be. The regulator said that’s what prompted it to strike a deal with the company, one of the largest oil and gas producers in the country.Under that deal — which was not publicly disclosed at the time — the regulator agreed to exempt thousands of CNRL pipelines from normal clean-up timelines in exchange for the company committing to deactivate all of them by 2028, with targets to meet every year until then. 

The regulator later found in 2023 that the company was not meeting those commitments, but reinstated the deal without penalizing CNRL.

A regulator spokesperson said the deal was “the most effective way to bring CNRL into compliance” and claimed the agreement “was not a removal of oversight.” 

As of this month, the regulator said only 474 pipelines remain to be deactivated out of an original total of 4,312.

“As such, CNRL continues to meet and exceed the required deactivation targets set out in the conditions of the exemption,” the spokesperson said.

Drew Yewchuk, an environmental lawyer and PhD student at the University of British Columbia, said it’s not clear what the regulator or the public gained from the deal with CNRL. 

“The regulator is getting less than what the legal requirements are, and the company only has to do less than what was the legal requirement. So what is the regulator getting from these deals?” Yewchuk said.

He said oil companies often argue meeting regulatory requirements would endanger their operations, putting pressure on politicians to intervene.

“They don’t want to cause job losses, and that’s the threat that companies always have in the background,” Yewchuk said. “They say, ‘Look, if you force us to invest too much here, we’re going to move out of this jurisdiction.’ ” 

But he said CNRL isn’t a struggling company. The Calgary-based company reported net earnings of $10.8 billion in 2025.

“CNRL is not out of money,” Yewchuk said. 

Regulator ‘way too tied to industry’

Gass said oil and gas remediation can become a public responsibility if the operating company goes bankrupt. Some provinces, including B.C. and Alberta, charge oil and gas companies an annual levy to clean and shut down so-called “orphan wells” left by defunct firms.

But if the company is still active and profitable, the regulator’s role should be to enforce the rules, Gass said.

“In an ideal situation you have a regulatory regime that assures the accountability and has the enforceability to level penalties for actors that don’t do the remediation as needed,” Gass said. 

The BC Energy Regulator, like other regulators in Canada, is funded by an annual levy charged to oil and gas companies.

While proponents argue an industry-funded regulator is sustainable, critics like the Green Party’s Valeriote argue it creates a dependence that gives energy companies undue leverage in negotiations.

Valeriote said granting exemptions like the one given to CNRL is unfair to other companies following the rules and is “erosive to the regulator’s reputation.”

“I think there’s probably a cultural and systemic issue there and that they’re way too tied to the industry,” Valeriote said. 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Canada’s large oil companies are raking in record profits during an energy crisis.

We’ve been here before — but unlike last time, Ottawa isn’t prodding the industry to use more of the money to clean up its act. In some ways, it’s even volunteering to pick up the tab.

The last time was just four years ago, when Russia’s invasion of Ukraine led to Western sanctions on Russian oil and fears about global energy supply. The price of oil shot skyward, and large Canadian oil companies reaped the benefits, taking in billions of dollars in windfall profits.

The oil and gas industry is the largest source of Canada’s greenhouse gas emissions, which cause climate change that scientists say has been driving major heat waves and wildfires across the country this summer, destroying communities and upending lives.

Yet instead of using its windfall during the Russian invasion to invest heavily in non-emitting energy sources, or to widely deploy technology to decarbonize its operations, the industry began funnelling a larger proportion of its revenues to shareholders, while a group of oilsands companies went to governments asking them to cover much of the cost of their proposed emissions projects.

The federal environment and climate change minister at the time, Steven Guilbeault, pushed back, suggesting oil companies needed to put their money where their mouth is when it came to their own publicly stated environmental goals.

“As Canadians see those profits, we need to see reinvestment into cleaner energy instead of share buybacks,” Guilbeault said in a video posted online in October 2022.

Share buybacks are when companies use cash to buy their own shares back from investors. It’s a different way of giving money to them than dividends, which distribute earnings to shareholders.

The Iran war, that began this February, is again leading to big profits for Canada’s oil industry, which are again being directed in part to shareholders.

The conversation has reignited calls for a windfall profits tax on the oil and gas industry, something more than 60 unions and civil society organizations have been calling for.

In a survey this May by Liaison Strategies, 66 per cent of a random sample of 1,526 Canadians reached by landline and cell phone also supported a tax on oil and gas excess profits, with the revenues going to help lower energy bills.

Elbows Up For Climate, which represents almost 300 mayors, councillors and local officials from across Canada advocating for national environmental projects, is one of the groups calling for a windfall tax.

Former Toronto mayor David Miller is the co-chair of Elbows Up For Climate alongside former Montreal mayor Valérie Plante. Miller told The Narwhal such a tax makes sense given the global fossil fuel industry spent decades obscuring the truth about climate change and lobbying governments to roll back climate action, and so is “in many ways responsible” for delaying the economy’s transition to clean energy.

“We are in a frightening summer from wildfire smoke. The damage yet again will be in the billions, and the question is, who should pay for that? Should it be the general public?” Miller, now managing director of a global network of mayors called the C40 Centre, said. “Or should it be the people, the entities, that are causing the problem?”

“The entities that are causing the problem — which is climate change, that’s what’s making the wildfires so bad — are the fossil fuel companies, and they should pay for the damage. It’s a user-pay kind of principle, and because of the profits they’re making as a result of the U.S.-Israel attack on Iran, it’s a very appropriate moment.”

Oil companies argue they already pay significant taxes as well as royalties, which are separate payments that companies make to the province that owns the resources. In 2024-25, Alberta took in $17.2 billion in royalties from the oilsands.

But the Vancouver-based Centre for Future Work has argued that royalties collect “only a small fraction” of the increased revenues from higher oil prices. In 2022, they found, oil and gas profits jumped almost three times as much as the increase in royalties.

Applying a new windfall tax on oil profits today could generate between $18 billion and $46 billion over the next year, depending on the tax rate and how much of a company’s profits it applies to, according to the Canadian Centre for Policy Alternatives.

The Narwhal asked Environment and Climate Change Minister Julie Dabrusin’s office whether she believes, like Guilbeault did, that oil companies should be spending more on emissions reductions, and what she thought of a windfall profits tax.

“Oil and gas companies have an important role to play in driving down Canada’s emissions,” Dabrusin’s director of communications Chris Zhou responded in an emailed statement.

Zhou said the government was focused on “durable, unifying solutions that will deliver sustained emissions reductions over the long term,” including restrictions on methane, a greenhouse gas, in the oil and gas sector, as well as the industrial carbon pricing system.

Oil companies bringing in record-breaking profits amidst Iran war

The Iran war has led to the intermittent closure of the Strait of Hormuz, the chokepoint between the Persian Gulf and Arabian Sea that one-fifth of the world’s oil is shipped through.

It created the “largest supply disruption in history,” according to the International Energy Agency, and sent oil prices higher again. The higher price translated to big profits for the world’s largest oil companies, and those in Canada have been no exception.

Earlier this month, Canadian Natural Resources Limited, one of the country’s largest oil and gas companies, reported $4.5 billion in profit in the second quarter, which covers April to June. That result was “the strongest in the history of the company,” Chief Financial Officer Victor Clinton Darel said.

The company returned $2.4 billion to shareholders in the form of dividends and share repurchases. This year, he added, was the 26th consecutive year of dividend increases.

The record results followed a report from Cenovus, one of Canada’s large oilsands companies, of a $2.9-billion profit in the second quarter, its “best quarterly financial result ever,” president and CEO Jon McKenzie said. Cenovus plans to increase shareholder returns, and sent $1.4 billion to them in the second quarter.

“We would never apologize nor take credit for a higher commodity price environment, but the key is to run well while it lasts and capitalize on the opportunity,” McKenzie said.

A third oilsands firm, Suncor, recently posted a $3.7-billion profit, and returned $1.7 billion to shareholders — it too said it plans to spend more money giving cash to investors in return for their shares.

Imperial Oil, a Canadian firm majority-owned by one of the world’s largest oil companies, ExxonMobil, posted a quarterly profit of $2.2 billion. John Whelan, the chairman, president and CEO, said Imperial has grown its annual dividend for 31 years.

In addition to reaping rewards from the higher price of oil, Canadian companies have also been creating more of it. Oil production hit a new record last year in Canada, and crude oil production hit the highest volume this May since comparable records began in 2016, according to Statistics Canada.

This year, Cenovus expects to join the club of companies worldwide that can produce, on their own, the equivalent of a million barrels of oil per day, on average. Only one other Canadian company can do that, Canadian Natural, which also said it had hit a new quarterly production record.

Oil execs praise Alberta deal that taxpayers could be on the hook for

During their earnings calls this summer, executives praised Prime Minister Mark Carney’s deal with Alberta Premier Danielle Smith — in which the federal government has hinted it’s prepared to spend significant public dollars.

Canadian Natural, Cenovus, Suncor and Imperial Oil are four of the five members of the Oil Sands Alliance, formerly known as the Pathways Alliance, which signed a trilateral memorandum of understanding with the federal and Alberta governments that envisions a new oil pipeline to the West Coast, to be filled with increased levels of oil production, as well as a new emissions reduction project in the oilsands called Pathways, which will rely in part on carbon capture technology.

Ottawa says two government-owned corporations will own most of the oil pipeline and one of them will develop and run it. The only private-sector involvement announced so far is a pipeline company signing a non-binding agreement to take a 10 per cent interest during construction, with possibly another 10 per cent interest when the pipeline begins operating.

Pressed by CBC News to reveal how much federal money would be involved in building the new pipeline, Natural Resources Minister Tim Hodgson said that while he didn’t have “the numbers in front of me right now,” the cost to build an earlier oil pipeline — the Trans Mountain expansion project, which cost between $30 and $40 billion — was a “reasonable thing to look at.”

The government’s deal with Alberta also includes a commitment from Ottawa to “offer financing or support mechanisms” supporting the operating costs of carbon capture and storage projects.

It’s hard to precisely tally up how much this financing and support might cost Canadians, but the government has already committed billions of dollars in the form of carbon capture tax credits, funding for carbon contracts and other related research and development efforts.

At the same time, it’s unclear how much of their own money oil companies are willing to spend on the industry’s infrastructure — whether that’s to move more oil, or to lower their emissions.

Companies tight-lipped about environmental progress, vocal on environmental regulations

Many major oil companies have cited Trudeau-era changes to the federal Competition Act as a reason why they cannot publish information on their environmental performance on their website or in corporate disclosure reports.

The changes introduced an anti-greenwashing requirement for businesses, ensuring they backed up claims about protecting the environment or tackling climate change with evidence. (While the Carney government removed a rule that required this evidence to conform to internationally recognized standards, it left the broader requirement in place.)

Suncor’s 2025 report on sustainability says the company aims to “reduce the greenhouse gas emissions intensity of our base business,” but notes the report intentionally does not contain any “environmental content or data” due to the law. Cenovus says it does not publish any information on its website regarding its environmental performance or targets, for the same reason.

Imperial Oil’s website says it does not publish “an active representation” of its environmental performance although it mentions efforts in “lower-emission fuels,” renewable diesel, lithium and carbon capture technology. Canadian Natural’s website points to reclamation projects, like tree planting, at its oilsands sites.

The four companies, as well as the Oil Sands Alliance, did not respond to requests from The Narwhal for how much money they have spent over the last year on emissions reductions projects, or their opinion of a windfall profits tax.

They have been outspoken, however, about how environmental policy is affecting their bottom lines.

​McKenzie, at Cenovus, said in June that a new oil pipeline to the West Coast could not be ⁠financed by the ​private sector because of Canada’s industrial carbon pricing system. “Industry has been clear that the industrial carbon tax is insidious and it should be revoked,” he said.

On the July earnings call, ​after announcing record profits, McKenzie again described the industrial carbon pricing system as an “uncompetitive carbon tax that uniquely burdens Canadian industry.”

But he praised the Canada-Alberta deal, saying it “creates a framework for governments and industry to work together on production growth, emissions reduction and expanded market access.”

Similarly, Scott Stauth, president of Canadian Natural, said the agreement was a “positive first step” and said it would “benefit all of Canada by providing more jobs, combined with social and economic benefits to our country.”

“It’s a very different mood and tenure today than it has been in the past. We’re encouraged by that,” Suncor president and CEO Rich Kruger said about the Alberta deal, although he also said there was still “a lot of work to do.”

Oil Sands Alliance President Kendall Dilling said in a statement posted July 13 that the trilateral deal was a “framework that is positive for the oilsands industry and provides a step forward to help enable production growth and to advance the Pathways project.”

“It helps meet our shared vision to grow Canadian oil production and benefit Canadians across the country,” he said.

Windfall profits tax could help offset affordability crisis, advocates say

For his part, Carney posted a video online in June suggesting the world needed more of Canada’s fossil fuels, as a result of the Iran War.

“The hard truth is that we don’t control the price of oil, so what we’re doing is helping Canadians through tough times in the short term,” the prime minister explained.

The government suspended the federal gas tax for the summer as an affordability measure, Carney said. But he also argued that addressing global “energy security” means ensuring Canada supplies the world with as much oil and gas “as possible.”

While he acknowledged this “will mean that our emissions will be higher in the next few years than they were projected to be under the previous government’s plan,” he said Canada “can’t afford to restrain the growth of an important part of our energy mix, oil and gas, to meet a short term goal.”

Carney also claimed Canada’s oil would be “produced responsibly and with a clear focus on lowering emissions over time.”

For Elbows Up For Climate, though, the fact remains that carbon pollution from fossil fuels is directly and indirectly the cause of tens of billions of dollars in damages from climate-driven extreme weather, Miller said.

Annual insured losses reached $37 billion between 2016 and 2025, according to the Insurance Bureau of Canada.

“It’s quite remarkable and eye-opening when you look at [insurance] statistics, and those are happening because of the exploitation of fossil fuels,” Miller said.

“Expanding oil and gas production puts more Canadians at risk of extreme weather, extreme heat and other climate-related disasters. We actually can’t afford those disasters.”

Several groups like the Green Budget Coalition, Canadians for Tax Fairness, Seniors For Climate Action Now, For Our Kids and 350.org have also submitted budgetary recommendations to the House of Commons finance committee that endorse a windfall profits tax on oil and gas companies.

Thomas Green, senior manager of climate solutions at the David Suzuki Foundation, part of the Green Budget Coalition, pointed out that the United Kingdom has its own windfall tax.

Between 2022 and 2025, the UK’s Energy Profits Levy raised 9.1 billion pound sterling, or $17 billion at today’s exchange rate.

The coalition wants to see a new levy on oil and gas companies linked to when oil prices exceed certain thresholds — indexed to inflation and periodically reviewed — and for the money to be allocated toward affordability and climate action measures.

“These profits come at the expense of affordability for everyday Canadians,” Green told The Narwhal.

“A windfall profits tax would at least rectify some of the injustice that we see right now.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Wildfires are raging in every province and territory across Canada, leaving entire First Nations communities burnt, upending the lives of thousands of evacuees and creating plumes of toxic smoke dirtying the air in major cities like Toronto and New York. 

While some politicians claim the out-of-control wildfires are being primarily caused by improper forest management, scientists agree that climate change, driven by greenhouse gas emissions from fossil fuels, is the main culprit.

To stop contributing to the problem, the Canadian government could be implementing strict limits on the oil and gas industry for their carbon dioxide emissions. But Prime Minister Mark Carney has rejected that idea, opting instead for an unproven technological fix. 

In doing so, The Narwhal reported this week, the prime minister has become the latest in a long line of politicians to make big promises about carbon capture and storage to cut industrial emissions, despite the technology’s meager track record in Canada.

Read on to learn more.

1. Climate change from fossil fuels is making wildfires more severe and more frequent

Climate change is altering rainfall and storm patterns, creating hotter and drier conditions and more lighting strikes, causing fire seasons to start earlier and last longer and making those fires burn hotter, grow bigger and spread quicker. The result: Canada’s most recent fire seasons have been among the worst on record.

There’s only one real way to slow this escalating problem, scientists say: stop using so much coal, oil and natural gas, the fossil fuels that generate the emissions that are trapping heat in the atmosphere, changing the climate and leading to more extreme weather.

In Canada, the oil and gas industry is the country’s largest source of emissions. That’s partly because the type of petroleum in Alberta’s oilsands, the world’s fourth-largest proven oil reserve, requires extra electricity, steam, fuel and machines to turn it into usable products like gasoline compared to some other oil deposits. Oilsands emissions have grown from 41 million tonnes in 2007 to 92 million tonnes in 2024.

2. Carney expects Canada will soon generate more, not less, emissions

As Ontario faces what’s now estimated to be its worst wildfire season on record and other provinces and territories have been similarly devastated in recent years, Carney is focused on coordinating an emergency response with those jurisdictions, including managing the thousands of firefighting personnel and hundreds of aircraft involved. The prime minister says he’s committed to deploying “every resource needed to keep Canadians safe.” 

He also signed a deal with Alberta meant to increase oil production. The deal, which includes a commitment to build a new oil pipeline, is expected to result in more carbon pollution. Carney has admitted his government’s actions will raise emissions. More Canadian emissions means Canada is contributing more to the global problem of climate change that’s making wildfires worse.

Environmental advocate Catherine Abreu, a former member of Canada’s Net-Zero Advisory Body, told MPs in June that Carney’s government has “repealed or weakened virtually every climate policy and regulation that Canada had developed in the last decade.”

3. Instead of capping emissions, Carney is betting on carbon capture technology

Carney’s deal with Alberta promises not to follow through with a proposal, first made during the government of former prime minister Justin Trudeau, to implement an emissions cap on the oil and gas sector. 

A cap is a government mandate to prevent emissions from rising beyond a certain point. It’s something the industry itself previously said was achievable: in 2022 a group of oilsands producers came out with a plan they said could cut 22 million tonnes of annual emissions by 2030. That plan involved carbon capture, a technology that filters out carbon dioxide from industrial exhaust streams and stores it so it doesn’t get released into the air. 

But even though the Trudeau government proposed the emissions cap as a way to ensure the industry followed through with that plan, oil companies fought the cap proposal and Carney eventually agreed not to implement it.

Now, Carney’s deal with Alberta includes an agreement to build a carbon capture and storage network in the province, but the ambition has been dialed back considerably. Five oilsands companies agreed in July to use carbon capture technology to remove just six million tonnes of emissions per year by 2035, and a “range of technologies” to eventually capture 16 million tonnes per year by 2045. 

Compare that with an average of 20 million tonnes a year in new emissions from the oilsands that the Canadian Climate Institute has estimated will result from higher production levels to feed the new oil pipeline in the deal.

4. The track record for carbon capture of industrial emissions in Canada is bleak

Carbon capture and storage is real, and in use at nine commercial operations in Canada. But the technology is expensive and requires lots of new construction to scale up, while globally it has underperformed, according to the International Institute for Sustainable Development.

The results speak for themselves. Over a 24-year period, 68.7 million tonnes of carbon dioxide was captured across Canada, according to Environment and Climate Change Canada. That means the oilsands added more to the atmosphere in one year than carbon capture technology has ever stopped from industrial sources over more than two decades.

While oilsands emissions more than doubled from 2007 to 2024, the cumulative amount of carbon being captured from industrial sources is still “on the order of several [million] tonnes per year,” a Natural Resources Canada spokesperson told The Narwhal.

But that’s relatively tiny, compared to the eye-popping figure of 600 million tonnes a year that a government report had once claimed Canada could theoretically capture.

5. Carney’s support for carbon capture makes him the latest in a long line of politicians to tout its benefits

Despite this underperformance, both Liberal and Conservative federal governments in Canada keep projecting optimism about carbon capture’s prospects, dating back to former prime minister Stephen Harper, who gave a speech in Edmonton in 2007 that sounds strangely familiar now. This week, The Narwhal peered into the historical public record — and the national archives — to show just how real the enthusiasm has been.

In Edmonton, Harper talked about “the exciting new technology called carbon capture and storage.” He told Canadians that, “instead of pumping tonnes of carbon dioxide into the Earth’s atmosphere, we may be able to collect it from our oilsands … and pump it deep underground where it will remain for eternity.” He projected confidence, saying he felt “the era of empty rhetoric on the environment is over” and “we’re taking real action that will produce real, tangible results.”

In 2011, his then-natural resources minister Joe Oliver called Canada “a world leader in carbon capture and storage” and “in an excellent position to use this technology on a wide scale.” (Oliver recently wrote an op-ed opposing the latest carbon capture proposal in the oilsands, in part because of the technology’s spotty track record.)

After Trudeau won power in 2015, his first natural resources minister, Jim Carr, told a ballroom full of people in New York in 2016 that carbon capture is one of “the most pressing issues of the day.” One of Carr’s successors, Seamus O’Regan, would go on to describe carbon capture as “an integral part of lowering emissions” that was part of “how we get to net zero.” In 2021, he said Canada was “on the cusp of doing a lot of these things.”

Last year, Carney’s minister of energy and natural resources, Tim Hodgson, a former oilsands company board member, told a Calgary business crowd that the government, as much as private industry, should be pulling for the carbon capture project in the oilsands. In a faint echo of Harper, he said this government “will not be a government of talk, but a government of action.”

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Summary

• Two decades of records show Canadian politicians making big promises about carbon capture technology.
• In 2008, one government report claimed Canada could capture as much as 600 million tonnes of carbon a year — and carbon capture technology could be “implemented quickly.”
• From 2000 to 2024, a total of just 68.7 million tonnes of carbon dioxide was captured across Canada and experts say the technology has yet to be proven at scale.

It was March 2007. Apple had just debuted the iPhone. The Iraq War was raging. Al Gore’s An Inconvenient Truth had won two Oscars. And the prime minister of Canada was talking about “the exciting new technology called carbon capture and storage.”

“Instead of pumping tonnes of carbon dioxide into the Earth’s atmosphere, we may be able to collect it from our oilsands, our coal-fired electrical plants and other industrial emitters, and pump it deep underground where it will remain for eternity,” Stephen Harper told a crowd of journalists at an event in Edmonton that year.

“If we can perfect this technology, we can use it not only to curb Canada’s contribution to greenhouse gas production, but we could also export it around the world.”

It was the beginning of a long line of claims from political leaders in Canada about how carbon capture could slash planet-warming industrial emissions, including in the oilsands, the world’s fourth-largest proven oil reserve, where 159 billion barrels lie buried under Albertan sand and clay.

For close to 20 years, both Liberal and Conservative governments have talked about using carbon capture and storage technology to filter out carbon dioxide, a greenhouse gas, from exhaust streams and store it so it doesn’t get released into the atmosphere, where it traps heat and causes climate change. Yet, while oilsands carbon pollution more than doubled from 2007 to 2024 to 92 million tonnes, the ability of facilities in Canada to capture carbon from industrial sources hasn’t yet grown beyond a few million tonnes of emissions per year.

Meanwhile, the consequences of fossil fuels and climate change are being felt today. Life is more expensive, cities have dirtier air from wildfires, deadly heat waves and other extreme weather are more common, First Nations are disproportionately threatened with disasters and Canadians are more at risk of poverty, heart disease, cancer and premature death.

Around the time Harper spoke in Edmonton, mining the oilsands was thought to be generating 26 million tonnes of emissions. Since then, the federal national inventory report has recalculated historical emissions using updated methodologies and new data to find it was closer to 41 million tonnes. The petroleum in the oilsands starts as a viscous goo called bitumen, and takes large amounts of electricity, steam, fuel and heavy machinery to mine and transform into usable products. This extra activity means oilsands production has been associated with more emissions than some other oil deposits, adding to its climate impact when its end products like gasoline are eventually burned for energy.

There was also a boom happening when Harper made his remarks. Investment in the oilsands had tripled from 2003 to 2007, leap-frogging manufacturing, while oil and gas operating profits had doubled. Office space in Calgary, where many oil companies are headquartered, had dried up as the province rode a wave of record-low unemployment. By 2009, production levels from the oilsands would muscle out other forms of oil production in Canada.

Scientists agree the way to slow the chaos unleashed by climate change is to stop using so much oil, gas and coal. But Harper wasn’t about to impose strict government limits on oilsands emissions that day in 2007. Instead, he would talk about using carbon capture as a possible environmental and economic solution.

“This is a dream that could truly change the world,” he said.

“Friends, the era of empty rhetoric on the environment is over. We’re taking real action that will produce real, tangible results.”

Nineteen years later, that dream is still waiting to be realized.

From 2000 to 2024, 68.7 million tonnes of carbon dioxide was captured in the country, Environment and Climate Change Canada confirmed to The Narwhal. That means the oilsands added more emissions to the atmosphere in one year, 2024, than carbon capture equipment has ever stopped from industrial sources over roughly a quarter-century.

It’s also a small fraction of the capture amounts once thought possible. A 2008 report that came out of Harper’s announcement said Canada could theoretically capture as much as 600 million tonnes a year, and that carbon capture could be “implemented quickly, within a decade, using existing technology.”

Carbon capture and storage “is a viable way to achieve significant domestic greenhouse gas reductions,” the report stated, and is a “must-have for western Canada which relies on fossil energy.”

Instead, after tremendous attention and investment, this year Canada will be able to capture “on the order of several [million] tonnes per year,” a Natural Resources Canada spokesperson told The Narwhal. (The department declined to offer a precise figure when asked.)

Capturing this amount when the oil industry is sending so much more into the air is equivalent to taking a million cars off the highway while 30 million more drive up the on-ramp.

“Carbon capture has never, ever been proven at scale, or price. That’s just a fact,” Catherine McKenna, a former environment minister under the Justin Trudeau government, said in an interview.

“The oil and gas companies talked to me about carbon capture and storage, and made promises, for like a decade. We have yet to see anything.”

Now, like Harper before him, Prime Minister Mark Carney is putting his faith in carbon capture technology to do the heavy lifting, while he advocates for more oil production.

Carney struck a deal with Alberta that promises not to follow through with a Trudeau-era proposal for an emissions cap on the oil and gas sector.

Instead, the deal, meant to grow oil production and get a new oil pipeline to the West Coast built, includes an agreement to build a carbon capture and storage network in the province.

In July, five oilsands companies agreed to terms that envision using carbon capture to suck out six million tonnes of oilsands emissions per year by 2035. The project, dubbed Pathways, is supposed to use a “range of technologies” to eventually capture 16 million tonnes per year by 2045.

“The Alberta [deal] will build carbon capture and storage,” Carney said in Parliament in January. “It will build our future.” The deal, he told reporters in June, is about “working together, getting results for the citizens.”

His minister of energy and natural resources, Tim Hodgson, a former oilsands company board member, told a Calgary business crowd last year that the government, as much as private industry, should be pulling to get Pathways off the ground.

“All of us — governments and industry — need to get the Pathways project done. This government will not be a government of talk, but a government of action,” Hodgson said.

The federal government was boasting about being ‘a world leader in carbon capture’ in 2011

Harper’s full remarks from that day in 2007 are held at the national archives in Ottawa, where The Narwhal listened to a recording of them in June.

But plenty of other comments exist online in the public record of others talking optimistically about carbon capture to lower emissions.

In 2011, for example, Harper’s then-natural resources minister Joe Oliver said Canada was “a world leader in carbon capture and storage” and was “in an excellent position to use this technology on a wide scale.”

The next year he repeated this message: “Canada is in an excellent position to lead the world in the development, implementation and deployment of carbon capture and storage technology.”

In 2013, he said the government was “devoting significant amounts of money to carbon capture and storage, and we are doing that in co-operation with companies.”

Oliver now opposes the latest carbon capture proposal in the oilsands, in part because of the technology’s spotty track record and uncertain impact.

The trend continued after Trudeau’s Liberal government won power in 2015. Trudeau’s first natural resources minister, Jim Carr, told a ballroom full of energy analysts in New York in 2016 that carbon capture is one of “the most pressing issues of the day.”

The next year, he said carbon capture improves Canada’s “environmental performance.”

One of Carr’s successors, Seamus O’Regan, would describe carbon capture as “an integral part of lowering emissions” and said it was part of “how we get to net zero.” In 2021, he told CBC News Canada was “on the cusp of doing a lot of these things.”

François-Philippe Champagne, who in 2024 was Trudeau’s industry minister and is now finance minister, described Canadian companies then as “world leaders in carbon capture” and portrayed it as one of the “clean-tech solutions for the net-zero economy.”

(Story continues below.)

Two decades of political support for carbon capture

• Jan. 23, 2006: Harper Conservatives win minority government
• May 11, 2006 “Canada is already on the right track, particularly in research on energy efficiency, alternative energy sources and carbon capture and storage technologies. These technological advances will help us reduce greenhouse gas emissions and will enable Canada to capitalize on its huge energy potential for the benefit of all Canadians.”— Christian Paradis, parliamentary secretary to the minister of natural resources, in Parliament
• March 8, 2007 “Instead of pumping tons of carbon dioxide into the Earth’s atmosphere, we may be able to collect it from our oilsands, our coal-fired electrical plants and other industrial emitters, and pump it deep underground where it will remain for eternity. … Friends, the era of empty rhetoric on the environment is over.”— Stephen Harper, prime minister, Library and Archives Canada
• April 4, 2008 “Our government is ensuring that Canada is at the leading edge of clean technologies to reduce emissions and adapt to environmental change. That is why in Budget 2008, we announced $5 million … [to] address outstanding issues in the deployment of carbon capture and storage technologies.”— Gary Lunn, natural resources minister, press release
• Oct. 14, 2008: Harper Conservatives win minority government
• Oct. 18, 2009 “Carbon capture and storage is the most viable technology for reducing greenhouse gas emissions. Our government’s recent investment in large-scale demonstration projects further advances Canada’s leadership in this technology, while building a knowledge base to share this expertise with our global partners.”— Lisa Raitt, natural resources minister, press release
• March 16, 2010 “The $1-billion fund relating to green technology investments, including carbon capture and storage, which was set up in the 2009 budget, is not a research investment. These are demonstration projects investments. … The only known technology to abate carbon emissions from thermal coal plants is carbon capture and storage. It is the only technology that has ever been discovered that can actually abate emissions.”— Jim Prentice, environment minister, at committee
• May 2, 2011: Harper Conservatives win majority government
• June 24, 2011 “Canada is a world leader in carbon capture and storage and we are in an excellent position to use this technology on a wide scale.”— Joe Oliver, natural resources minister, press release
• March 27, 2012 “Canada is in an excellent position to lead the world in the development, implementation and deployment of carbon capture and storage technology.”— Joe Oliver, natural resources minister, at committee
• May 21, 2013 “We are devoting significant amounts of money to carbon capture and storage, and we are doing that in co-operation with companies, because that is the way to do it. Our government is a world leader in carbon capture and storage.”— Joe Oliver, natural resources minister, in Parliament
• Oct. 6, 2014 “We were proud to support the research and development of carbon capture and sequestration, and see the technology developed through commercialization at the Boundary Dam project, a technology that will reduce greenhouse gas emissions at that facility by 90 per cent. We remain committed to growing the economy and reducing greenhouse gas emissions with world-leading technologies.”—Greg Rickford, natural resources minister, in Parliament
• Feb. 19, 2015 “Since 2006, our government has made investments of over $10 billion to transition Canada toward a clean energy economy and help reduce greenhouse gas emissions over the long term. … These funds have helped establish Canada as a global leader in the research, development and demonstration of carbon capture and storage technologies.”— Colin Carrie, parliamentary secretary to the minister of the environment, in Parliament
• Oct. 19, 2015: Trudeau Liberals win majority government
• April 4, 2016 On a North American memorandum of understanding on climate and energy: “It’s an aspirational agreement that focuses our three countries on the most pressing issues of the day … [including] advancing the competitiveness of carbon capture, use and storage.”— Jim Carr, natural resources minister, prepared remarks for a speech
• Sep. 14, 2017 “Carbon capture and utilization technology creates new products and business revenue stream opportunities while improving our environmental performance, creating jobs and driving clean growth in the process.”— Jim Carr, natural resources minister, press release
• Nov. 9, 2018 About a $2-million investment in a carbon capture project: “This project leverages today’s traditional resources to deliver tomorrow’s clean energy solutions. Developing and adopting clean technologies will help Canada meet its domestic and international climate change commitments and help maintain our natural resource advantage for years to come.”— Amarjeet Sohi, natural resources minister, press release
• June 17, 2019 On signing two memorandums of understanding: “The second commits Natural Resources Canada and the Japan Coal Energy Center to work together on clean energy, including carbon capture utilization and storage technologies.”“Canada is taking a leadership role in the clean growth century by balancing the environment and economy both domestically and internationally.”— Paul Lefebvre, parliamentary secretary to the minister of natural resources, press release
• Oct. 21, 2019: Trudeau Liberals win minority government 
• June 15, 2020 “We see carbon capture and sequestration as an integral part of lowering emissions and making emissions more competitive, making our oil and gas industry more competitive.”— Seamus O’Regan, natural resources minister, at committee
• March 9, 2021 “Carbon capture technology creates jobs, lowers emissions and increases our competitiveness. This is how we get to net zero.”— Seamus O’Regan, natural resources minister, press release
• April 21, 2021 “I lead a department of scientists who are looking at things like carbon capture and storage, both onshore and offshore. … We are on the cusp of doing a lot of these things.”— Seamus O’Regan, natural resources minister, interview
• Sept. 20, 2021: Trudeau Liberals win minority government
• March 28, 2022 “We are taking bold action on climate change. … We see carbon capture and underground storage as part of the solution.”— Terry Duguid, parliamentary secretary to the minister of environment and climate change, in Parliament
• Feb. 7, 2023 “We are investing billions of dollars in climate action and into the new economy. We have eliminated six fossil fuel subsidies and are on our way to eliminating nine. We need to use every tool in the toolbox to reduce our emissions, including carbon capture.”— Terry Duguid, parliamentary secretary to the minister of environment and climate change, in Parliament
• May 8, 2024 “My colleagues are well aware that Canadian companies are world leaders in carbon capture and hydrogen fuel cell technology. That’s why we will continue to support the adoption of made-in-Canada clean-tech solutions for the net-zero economy.”— François-Philippe Champagne, industry minister, at committee
• April 28, 2025: Carney Liberals win minority government
• May 23, 2025 “We will invest in carbon capture, methane reduction and other technologies to ensure Canadian oil and gas is not only produced responsibly, but is the most competitive in the world. All of us — governments and industry — need to get the Pathways project done.”— Tim Hodgson, natural resources minister, prepared remarks for a speech
• April 13, 2026: Carney Liberals achieve majority government
• June 25, 2026 “We will deepen co-operative federalism with initiatives [like] Alberta’s proposed carbon capture and pipeline to the West Coast. … With the implementation agreement around carbon capture, [the government is] working together, getting results for the citizens.”— Mark Carney, prime minister, news conference (not online)

The Trudeau government’s emissions cap proposal came together after the Oil Sands Alliance, a group of major producers formerly known as the Pathways Alliance, had publicized a project they originally claimed could cut 22 million tonnes of oilsands emissions by 2030, with carbon capture being a central element of their plans.

The natural resources minister at the time, Jonathan Wilkinson, portrayed the emissions cap as a way to ensure the industry did what it said it could do.

Oilsands companies fought the proposal. A group of them pushed the government to delay and weaken the emissions cap’s rules, saying they needed “flexible and cost-effective” rules and a “long lead time” to prepare. By 2024, the boss of one of the country’s largest oil and gas companies was openly calling for the idea to be abandoned. Alberta Premier Danielle Smith also came out against the proposal.

Last year, after Carney won power, Canadian oil and gas executives and lobby groups called on him to “unwind the past decade” of Trudeau-era policy altogether, killing not only the emissions cap but also other environmental rules. The prime minister has ticked off several boxes on their wishlist.

The Narwhal reached out to more than a dozen current and former government officials to ask them if they stood behind their comments about carbon capture today, knowing what they know now.

Minister Hodgson’s spokesperson forwarded the questions to Natural Resources Canada. A spokesperson for his department responded that technologies like carbon capture are “important tools in Canada’s broader climate toolbox of measures to reduce or remove emissions, while strengthening growth and security.”

Carbon capture and storage “holds great opportunity to advance climate competitiveness, and is an area where Canada can lead internationally and sell components and expertise in global markets,” they said in an email to The Narwhal. It offers a “practical path to reduce emissions, protect and create jobs, sustain economic growth and keep Canadian industries globally competitive.”

A spokesperson for Champagne declined to comment. The others did not respond.

The Narwhal also sent separate questions to Natural Resources Canada directly. Another spokesperson claimed Canada’s industrial carbon capture rates will rise in the coming years.

“While Canada has already captured and stored or used significant volumes of [carbon dioxide] the sector is growing, with new projects and infrastructure expected to come online as technology improves and evolves,” the spokesperson said in an email.

There’s a “growing list of potential projects across multiple industrial sectors” today, they said, and “these projects are expected to increase capture volumes over time.”

Canada doesn’t publish an official forward-looking estimate of carbon capture potential, the department said. And the spokesperson pointed to a number of challenges with carbon capture adoption. For one, the projects are “large, capital‑intensive and technically complex.”

Carbon capture is expensive. The Pathways proposal was initially estimated at $16.5 billion and is now pegged at between $20 billion and $30 billion, despite lowering the amount of emissions it is intended to capture. At times it has seemed like it could struggle to break even, according to the Institute for Energy Economics and Financial Analysis.

The government is offering federal financial incentives for carbon capture, and Carney reversed a Trudeau-era ban on companies from accessing that incentive when they pump the captured carbon into wells to loosen up more oil for extraction.

Despite hitting record profits in recent years, oil companies have in the past largely resisted spending the billions of dollars necessary to build out carbon capture equipment across their large properties. Instead the industry spent years lobbying the government for lucrative public subsidies to install and run carbon capture systems.

Scaling up carbon capture and storage also requires building new pipelines and storage hubs. A Natural Resources Canada spokesperson said the technology continues to “evolve” and investors are looking for enough “market demand for low‑carbon products,” which the government believes has been bolstered with the Alberta deal.

Globally, the technology has underperformed, according to the International Institute for Sustainable Development. One of Canada’s own flagship projects captured less carbon than initially thought. In 2022, more than 400 academics wrote an open letter to Canada saying carbon capture was “neither economically sound nor proven at scale,” despite decades of research.

Carbon capture used to secure social licence for pumping more oil

When it comes to techniques for keeping carbon out of the atmosphere, using carbon capture technology on industrial sources is only one approach.

Other types of technologies, collectively called carbon removal, can draw existing emissions from the atmosphere or store carbon permanently in other forms like rock.

There are 11 million tonnes worth of annual permanent carbon removal capacity in the planning stages in the country, according to Carbon Removal Canada, an independent non-profit. Those plans are for new projects such as direct air capture or carbon mineralization, but not industrial carbon capture.

The Intergovernmental Panel on Climate Change, the United Nations body that provides governments with climate science, has said carbon capture and carbon removal technologies will have to be part of the mix of techniques that countries use to slow the rise in planetary temperatures causing climate change.

It’s a point Steven Guilbeault, who served as another environment minister under Trudeau and helped develop the emissions cap proposal with Wilkinson, raised several times in Parliament. Canada needed to look at every possible technology that could help reduce emissions, he argued.

But the United Nations panel was also clear these kinds of technologies are not a substitute for a “substantial reduction in fossil fuel use,” rather something to be used alongside those efforts.

In an interview with The Narwhal, Guilbeault said Canadian politicians have often misunderstood the difference, seeing carbon capture as “a way to continue pumping oil and gas in Canada.”

“It’s a technology we will need, but it’s not in lieu of reducing emissions, and unfortunately it seems that a lot of people haven’t understood that,” he said.

The technology “is a very convenient, theoretical, technical fix to a larger problem,” Guilbeault said. “We humans tend to look for easy fixes, sometimes, to complex problems.”

Evidence also suggests carbon capture has been popularized by the oil and gas industry to shield itself from criticism. In 2022, a U.S. Congressional probe found oil companies were talking about carbon capture publicly as a way to mitigate their climate impact, but internally were discussing it as a way to secure “social licence” to continue producing fossil fuels.

In June, the investigative outlets ProPublica and Drilled published evidence the oil company BP helped shape an academic paper that oversold carbon capture’s readiness, while the oil and gas industry funded research at universities that boosted the technology.

Guilbeault said he has “always been skeptical” of the oil industry’s carbon capture proposal in Alberta.

His skepticism is shared by former oilsands executive and former member of Parliament Martha Hall Findlay, who helped develop the industry’s initial Pathways carbon capture proposal. She now argues Canada should “postpone” the project and focus on other priorities.

Federal Conservative Leader Pierre Poilievre is also skeptical of Carney’s plan.

A former Harper government minister of democratic reform, and employment and social development, Poilievre has supported subsidizing carbon capture in the oil and gas industry in the past. In 2022, shortly after becoming leader, he said the Canadian energy industry was “leading in the world” on carbon capture, and accused the Trudeau government of being “slow to support it and insufficient in that support.”

In 2023 he asked, “Why do we not use technology instead of taxes to fight climate change? Why do we not support our energy sector in pumping the carbon back into the ground through carbon capture and storage?”

More recently, Poilievre has criticized Carney’s deal with Alberta for committing billions of dollars to a “money-losing carbon capture project that has never been proven anywhere.”

Asked by The Narwhal why he’s soured on support for carbon capture, Poilievre said he only sees value if it’s used to extract more oil.

“When you pump carbon back in the ground and pressurize the geology, and you can bring up more oil, they can then go out and make the world a better place,” he said.

“The other is just pumping air into the ground and getting nothing in return. … How’s it going to make money?”

Updated on July 22, 2026, at 11:48 a.m. ET: This story was updated to include the latest figure for 2007 oilsands emissions from the national inventory report. While a report from Alberta published in 2008 put the figure at 26 million tonnes, the national inventory report has recalculated historical emissions figures with updated methodology and additional data, putting it at 41 million tonnes of emissions.

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Summary

• Canada’s updated national building code puts limits on new buildings’ greenhouse gas emissions, though provinces can choose whether or not to implement them.
• The new rules could reduce the use of natural gas, a fossil fuel, to heat Canadian buildings.
• Documents obtained by The Narwhal reveal an effort by the Canadian Gas Association to lobby against the changes.

Natural gas companies lobbied against federal building guidelines that could help weaken the fossil fuel industry’s iron grip on Canadian communities, according to documents obtained by The Narwhal. 

In December 2025, a federal-provincial body published a new national building code that, for the first time, limits the volume of greenhouse gases that can be emitted by a building, whether from a gas-burning stove, heating system or hot-water tank. As they developed the code, officials held years of consultations with groups including the gas industry, to hear thoughts on changes that could set a precedent that limits natural gas use in new builds.

These limits are called “operational greenhouse gas emissions provisions.” In practice, they mean builders have to consider whether the heating, cooling and cooking systems they outfit a home with will produce emissions that push it beyond that threshold.

Natural gas, a fossil fuel mostly made up of the greenhouse gas methane, represents almost half the energy used in residential buildings in Canada — and almost two-thirds of their carbon pollution. Burning natural gas to heat Canadian homes and water is a big reason why buildings here are the third-largest climate polluter by economic sector, after other fossil fuel-dependent industries like transportation and oil and gas production.

Natural gas also poses threats to public health. While the industry takes steps to limit human exposure, research shows oil and gas fracking can impact birth and respiratory outcomes. When gas is used in the house, it exposes the occupants to air pollutants. When it’s liquefied for export, that’s often done at a facility that flares off excess gas, which also releases pollutants that affect human health. Methane itself, which traps heat in the atmosphere and drives climate change, is on Canada’s toxic substances list.

Coupled with the government’s push to fast-track large-scale housing projects nationwide, the new code could represent a big change in how many Canadians rely on fossil fuels in their homes. That is, if provincial governments play along. The new guidelines aren’t likely to be enforced nationwide anytime soon. It’s up to the provinces to pick and choose what parts to implement, if any; Ontario’s building code, for example, hasn’t been updated in years. 

What’s more, the new limits may not even impact new gas hookups for buildings at all: the code offers a range of standards, and the least restrictive still accommodate “current construction practices using natural gas for space and water heating,” according to the documents, which were obtained through access to information law.

None of that, however, stopped the lobby group Canadian Gas Association from complaining about the new rules.

The industry group has a board of directors made up of executives at companies in the business of distributing gas. During the consultations, it “raised concerns about newly introduced operational greenhouse gas emissions provisions and their potential impacts on housing affordability and energy costs,” according to a January 2026 briefing note for Canada’s deputy minister of housing, infrastructure and communities.

According to the industry group, the rules “could effectively ban natural gas, increase housing and energy costs and favour electrification without considering affordability or infrastructure feasibility,” the briefing note continued. 

The building code development process is governed by a federal-provincial body called the Canadian Board for Harmonized Construction Codes, while the National Research Council provides support once the codes are developed. Both of those organizations were “aware” of the gas lobby group’s concerns and were “working to address them,” the briefing note said.

The Narwhal asked the office of federal Housing and Infrastructure Minister Gregor Robertson how the government planned on addressing the industry’s lobbying. A spokesperson for the ministry responded that it “is one of several government institutions that have been lobbied on the issue of building codes, as per private groups’ and individuals’ right to communicate with elected or appointed government officials,” adding that records of that lobbying are publicly available. The department “will continue to work with its partners at all levels of government and all industries to help ensure that Canadian infrastructure and housing reflect the diverse needs of communities across the country, while continuing to support Canada’s commitments on climate mitigation and resilience.”

The Canadian Gas Association did not respond to a request for comment.

Cities and provinces say natural gas limits will hinder homebuilding

If provinces enforce the highest performance levels in the building code, it’s possible natural gas hookups wouldn’t pass muster, according to Kevin Lockhart, the director of the Pembina Institute’s buildings program.

But it was a “mischaracterization to call it a ban,” he said, since builders have different options in the code to help them meet different aspects and building requirements.

The difficulty of reducing emissions in older buildings is a key reason limiting natural gas in new buildings is important, Betsy Agar, director of buildings policy at Efficiency Canada at Carleton University, said. 

New builds are a tiny portion of Canada’s overall building stock, she said, “less than two per cent of square floor area every year, and 80 per cent of our buildings that exist today will still exist in 2050. Those are the ones that are hard to electrify.”

The enormous task of retrofitting older buildings is one reason it’s difficult to justify rules that would let brand-new construction continue to install natural gas, when other options are available, Agar said. Especially since infrastructure and agreements that allow gas companies to access land and customers are proving hard to dislodge.

B.C. has previously strived for ambitious building code standards. But in Vancouver, where an estimated three-fifths of carbon pollution comes from burning gas for heat, city council voted in May to pause rules that tracked emissions and limited natural gas heating in new homes. 

Vancouver Mayor Ken Sim argued that allowing gas heating in new homes would catalyze new home construction, but critics say the city is rolling back climate action.

In Ontario, the Doug Ford government has also been a strong defender of natural gas as an energy source delivered to both buildings for heating, and to power plants to generate electricity. Early in its tenure, the Progressive Conservatives cancelled hundreds of renewable energy contracts and then awarded new contracts to natural gas plants in 2022.

In late 2023, the province’s energy regulator found gas hookups in new builds may not be the most economical option for the ratepayers that foot the bill for those connections. The regulator ruled developers should pick up that cost, urging them towards cleaner and more cost-effective systems. 

Within days, and after much communication with Enbridge Gas, the Ford government vowed to overturn the ruling, and made good on that promise in August 2024.

Agar said in most cases, industry is “really resistant to strict regulations.” Building codes that drive toward electrification, she said, have particularly been in industry’s crosshairs.

“There’s just been this visceral response to it,” Agar said. But, she added, “the sooner that you adopt these codes, it means that people are living in better, more efficient, more comfortable homes, then all those new builds that we’re building don’t need to be retrofitted years down the line.”

Build Canada Homes will ‘encourage’ energy efficiency — but feds still support natural gas

The January briefing note was prepared for a meeting scheduled between the deputy minister of housing, infrastructure and communities and two members of the Canadian Gas Association, documents show. At that meeting, the deputy minister was expected to ask gas companies about their alternative proposals to the building code rules.

None of the lobby group’s proposals listed in the briefing note were focused on eliminating gas access in new builds. They included “reducing emissions from the gas supply stream,” meaning reducing methane escaping from pipelines that deliver the gas to markets. Another was “hybrid heating,” or pairing an electric heat pump with a natural gas furnace. 

There was also a proposal to blend more “renewable natural gas” — methane captured from food waste and compost, for example — into the system, which may reduce underground extraction of natural gas, but won’t necessarily make a big dent in emissions. And there was mention of blending in hydrogen, which is commonly produced with fossil fuels. There was no comment in the briefing notes about how the government received these proposals.

Build Canada Homes, the federal agency meant to respond to the housing crisis, has said it will “favour projects that demonstrate energy efficiency and climate performance.” The briefing note said Build Canada Homes “will encourage proponents to meet higher energy efficiency tiers” of the building code, but only “where practical and cost-effective.”

Lockhart, at the Pembina Institute, said the federal government could try harder to “drive higher performance in buildings.” That could include making emissions standards in the building code a formal prerequisite for any new homes that receive Build Canada funding.

It’s difficult to predict how Prime Minister Mark Carney’s government will respond to industry’s displeasure with the code. His election platform promised to phase out fossil fuel use in government-owned buildings by 2030, as well as ensure “new federal buildings” would adopt the top performance tiers for energy efficiency and emissions reductions. 

His platform also committed to “reforming and simplifying national building codes,” a promise reiterated in his spring economic update as a way to speed up construction. 

The spring also saw the release of the Carney government’s electricity strategy, which predicts at least a doubling of electricity demand, in part to address the electrification of buildings.

At the same time, the electricity strategy has an entire page devoted to “Natural gas’ strategic role,” where it describes the fossil fuel’s use for electricity generation in glowing terms like “reliable,” “affordable,” “secure,” “flexible” and “abundant.”

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Summary

• The federal government will offer tax credits to companies that capture carbon pollution and use it to extract more oil.
• That process is called enhanced oil recovery, and it involves injecting carbon dioxide deep underground to push more oil to the surface.
• Critics say subsidizing enhanced oil recovery operations is counterproductive. It does stop some carbon dioxide from escaping into the atmosphere, but it also enables the production of more carbon-emitting fossil fuels.

Canada is planning to give financial incentives to companies that capture carbon dioxide and use it to produce more oil. The technique, called enhanced oil recovery, was formerly barred from receiving federal tax credits. 

Huh? Enhanced oil recovery? You’d be excused for scratching your head.

The technique uses carbon dioxide to pump more oil (we’ll get into it below) — and is controversial. Can you reduce emissions by pumping more oil? 

But the government’s ban on subsidies for enhanced oil recovery projects was reversed in dramatic fashion last year, first in a deal with Alberta that resulted in cabinet minister Steven Guilbeault resigning.

The government then solidified the change across the country in its latest economic update.

So what is enhanced oil recovery and what are its impacts on emissions and on government finances?

Here’s a primer.

Back up, what’s carbon capture, utilization and storage?

Industries emit a lot of carbon dioxide. Too much. Governments have tried to incentivize companies to reduce the amount of carbon pollution they release into the atmosphere — where it traps heat and contributes to climate-driven problems like increased wildfire, hurricanes, droughts and more.

One strategy is to capture the carbon pollution rather than release it up into the sky, then either store it (storage) or use it to make other things (utilization). When it’s stored, it’s most often injected deep underground.

There are two options in this scenario: one, it can be stored underground, plain and simple. Buried and forgotten.

The second is that you use the carbon dioxide to get more oil out of the ground, then store it. That’s what’s known as enhanced oil recovery — in essence, injecting carbon dioxide into a well so you can get more oil. Globally, it’s by far the most common of the two.

A 2022 report found nearly three-quarters of captured carbon pollution around the world is used to extract more oil.

How does enhanced oil recovery work?

Enhanced oil recovery can involve pumping anything from water to steam to gas deep into the ground to increase pressure in an underground oil reservoir. The goal? To force more oil out of a well. 

But in this instance, we’re talking specifically about using captured carbon dioxide as the pressure builder, often alongside water.

A company will either capture carbon pollution, or purchase it from another source, and then inject it deep underground to push more oil to the surface. Most of that carbon pollution will then remain trapped underground.

A well-designed system will capture emissions from the enhanced oil recovery operation and reinject them back into the reservoir, creating a closed loop, but not all systems will capture all emissions.

Sounds smart, what’s up?

The process can significantly prolong the lifespan of a fossil fuel reservoir, so it makes sense if the goal is to increase or extend production. 

It also creates a bigger market for captured emissions, further incentivizing companies to capture carbon pollution rather than release it into the atmosphere. 

But the issue is that enhanced oil recovery takes carbon dioxide, ostensibly captured to reduce emissions, and uses it to pull more carbon-emitting fossil fuels from the ground.

Determining whether there is a net reduction in emissions from this process is complicated and depends on a lot of factors — including how much traditional production is displaced by enhanced oil recovery, how much carbon is actually stored underground, the impact on prices and demand, how much carbon is produced while recovering oil, the type of oil produced and the lifecycle of the fuel that is produced.

Sound complicated? It is.

Research suggests the process can achieve reductions in per-barrel emissions, commonly referred to as emissions intensity.

On the other hand, enhanced oil recovery produces more carbon pollution than simply capturing and storing emissions permanently underground.

Traditionally, enhanced oil recovery used carbon dioxide that was naturally occurring and already stored underground, but newer methods involve using captured emissions — a critical distinction when discussing the potential of any emissions reductions. 

As one 2025 peer-reviewed meta-analysis of enhanced oil recovery research dryly suggested, “the extent to which [carbon capture and utilization] projects that store captured [carbon dioxide] in oil reservoirs support achieving [greenhouse gas] emissions targets is debated.” 

That study found analyses of the life-cycle emissions of enhanced oil recovery vary greatly — all the way from increasing emissions to reducing them.

So, why are we talking about this?

The previous Liberal government announced tax credits for carbon capture and utilization projects, significantly reducing costs for the companies building them. Projects are typically expensive to build and the government wanted any and all emissions reductions to move ahead. 

It excluded enhanced oil recovery, arguing it was counterproductive to reducing overall emissions and the government’s goal to move toward a net-zero economy.

The Liberals under Prime Minister Mark Carney, however, reversed that decision and announced enhanced oil recovery could receive tax credits, first in a November memorandum of understanding with Alberta regarding a new pipeline, and then again in its latest economic update. Industry cheered the decision, while those concerned with emissions cried foul.

Under Carney’s new rules, a project will have to permanently store 95 per cent of the carbon dioxide used to pump more oil be eligible for tax credits. 

In Alberta, the government already provides tax credits for enhanced oil recovery operations. That program does not include the need to capture a minimum amount of carbon in order to qualify.

Critics call these credits a fossil fuel subsidy. Companies who receive the money from the federal and provincial governments do not. Therein lies the debate.

What will this cost taxpayers?

That will depend on how many producers meet the criteria set by the government.

In 2024, the Parliamentary Budget Office estimated the tax credit would cost the government $5.7 billion between 2022 and 2028 — but that was before enhanced oil recovery was added to the list of eligible projects. It’s unclear what the impact of that addition will be. 

There is one important distinction: the tax credits for enhanced oil recovery aren’t as lucrative as those for storage alone: the amount of money an oil project can recoup is half of what a company that simply stores carbon permanently underground can receive. 

For that reason, the federal government estimates credits for enhanced oil recovery might actually save some taxpayer dollars — $395 million over four years, starting in 2027, according to a federal Department of Finance official responding to questions from The Narwhal.

The official said the savings would come from companies deciding to store carbon for enhanced oil recovery rather than dedicated storage, and receive less public money for doing so.

While incentivizing enhanced oil recovery may represent a savings in terms of tax credits, the costs come from increased emissions and long-term impacts.

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Summary

• In briefing notes, officials with Canada’s natural resources department compared a federal office to a White House council tasked with stewarding energy projects forward.
• Canada’s Major Projects Office is meant to speed up developments including natural gas and mining.
• A First Nations leader noted Canada’s different constitutional framework, while environmental experts and advocates cautioned against following Trump’s push for “energy dominance.”

Prime Minister Mark Carney’s special office for speeding up major projects “operates similarly” to U.S. President Donald Trump’s energy “tiger team,” according to internal Canadian government records.

The comparison between Carney’s Major Projects Office and the president’s National Energy Dominance Council, or NEDC, are contained in a briefing note for Canadian Energy Minister Tim Hodgson that was obtained by The Narwhal through an access to information request.

“The NEDC operates similarly to the Major Projects Office,” the briefing note from Natural Resources Canada reads, “providing support to advance projects efficiently and address issues that may impede progress. It is a small group of officials working at the centre of government to facilitate decision-making.”

According to a description by one of its senior advisers, the U.S. council, which was created within the Executive Office of the president, is conceived as a “tiger team,” or a group of specialists hired to solve a specific problem. It offers “concierge, white glove service” to get mining and fossil fuel projects approved fast, the advisor said.

It’s chaired by U.S. Interior Secretary Doug Burgum, who has close ties to oil and gas producers, and the team has been involved in promoting mining, natural gas and a pipeline in Alaska. The briefing note shows Hodgson was scheduled to meet with Burgum last October.

Six months after Trump’s council was formed, Carney launched the Major Projects Office with a mandate to “streamline and accelerate” regulatory approvals for “nation-building” projects. The office is backed by the Privy Council Office, the department that supports the prime minister and cabinet.

So far, the prime minister has referred five mining projects and two natural gas projects to the office, as well as others in nuclear, electricity, ports and roads. He put Dawn Farrell, the former CEO of the oil pipeline company Trans Mountain, in charge.

During a visit to an energy conference in Houston in March, Hodgson remarked on the closeness of his office’s relationship with Burgum, and said, “the U.S. wants to achieve energy dominance. We support you in that view.”

The Narwhal approached Hodgson after he gave a speech at a First Nations Major Projects Coalition conference in Toronto on April 30, to ask about the comparison his department made with Trump’s team. The minister, while walking through the conference and chatting with an attendee, twice avoided taking questions, saying he was too busy. Another official suggested contacting his office.

A spokesperson for Natural Resources Canada said the comparison between the Major Projects Office and the U.S. council “was intended as a high-level description of function — not a statement of equivalence in mandate, governance or approach.”

The department also noted Canada’s “distinct constitutional, legal and policy framework that reflects our values and obligations” and said Canada’s office is “not limited to a single industry or sector.”

Treaty 8 Grand Chief says comparisons between Canada and U.S. approaches to development should be ‘treated very carefully’

Carney has pitched the Major Projects Office as working “in partnership” with Indigenous Peoples. He held summits last year with First Nations, Inuit and Métis rights holders. The office’s Indigenous Advisory Council is meant to help guide its work.

Grand Chief Trevor Mercredi, of Treaty 8 First Nations of Alberta, sits on the Major Projects Office’s Indigenous Advisory Council. He reacted to the comparison by noting that Canada’s different constitutional framework, including the Crown’s obligations to First Nations, means “speed cannot come at the expense of Treaty Rights.”

“What I can say is that any comparison between the Major Projects Office and a U.S. energy permitting model has to be treated very carefully. Canada operates within a different constitutional framework,” Mercredi said, including Treaty Rights, land claims and the duty to consult. “The Crown’s obligations to First Nations cannot be treated as permitting issues or obstacles to be managed around.”

He said there is value in the Major Projects Office if it improves government transparency and coordination and ensures First Nations are meaningfully involved in decisions that affect their lands, waters and Treaty Rights.

“But if the purpose is to simply move projects faster by narrowing, bypassing or compressing Crown obligations, that would be a serious concern,” he said.

Mercredi said his role on the Indigenous Advisory Council does not replace direct consultation with rights-holding nations and doesn’t satisfy the Crown’s legal obligations.

For Treaty 8 nations, he said, the issue isn’t whether Canada can build major projects — it’s whether Canada will honour treaties, respect First Nations jurisdiction and ensure decisions are made with “proper consultation, accommodation, environmental protection and real participation by the nations whose territories are affected.”

Canada’s Bill C-5 faces strong opposition, and a lawsuit

The government passed the Building Canada Act, part of Bill C-5, in June 2025, cementing a process in law to name projects in the “national interest.”

It has seen strong opposition from some Indigenous communities, as well as public interest groups, who argue it paves the way for the government to circumvent oversight that’s meant to protect the environment, public health and scientific integrity.

The Quebec Environmental Law Centre has launched a legal action asking the courts to strike down the law. The group announced April 27 it had gathered 11 other organizations who seek to intervene in the lawsuit.

The law centre’s executive director Geneviève Paul, reacting to the documents from the natural resources department, said decisions made behind closed doors are not in the interest of Canadians.

“The government of Canada needs to act responsibly and defend our institutions, not follow authoritarian trends and copy the jurisdictions which are dismantling the protections we need to move forward safely,” she said.

Keith Stewart, senior energy strategist at Greenpeace Canada, said it was “telling” that the federal department itself was comparing the two offices.

“I think many Canadians who voted for an ‘elbows up’ agenda would be surprised to learn that our natural resources minister went to Houston [in March] to tell Americans that he wants to help the Trump administration achieve energy dominance, which is code for expanding fossil fuels at any cost,” Stewart said.

Updated on May 5, 2026, at 11:30 a.m. ET: This story has been updated to include a statement from Natural Resources Canada that was sent after the given deadline.

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Summary

• Ranchers in some parts of Alberta can earn six figures from oil and gas sites on public land they lease from the government for below-market value — and when companies don’t pay, taxpayers foot the bill.
• The system is legal, but has been criticized by the auditor general, who called on the province in 2015 to stop allowing “personal financial benefit” from leasing public land.
• An investigation by The Narwhal reveals that one of those ranchers is Alberta Finance Minister Nate Horner, whose family has a long history in politics — and in lobbying against reforms to the grazing lease system.

Alberta Finance Minister Nate Horner’s ranching business likely receives between $100,000 to $124,000 per year through contracts with oil and gas companies that operate on public land which he leases to graze his cattle, according to estimates compiled by The Narwhal. 

And when those oil and gas companies fail to pay their bills, taxpayers have been paying the finance minister on the delinquent companies’ behalf, The Narwhal has learned.

Data from the Land and Property Rights Tribunal, which pays landowners — and ranchers who lease government land — when companies fail to do so, shows Horner’s ranching business has received $87,246 in compensation from the province since 2021 for wells on his private property and on grazing leases, according to The Narwhal’s analysis. Of that, $47,200 was paid for oil and gas sites on his grazing leases — in other words, he’s receiving public money for oil and gas wells on public land. 

The payments to Horner’s ranching business are all legal under current Alberta legislation, but the ability of ranchers leasing land from the government to collect all of the oil and gas compensation was criticized by the auditor general in 2015.

Nate Horner Ranches Ltd., located east of Calgary, holds vast stretches of grazing leases — public land that is rented to ranchers for what critics say are bargain prices. Horner’s family has operated in the area, and leased land from the province, for generations. 

The family is also a political dynasty, counting MPs and MLAs — including both provincial and federal cabinet ministers — in its tree. His cousin, Doug Horner, is a former provincial finance minister.

In Alberta, oil and gas companies must compensate landowners for the adverse impacts of their activity. The province’s current rules also allow leaseholders to retain all such money companies pay to operate on those publicly owned grazing leases.

It’s a controversial framework that, in 2015, the auditor general said was allowing some ranchers to derive undue “personal financial benefit” off public land.

The Narwhal set out to understand the scope of the problem, focusing on three regions east of Calgary with many ranchers grazing their cattle on public land. The Narwhal’s analysis found taxpayers have footed the bill for millions of dollars in payments on behalf of oil and gas companies to ranchers leasing public land at below-market rates. 

And one of the recipients of those payments is the finance minister’s ranching business.

His press secretary, Marisa Warner, said Horner’s compensation is above board. 

“All of Minister Horner’s agricultural business holdings have been put in a blind trust since entering cabinet,” she said by email, adding the “minister’s assets, property and business holdings have all been properly disclosed, and placed in a management arrangement, approved by the ethics commissioner.”

Each oil and gas well brings in an estimated $1,856. Horner’s business has 67

The Narwhal estimated how much Minister Horner’s ranching business receives from oil and gas companies by looking at property maps that list both grazing leaseholders and oil and gas sites and counting the number of oil and gas sites on leases he holds. Nate Horner Ranches Ltd. had 67 sites.

That number was multiplied by $1,500, a per site figure cited by the auditor general in 2015 as an average compensation amount. By this calculation, Nate Horner Ranches Ltd. could receive an estimated $100,500 per year.

Figures from Land and Property Rights compensation decisions, however, show that Horner’s ranching business might receive a higher price. Based on the 21 claims he has filed since 2021 for unpaid compensation, the average cost per site is $1,856, meaning he could be earning as much as $124,386.

It’s unclear if Horner has any other stakes in operations owned by family members near his own holdings. The minister’s office did not respond to specific questions sent by The Narwhal. 

Warner directed questions about the government’s position on the current system to the Ministry of Environment and Protected Areas, which oversees grazing leases.

The minister of environment and protected areas office did not respond to a list of emailed questions.

The finance minister’s grandfather was among the loud advocates against reforming the system that benefits ranchers

The issue of oil and gas compensation for grazing leaseholders has been controversial for decades, and includes a failed attempt by the Ralph Klein government to cap payments. 

That legislation was passed quickly in 1999, but was never proclaimed into law after intense backlash from ranchers and advocacy organizations. Among them was the Alberta Grazing Leaseholders Association, which was led by Horner’s grandfather, Jack Horner, at the time.

The association formed to push back against the Klein government “directly attacking property rights of leaseholders.”

Those opposed to changing the system point out that while grazing leaseholders pay less than market price to use public land, the lease comes with responsibilities and costs. Ranchers using public land pay for all improvements and maintenance of the land, as well as paying property taxes.

“The leaseholder has purchased the right from the province to be the occupant of that land,” Lindsye Murfin, the manager for the Alberta Grazing Leaseholders Association and the general manager of the Western Stock Grower’s Assocation, said in an interview. “And with those rights come a lot of responsibilities.”

Her organizations argue against a cap on the amount of money a leaseholder can earn from oil and gas sites on their leases. As Murfin points out, the more wells there are in a grazing area, the more problems a rancher has to manage. 

The Land and Property Rights Tribunal payments are part of a grand bargain with Albertans. No one is allowed to deny access to an oil and gas company that wants to drill, and in exchange the government will cover compensation if a delinquent company stops paying. 

Those payments have exploded in recent years, as more and more companies walk away from their financial obligations — even as some continue to operate.

The total in 2024 was $30 million, which represents a 4,500 per cent increase in the amount of money the government is paying for these missed payments since 2010. The government says it works to recoup those costs from companies, but previous reporting from The Narwhal shows only a small fraction of tribunal payments, less than one per cent, is ever recovered.

Horner’s experience is a striking example of the impact of regulatory failure in the province.

Almost all of the tribunal payments to Nate Horner Ranches Ltd. cover unpaid leases by AlphaBow Energy, a company that was allowed to snap up thousands of wells it did not have the resources to manage or clean up.

Five years after the company was created through a complex series of transactions, the Alberta Energy Regulator suspended its licences. The regulator transferred supervision of the sites to the Orphan Well Association — a largely industry-funded organization that cleans up sites without a solvent owner.

This left thousands of wells without a viable owner. It also meant millions of taxpayer dollars were directed to landowners and leaseholders to cover unpaid compensation — Horner among them.

That’s just one example. The orphan well inventory increased more than 29 per cent in 2025, but the levy imposed on companies to cover those costs only increased by seven per cent this year.

In the past month, the orphan inventory nearly doubled with the transfer of wells from another troubled company, Long Run Exploration. Those wells are estimated to have added another $476 million in liabilities to the association’s expenses.

Methodology

The Narwhal’s Prairies reporter Drew Anderson and web developer Andrew Munroe created estimates for this story from data gathered from a public government database of decisions regarding compensation oil and gas companies are supposed to pay to landowners when they put infrastructure on their land. The database is called the Land and Property Rights Tribunal database and contains tens of thousands of records of rulings. Each ruling contains information on the oil and gas company that failed to pay its bill, the land or leaseholder to whom the debt was owed, the amount owed and more. It is an extensive database, with each individual ruling page containing data on company names and grazing leaseholders or landowners, the amount paid and whether or not the site is located on a grazing lease.

Information regarding well sites located on grazing leases was obtained by purchasing municipal land maps on an app named iHunter, which provides the names of grazing leaseholders, contact information and outlines oil and gas sites on those lands.

To estimate the average compensation for a site on Finance Minister Nate Horner’s land, each tribunal decision was cross-referenced with the number of years for which compensation was owed, and the number of sites tied to each claim. The number of sites was retrieved from albertawellfinder.com and based on the licence number attached to the tribunal decision.

Updated on Apr. 30, 2026, at 10:33 a.m. MT: This story has been updated to reflect that Lindsye Murfin is both the general manager of the Western Stock Growers’ Association as well as the manager of the Alberta Grazing Leaseholders Association.

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Again and again last year, Canadian oil and gas executives and lobby groups made public overtures to Prime Minister Mark Carney to “unwind the past decade” of environmental and energy policy in order to “unlock” fossil fuel industry growth.

After eight months in office, the Carney government has signalled major policy changes through its Building Canada Act, its Major Projects Office, its federal budget and its pipeline-focused memorandum of understanding with Alberta. All of this brings federal policy at least partially in line with the list of proposals made by these industry representatives. 

One fossil fuel company spokesperson told The Narwhal they’re “pleased to see the progress that has been made.”

“These are all steps in the right direction of building a stronger Canadian economy and an acknowledgement of the critical importance of energy and energy infrastructure to our country’s competitiveness and future,” Gina Sutherland, senior advisor, corporate communications and media relations for Calgary-based Enbridge, wrote in an email response.

The pipeline and utility company’s president and CEO, Greg Ebel, is an original signatory to the industry’s vision, laid out in March in an open letter titled “Build Canada Now.” Updated versions were published in April and September as more executives and lobby groups signed on and the group sharpened its requests.

Eight of the executives who signed the September letter, largely representing companies in the oilsands, had also planned to attend a meeting with Carney on June 1, 2025, to discuss “partnerships,” according to an internal government list of confirmed participants released to The Narwhal through access to information law. Government officials suggested that during his opening remarks, Carney could relay his “intention to use the letter to guide the discussion and delve into the positions they put forward,” according to briefing notes for the prime minister for that day.

The government says its policy changes are part of a broader plan to fight climate change, support workers and boost economic growth, especially in the face of the United States throwing around tariffs and threatening worse. 

Canadians expect their government to “win” the trade war, Energy and Natural Resources Minister Tim Hodgson said Dec. 9 on Parliament Hill. “To do that, we need cards in our hands. We have some fantastic cards: our energy and natural resources.”

Which might be true. It’s also true that the fossil fuel industry appears to have been very successful at arguing its case, with its wish list ticked off one by one.

Emilia Belliveau, energy transition program manager at advocacy organization Environmental Defence, has researched the fossil fuel industry’s techniques for garnering public support.

“We’re seeing an incredible alignment of government interests and fossil fuel industry interests,” she said in an interview.

Where Canada and the oil and gas industry align

The September version of “Build Canada Now” boasts 95 signatories including major lobby groups like the Canadian Association of Petroleum Producers. In that version, the group called for a federal law that bans crude oil tankers from the north coast of British Columbia to be completely repealed.

That would set up a major confrontation with Coastal First Nations, whose president Marilyn Slett made it clear to Carney on Jan. 13 at a meeting in Prince Rupert, B.C., that the oil tanker moratorium must be kept in place. 

The Carney government has not repealed the tanker ban, but its memorandum of understanding with Alberta commits to changing the ban if necessary to get a new pipeline built.

Another law the industry executives wanted to see vanish is the federal carbon pricing regime. While it is still in place, the federal government released a “climate competitiveness strategy” in November that commits to negotiating new carbon pricing arrangements with the provinces. The deal it signed with Alberta also permits the province significant flexibility over how its carbon rules are applied to specific sectors like oil and gas and electricity.

The executives also asked for an overhaul of a federal law that governs environmental assessments, and the Building Canada Act strips out part of that assessment process for projects the government deems in the “national interest.” 

They wanted to kill off a proposed emissions cap on the oil and gas sector, and the Alberta deal says Canada is happy with other plans to reduce emissions and won’t implement it. 

A central goal of the government’s Major Projects Office is to shrink approval timelines for projects — another item on the wish list.

Finally, the industry representatives asked for more loan guarantees for Indigenous communities. A loan guarantee is when the government agrees to repay any debt taken on by Indigenous communities that buy ownership stakes in oil and gas projects, should they be unable to repay it themselves. 

Making it financially easier for Indigenous communities to own portions of oil and gas projects is seen as addressing historic financial barriers to Indigenous economic participation — but it can also be seen as useful for overcoming opposition to fossil fuel expansion.

The federal budget reiterates a commitment to doubling its Indigenous loan guarantee program, and directs the Major Projects Office to help with financing.

The executives wrote in the Build Canada Now letter that they have “consistently advocated for the changes required to unwind the past decade of increasing policy complexity and uncertainty that led to delayed investments, lost opportunities and a competitive disadvantage on the global energy stage.”

Federal disclosure records show industry lobbyists focused on at least two aspects of the letter, carbon pricing and the emissions cap, as well as other elements of the federal climate plan during the two months surrounding the executives’ June 1 meeting with Carney.

Sutherland, at Enbridge, said the government’s proposed policy changes will now need to be “fully implemented” for large energy projects to move forward.

The Narwhal reached out to several other signatories of the Build Canada Now letter, including the Canadian Association of Petroleum Producers and the Pathways Alliance of oilsands companies, but none responded by publication time.

Joe Calnan, vice-president of energy and Calgary operations at the Canadian Global Affairs Institute, noted many of the industry’s proposals had been floated at one time or another, in particular by Alberta Premier Danielle Smith — like killing the tanker ban, altering carbon pricing and overhauling the environmental assessment law. Alberta’s oil and gas industry accounts for 84 per cent of total Canadian oil production.

Smith’s pressure on these issues “did kind of make these kinds of demands from industry more tangible and more clear as to what they’re after,” Calnan said. 

Large, publicly traded corporations also have a fiduciary duty to their shareholders to make money, Calnan added, and so their interests lie in ensuring increased production of oil and gas. A province like Alberta, which takes in royalties when resources are developed, also has an interest in increasing fossil fuel production.

The government of former prime minister Justin Trudeau had portrayed many of the policies changed by Carney as necessary to deliver crucial carbon pollution cuts, and to properly consider the impact of oil and gas projects on the environment, Indigenous Peoples’ constitutional rights and the long-term well-being of Canadians, whose lives are continually disrupted by wildfires, floods and other extreme weather made worse by climate change. The emissions cap, for example, was supposed to hold the industry at its word to take steps to decarbonize its production.

In November, former Trudeau-era environment minister Steven Guilbeault quit his Cabinet post following the Alberta deal’s unveiling, saying several elements of the climate plan he had worked on “have been, or are about to be, dismantled.” 

Belliveau, at Environmental Defence, said it was frustrating to watch Carney and Smith discuss a “grand bargain” over oil and gas development that purported to also plan for emissions reductions, given that similar rhetoric had been deployed seven years ago when Trudeau framed the expansion of the Trans Mountain pipeline as a “trade-off” for getting Alberta to sign on to climate action. 

“The last so-called grand bargain failed to produce the results that it promised, and the result that we need to actually address climate change,” Belliveau said. “Prime Minister Carney should be learning from past Liberal government mistakes.”

Pitfalls of Canada’s past climate policies

The latest government progress report on Canada’s climate plan shows the country is “significantly off track” to meeting its emissions reduction target for 2030 and 2035, according to the Canadian Climate Institute.

Carney’s environmental policy changes were also unveiled during a year when Canada faced its second-worst wildfire season, second-worst year for ice loss and major heat waves, the severity and frequency of all of which are tied to climate change caused by greenhouse gas emissions, of which the global oil and gas industry is the largest contributor.

Belliveau said the government should be doing more to help people cut emissions — and, over time, their bills — by providing subsidies and access for clean technologies like heat pumps, instead of doubling down on fossil fuels.

The Narwhal asked the office of Hodgson, the energy minister, about how closely the government’s policies align with the requests in the letter from oil and gas executives, and whether the changes were made to fulfill those requests. The Narwhal also asked whether the government agreed with the assertion in the Build Canada Now letter about the need to “unwind the past decade.” 

Hodgson’s office directed questions to Environment and Climate Change Canada Minister Julie Dabrusin. Her press secretary Keean Nembhard said the government is committed to working with Alberta and is relying on industrial carbon pricing to cut pollution going forward. He acknowledged the “economies of tomorrow” will be “clean, low-carbon and resilient” and that “Canada can — and must — lead the way” in addressing climate change. 

“We’re creating the conditions for world-leading clean technology to thrive — by investing in Canadian innovation, scaling homegrown solutions and positioning Canadian companies to lead in the global race to net-zero,” he said.

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The Ontario government is not considering changing its law that prevents municipalities from charging Enbridge Gas for building pipelines on public land, despite calls to do so.

“I’m not aware of any contemplation of amending the current policy,” Ontario Energy Minister Stephen Lecce told reporters during a Jan. 7 press conference in Toronto.

Last November, Waterloo Region became the second Ontario municipality, after Guelph, to resist renewing these agreements. Doing so would have meant locking in for another two decades of offering free space to pipelines that carry natural gas, which is largely made up of methane, a potent greenhouse gas that traps heat in the atmosphere.

Through longstanding regulation, the province prohibits municipalities from charging for the right of way used for natural gas pipelines. 

The law requires municipalities to enter into franchise agreements with natural gas providers, allowing them to build pipelines under roadways and surrounding lands without charge. Enbridge Gas has these agreements with more than 340 municipalities, the details of which are negotiated through the Ontario Energy Board, a non-partisan regulator mandated to uphold provincial law.

These are unique arrangements in Canada; in provinces including British Columbia and Alberta, municipalities can charge gas companies that want to build pipelines on their land. 

Along with Waterloo Region and Guelph, both Ottawa and Toronto have argued changes to these agreements would give local councils a much-needed source of revenue, along with the ability to move away from fossil fuels and reduce emissions in their cities. 

“Were the province to amend its regulation and city council decided to apply a land-based charge to Enbridge’s use of the right of way, it could generate between $73 million and $293 million in total annual revenue,” according to City of Toronto staff, based on how such charges are applied elsewhere.

As of December 2025, neither Guelph nor Waterloo had received an official response from the province. 

In his Jan. 7 response to a question from The Narwhal about potential changes to the policy, Lecce deferred to the Ontario Energy Board. The board has announced a full review of these agreements in spring 2026 — the first since 1999. That will play out at the board alongside individual cases about Guelph and Waterloo Region’s agreements with Enbridge Gas. 

“The Ontario Energy Board is an independent adjudicator,” Lecce said. “They make sure that any cost that is borne on the ratepayer is prudent. … I have confidence in the [board].”

A spokesperson for Enbridge Gas previously told The Narwhal the company would not comment on the upcoming hearings, but that the board “reviews and approves every agreement to make sure it’s fair and in the public interest.”

Regardless of the board’s decision, the government would have to amend the Municipal Act to allow municipalities to charge gas utilities for pipeline right of way going forward. Ontario Green Party Leader Mike Schreiner, who is the MPP for Guelph, has twice tabled a private member’s bill proposing this amendment, with the latest iteration awaiting second reading. 

The upcoming Ontario Energy Board hearings between Enbridge Gas and the municipalities come in the wake of the board’s 2023 decision, when it ordered the company to stop passing down the cost of new gas hookups to homeowners on their bills, arguing cleaner and more economical alternatives exist. In early 2024, the Ford government made the unprecedented decision to overrule the regulator’s decision. After that, the government created a new energy policy that keeps natural gas, a fossil fuel, in Ontario’s supply mix until at least 2050. 

When asked if the government would accept the board’s decision on franchise agreements, Lecce said, “We want to seek alignments with the [board].” 

“We respect their independence, and obviously, I’m not going to entertain hypotheticals that may or may not come down the pipe in a year or two or three,” he added. “Our message to the [Ontario Energy Board] … is we want to focus on the economy, keep costs down.”

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The Alberta Energy Regulator appears to have ignored a direct ministerial order meant to protect rural municipalities and prevent struggling oil and gas companies from obtaining new licences, data obtained by The Narwhal reveals.

At issue is a transfer of 170 oil and gas wells, 30 related facilities and 47 pipeline licences to Calgary-based MAGA Energy in September 2024 despite the company owing unpaid taxes to Sturgeon County, just north of Edmonton. 

A ministerial order, first signed in 2023, prevents the regulator from approving the transfer of licences to any company owing more than $20,000 in unpaid taxes unless there’s a payment plan in place. 

Data obtained by The Narwhal shows MAGA Energy owed more than $200,000 in taxes to Sturgeon County at the time of the transfer — more than 10 times the limit. The county told The Narwhal MAGA Energy violated an agreement to repay a portion of those taxes owing from 2023, and that it alerted the regulator in March 2024 that MAGA Energy was non-compliant.

The regulator touts its power to approve licence transfers as a primary tool for weeding out bad actors in the oilpatch and says indications of financial difficulties, including tax arrears, will trigger a deep dive into a company seeking licences. 

Critics say the MAGA transfer is just one example of a far bigger problem.

“Every time I hear the Alberta Energy Regulator say, ‘This transfer process is the backbone of our liability management system,’ I mean, I almost throw up my breakfast,” Shaun Fluker says. A law professor and head of public law clinic at the University of Calgary, Fluker’s “seen nothing to back up that statement, and what you uncovered here is really just a very quantifiable illustration of that.”

Alberta Energy Regulator in ‘direct violation’ of its rules: lawyer

The Alberta Energy Regulator refused to answer questions regarding the MAGA transfer and the figures obtained by The Narwhal. 

The office of Alberta’s energy minister, Brian Jean, did not respond to emailed questions, neither did MAGA Energy.

In response to earlier questions for a previous story about MAGA Energy, it said the company “met the requirements to proceed” with the transfer and that “the evidence MAGA provided is not public information; it is between MAGA and the municipality or municipalities in which the arrears existed at that time.”

When emailed a series of questions and asked how the company could meet the requirements to proceed with the transfer given the evidence from Sturgeon County, the regulator declined to answer. 

“Please refer to previous statements, we have no further statements on this topic,” read an email signed “AER media.”

Fluker, who has represented landowners in court over oil and gas licences and has extensive experience researching energy regulations in Alberta, says the lack of an agreement over its tax arrears with Sturgeon County would represent a “direct violation” of the minister’s order.

He says even if, hypothetically, MAGA Energy presented false information to the regulator — the “evidence” cited in the regulator’s response to questions — the regulator would still bear the blame. 

“Even if MAGA did lie to the Alberta Energy Regulator, they had the information from the municipality,” he says. 

“They have to be better than accepting false claims from applicants or transferors. … I think we legitimately expect them to be able to overcome that. That’s the whole point of being a regulatory agency.”

After publication, Fluker added the following additional statement: He has seen no evidence that MAGA Energy lied to the Alberta Energy Regulator but that it seems from what information is now publicly available that either MAGA submitted incomplete or inaccurate information to the regulator — or the regulator failed to act on accurate information provided by MAGA in relation to its unpaid municipal taxes. “Either way, the fact that the Alberta Energy Regulatory refuses to disclose evidence submitted by MAGA to clarify the situation is highly problematic and leads to discussions in hypotheticals and speculation,” he wrote in an email.

Fluker is skeptical the regulator undertakes the due diligence it professes when it comes to regulatory oversight and licensee evaluations.

‘It is an absolute free-for-all’ says Sturgeon County of regulatory failure

Obtaining tax information for oil and gas companies is a difficult, and expensive, task. Municipalities do not openly share details on which companies are in arrears and how much they owe. 

Sturgeon County did admit MAGA Energy owed more than the ministerial order allowed. It previously told The Narwhal that the county alerted the regulator that the company was non-compliant with its obligations. But to determine the exact amounts required a trip to the county — as tax data can only be accessed by visiting the physical office — and paying the $1,000 required to release the data. 

That data from county tax rolls shows MAGA Energy owed just over $100,000 in taxes and penalties for 2023, an additional $90,000 in 2024 and $116,000 more in 2025. 

But Sturgeon County said the figure it reported to the regulator on March 15, 2024, was slightly higher, at $171,000 owing. A spokesperson confirmed MAGA Energy breached its agreement with the county in February 2024. 

The county’s openness is in contrast to municipalities that are reluctant to provide even basic information. Many of those other counties are smaller and more dependent on oil and gas producers. 

“For us, this particular company not paying its taxes is not going to break us,” Sturgeon County mayor Alanna Hnatiw says.

Still, it is a pressing issue across the province and has a significant impact on the ability of smaller counties to pay for services such as roads and wastewater treatment, Hnatiw says, adding it undermines faith in the government, regulator and industry. 

“If we can’t have trust that we know how to make regulations that serve and protect people, and uphold those regulations, then it is an absolute free-for-all,” she says. “And I don’t think any Albertan is really comfortable, or any Canadian for that matter, is comfortable with the idea of a free-for-all in the energy sector or in any other sector.”

Hnatiw is a strong supporter of the oil and gas industry and believes the vast majority of companies follow the rules and act responsibly, but she says the regulator, and the government which gives it direction, have allowed problem companies to act with impunity.

“The Alberta Energy Regulator has to get serious about how to deal with these businesses, because they are running without consequence, and they know that,” she says. 

“These companies do know how to thread the needle right enough to keep running without paying their way.”

In the specific case of licence transfers, Hnatiw questions why there is a process for alerting the regulator to delinquencies if that information is going to be ignored.

Across Alberta, hundreds of millions of dollars in unpaid taxes from oil and gas companies

MAGA Energy now owes more than $300,000 to Sturgeon County as 2025 comes to close, but it’s just one of hundreds of oil and gas companies across the province that are impacting the ability of rural municipalities to operate. 

Across the province, companies owe more than $254 million in unpaid taxes and municipalities have written off an additional $200 million, money that will never be recovered. 

The Rural Municipalities of Alberta says $100 million of the remaining taxes are owed by 201 companies that are still operating.

Hnatiw says that’s particularly egregious. 

“I think there’s a difference if you have a company that is defunct and is basically in a period of stasis, than somebody who is still using your roads, using your infrastructure and requiring the maintenance to be able to deal with their wear and tear on roads,” she says.

She also takes issue with a provincial government that doesn’t appear to be taking action while downloading the consequences to municipalities. 

At the recent Rural Municipalities of Alberta convention, she says Alberta Premier Danielle Smith told attendees that those millions in unpaid taxes are unlikely to ever be collected. (Smith’s office did not respond to a request for comment about this by publication time.)

“To hear that and to not hear the next sentence about what we’re doing to shut down these companies doesn’t give me a lot of confidence that these companies are going to see any consequences,” she says.

— With files from Kelsie Johnston

Updated on Dec. 11, 2025, at 2:08 p.m MT: This story has been updated to include an additional statement from Shaun Fluker.

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