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.

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.

What a week. Amidst the blur of World Cup shenanigans and Canada Day festivities, politicians dropped not one, not two, but three massive pipeline announcements. 

First, there was the multibillion-dollar federal commitment for infrastructure projects in B.C. What does this have to do with pipelines, you ask? Well, the agreement also included a promise to maintain the federal oil tanker ban off B.C.’s North Coast and $10 billion to upgrade the Roberts Bank export terminal (that’s the huge shipping terminal you can see from BC Ferries as you approach Tsawwassen, FYI). 

That brings us to the second announcement, which came just a few hours later when Prime Minister Mark Carney and Alberta Premier Danielle Smith announced a plan for a southern route for a new oil pipeline to the West Coast that would largely follow the right-of-way for the Trans Mountain pipeline, except — surprise, surprise! — it would end at Roberts Bank. This theoretical pipeline would be planned and built by the federally owned Trans Mountain Corp., with Pembina Pipeline Corp. taking a 10 per cent stake in construction. Oh, and it would cost between $35 billion and $44 billion (mostly in taxpayer money).

As if that wasn’t enough to process, on Monday Ontario Premier Doug Ford and Smith proposed another pipeline called Northern Shield, which would take oilsands bitumen to refineries in Sarnia, Ont. There’s also no private backer for this pipeline and, notably, no formal federal support. The chief of Aamjiwnaang First Nation, meanwhile, says the nation hasn’t been consulted on the proposal thus far and notes it’s still in the midst of a benzene crisis and dealing with the fallout of a March 2026 pipeline spill.

The headlines have been coming so fast and furious, it’s been tough to keep up. I spent the week scouring the internet, trying to get my head around it all. Some of the most insightful commentary I came across was from Amy Janzwood, an assistant professor in political science and environment at McGill University — so I called her up to pick her brain on, well, all of it. 

This interview has been edited and condensed for length and clarity.

What have you noticed about the pipeline discussion in the media over the last week? 

All the media coverage I saw has been stenography, basically. Just regurgitating all of the talking points of [Minister of Energy and Natural Resources Tim] Hodgson, Carney and Smith. It’s been extremely uncritical coverage. The kind of making of a pipeline out of literally nothing other than taxpayer dollars has been quite dizzying and shocking to see. 

The questions I was asked a year ago about pipeline politics are very different than the questions I get now. Before I’d get asked: “What’s the prospect of another major oil pipeline? Is this a political fantasy?” But now there’s a slippage into engaging on the terms of the Smith government. The lack of context I’ve seen in the reporting on this is in part because of the firehose of announcements, and media outlets are just not able to keep up.

You have noted before that legacy media often uncritically repeat the narratives of the oil industry. It sounds like you’re still seeing that? Are any particular examples coming to mind? 

Hodgson has basically become the voice of the industry and I see that repeated verbatim, without any kind of interrogation. One very clear example I see over and over again is the profitability narrative around the Trans Mountain pipeline when we know this is actually not a profitable pipeline. You could argue there are good reasons to have it and we can have that debate, but [federal politicians] like to say that this is a profitable pipeline, which is straight up not true, so that’s one example of things that I see kind of repeated very uncritically.

Given that it’s not a profitable pipeline, what are the real reasons you think we’re seeing such broad political support for it in this moment?

There has been incredibly powerful messaging from the Carney government that we can have it all. We’ve seen this misconstrual of economic anxiety, sort of pinned on the hopes of another pipeline, which couldn’t be further from the reality. 

Pipelines have become kind of a stand-in for the future of oil and gas. It’s become a stand-in for a lot of really difficult conversations.

Canadians are still broadly supportive of climate action and renewable energy, but they’re also more supportive of pipelines now than they have been for at least the last decade. What do you make of that contradiction? 

As political scientists, we’ve long known that public opinion can largely be shaped by our political elites. I’m not surprised when I hear things from our prime minister and minister of natural resources around the need to build more pipelines, that there is this slippage or confusion that this is going to reduce our reliance in any way on the U.S. If you’re not following this closely, then that sounds great, if you’re being told this is what we need to keep Canada prosperous and strong. 

But as someone who has studied pipelines for over 10 years, those are promises new pipelines will not be able to deliver on. I think the public has largely forgotten the cost and divisiveness about Energy East, about Northern Gateway, about Trans Mountain. Unless you’re directly affected and witnessing and experiencing the impacts of these projects, those costs to you, those environmental risks are not salient. It has long been difficult for folks to make that connection when we’re told this is necessary for our economy, and when the economic benefits are as overstated as they often are.

Canadians are repeatedly told that pipelines are what’s needed to keep Canada prosperous and strong. What are political leaders misrepresenting when they say that? 

Fundamentally when we’re talking about major new pipelines, you’re going to need significant greenfield oilsands expansion to fill it. [A greenfield project is a new project built on undeveloped land.] We’ve seen the economics of the oilsands have not been trending towards that for the last several years to decades. Investors in the oilsands were really pressuring companies to deliver on their dividends. There was not an appetite for massive new expansions; it was not economic and it still is not. It would actually harm the industry if they can’t fill the pipeline. 

If we’re now talking about a hypothetical West Coast pipeline, the volatility and the reliance on global oil prices and very uncertain demand … there is not a long-term case to be made for increasing oil expansion to the degree that would be required for a major new pipeline.

This is not economic for the industry, so this will be taxpayer-funded. And there’s no certainty about demand for this hypothetical oil that the industry does not seem willing to produce, although Smith has alluded to doing whatever she can to stimulate further oilsands production with additional provincial support. 

It’s quite misleading to suggest we would need a new pipeline to diversify away from the U.S. I do think we do need to have important conversations about how to become more resilient in light of having the Trump administration. But spending billions of dollars for a pipeline that we don’t think the industry can fill is not the way to do it. 

Politicians also increasingly claim that Canada can indefinitely expand oil and gas production while meeting our climate commitments. Is that actually possible?

The short answer is no. This myth was alive and well under the Trudeau government. The Trudeau government really pioneered this narrative that we can have Trans Mountain and the oil expansion that comes with it and meet our climate targets and use the money from Trans Mountain to pay for the clean energy transition.

The latest iteration of this argument is this promise of carbon capture and storage. My take is that this is something the industry has never really been serious about doing.

Since Pathways Alliance [now called Oil Sands Alliance] announced its carbon capture and storage project in 2022, we’ve seen absolutely no significant investment of any kind in this project. And we know that they’ve just quietly stepped back from the amount of emissions reductions they’re promising.

It’s been quite troubling to see the Carney government so unquestioningly provide this narrative that we can have decarbonized oil — which is, of course, a contradiction.

You have described expanding fossil fuel exports as like saving for retirement by doubling down at the casino. Can you explain why that is?

Let’s not forget that oil and gas is a relatively small part of Canada’s GDP … but looking at the media coverage, you would not know that. 

The conversation we’re having right now is a federal government that has continuously found new and ever-creative ways to subsidize fossil fuel expansions, whether that’s LNG [liquefied natural gas], oilsands or carbon capture and storage, and telling the public that this is necessary. 

Let’s set aside LNG for now (the economics of LNG are a bit different), but about oil specifically, this is an industry that’s had record profits that’s been unwilling to pay for its own pollution — it is a cost the industry has very successfully avoided, whether that’s orphan wells and cleanup or carbon. 

We’re told we need to double down and it’s necessary for economic prosperity. But what we’re seeing is the bill that’s racking up that taxpayers are on the hook for — when there’s an industry that can very well pay for it, and is unwilling to because they know they have a government that will backstop it. They now have a government that will buy a pipeline and that now has a state-owned pipeline company that is promising to be a backer for another new pipeline, which honestly, if you had told me that even 12 months ago, I would not believe you. It is absolutely mind-boggling. 

The Narwhal is going to be following all of these issues closely. If you have thoughts or a story tip email editor@thenarwhal.ca

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Summary

• In early May, 49 birds were found in tailings ponds at Imperial Oil’s Kearl oilsands mine. Later in the month, 95 birds were found dead at the Suncor Firebag site.
• The Alberta government’s oilsands mine water steering committee made recommendations in 2025 to speed up creating standards for treating and releasing tailings, which are generated as a by-product of the oil extraction process.
• Treating and releasing tailings into rivers has been criticized by downstream First Nations, including Mikisew Cree First Nation.

At Jean L’Hommecourt’s cabin north of Fort McMurray, the birdsong is frequently interrupted by the hollow booming of a cannon, a stark reminder of the proximity of the oilsands in an otherwise tranquil setting of muskeg and boreal forest. 

L’Hommecourt got another reminder of her toxic neighbour last month. Announcements about oiled birds in tailings ponds have L’Hommecourt, who is from Fort McKay First Nation, and other community members thinking about the 1.4 billion cubic litres of tailings ponds upstream of their water supply and food sources in northern Alberta. 

The booming cannons heard from L’Hommecourt’s cabin are an attempt to scare away birds that might otherwise land on tailings ponds and perish — but they don’t always work. Fort McKay First Nation notified members that 49 birds were found in tailings ponds at Imperial Oil’s Kearl oilsands mine between May 1 and 8. “Detection and deterrent systems, including the use of drones for hazing, have remained active during this spring migration period,” the notice to members said. The Narwhal reached out to Imperial Oil to ask whether the birds were found deceased, or if any birds had been retrieved and rehabilitated, but the company did not respond to multiple requests for comment. 

“It’s claiming the lives of our waterfowl. That is our traditional foods,” L’Hommecourt, who has been an advocate for clean drinking water, said.  

L’Hommecourt’s cabin is 13 kilometres away from the Kearl mine site and she no longer harvests plants or berries from the area. She is concerned about the effects of air pollution, though she and her husband will still harvest moose, as they live on a diet of traditional foods as much as possible. 

95 more birds found dead at Suncor site in May

Living downstream of tailings ponds has long been a concern for residents in and around Fort McKay, which is in the middle of much oilsands mining activity, as well as in Fort Chipewyan, a remote fly-in community accessible only by plane or winter road that is downstream of the oilsands. Fort Chipewyan has three Indigenous groups: Athabasca Chipewyan First Nation, the Fort Chipewyan Métis and the Mikisew Cree.

On May 24, Mikisew Cree First Nation also notified members that birds were found dead at one of Suncor’s oilsands sites, known as the Suncor Firebag site. 

“After a thorough search of the area, a total of 95 birds have been found deceased in the north-east quadrant of the site, not near any bodies of water,” a spokesperson for Suncor said in a statement.

Birds land on tailings ponds to rest as they migrate. Lights from the work camps, changes in temperature and even a change in headwinds can mean the migrating birds need these pit stops.

When a bird lands in a tailings pond they can become coated with oil, which can reduce the waterproofing in their feathers and can cause them to sink. Birds that can get out of the tailings pond and have the oil removed may have reduced insulation and other negative effects that can lead to hypothermia even from small amounts of oil, according to a federal government report on annual bird mortality in the oilsands.

The Alberta Energy Regulator said it was conducting an inspection of the Firebag site for more information about the dead birds. 

A spokesperson for the regulator said by email that oilsands operators typically use a number of deterrents to stop birds or other wildlife from ending up in tailings ponds, including propane-fired cannons and loudspeakers, scarecrows, human effigies and kites shaped like hawks.

The Narwhal previously reported on an unreleased internal document from the Alberta Energy Regulator in 2021 that showed an “emphasis on the appearance of sophisticated bird protection over data that demonstrate it.”

L’Hommecourt said she is upset that even though there is ample time to plan new deterrents, communities are still receiving notifications about oiled birds and bird deaths. 

Suncor added in a statement that it has a monitoring and mitigation program to prevent its sites from harming wildlife. The cause of death for the birds is currently unknown. 

Bird deaths continue as Alberta plans a new treat-and-release approach to tailings

The announcements have spurred further concern about pollution issues downstream of the oilsands. Mikisew Cree First Nation Chief Billy-Joe Tuccaro went to Ottawa in November to call on the federal government to manage tailings ponds and other industrial waste in a way that protects nearby communities like Fort Chipewyan, where he said he doesn’t feel Indigenous sovereignty or community concerns about water are being taken seriously. 

“So, what they’re saying is that it’s safe. Well, if it’s so safe, build a pipeline, put it right by the [legislature] in Edmonton. The premier can drink it first, then send another pipeline to Calgary, then the Bow, they can drink it as well, those corporate people, and then build one, go to the east, and then Carney could drink it too,” he told The Narwhal. 

“And then they could be the science experiments, the subjects, because we’re tired of it.”

The Alberta government’s oilsands mine water steering committee made recommendations in 2025 to speed up creating standards for treating and releasing the water generated as a by-product of the oil extraction process.

The liquid is a mixture of residual bitumen, heavy metals, clay and sand. Studies show that the “oilsands process-affected water,” as it is called in industry, also contains a toxic slurry of naphthenic acids, volatile organic compounds and polycyclic aromatic hydrocarbons. These can cause health effects including narcosis (cell poisoning) and disrupt the endocrine system, which can cause issues with diabetes, fertility, thyroid malfunction and increased cancer risk.

Tuccaro said there have not been enough studies into the cumulative effects of oilsands mining. While the focus on water safety tends to be on drinking water from the taps, he added there is also an effect from consuming traditional foods such as berries and fish from the area. 

All three Indigenous communities in the Fort Chipewyan area — the Mikisew Cree, the Athabasca Chipewyan First Nation and the Fort Chipewyan Métis — have expressed concerns about the Alberta government’s plans to treat and release tailings pond water. 

Tany Yao, the MLA for the area, did not respond to a media request about the birds in the tailings ponds nor about the Fort Chipewyan residents’ concerns about the plans to eventually treat and release tailings pond water.

Updated June 17, 2026, at 6:43 a.m. MT: Due to an editing error, a previous version of the summary at the top of this article stated all 49 birds found in tailings ponds at Imperial Oil’s Kearl oilsands mine had died. In fact, the company did not respond to questions about whether the birds were confirmed dead, as the article states. The summary also stated birds at the Suncor site were found dead in tailings ponds when the company said they were not found in water, as the article says.

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Summary

• With demand for electricity rising fast, BC Hydro says it needs natural gas power plants to keep operating to ensure the province has enough power.
• Island Generation, a natural gas plant in Campbell River, B.C., was supposed to be decommissioned but BC Hydro is now seeking to renew its contract as the province needs the power. 
• Energy Minister Adrian Dix said Island Generation is facing supply issues due to the Squamish-based Woodfibre LNG project. As the project is not yet operational, Dix’s comments have confused and surprised some politicians and experts.

When a heat wave hits Vancouver Island, residents turn up their air conditioning, flick on fans or adjust their heat pumps. Demand for electricity spikes. That’s also true during cold snaps and long, dark winter nights when more electricity is needed to keep homes lit and warm.

It’s on those days of extreme electricity demand that a Campbell River power plant fuelled by natural gas is most likely to fire up. Island Generation, owned by Capital Power, is one of a handful of facilities in B.C. that use natural gas to produce electricity. It’s what is known as a peaker plant, mostly called on to generate power at times of peak demand.

With a capacity of 275 megawatts, Island Generation can create enough electricity to power about 125,000 homes. It accounts for about one-quarter of all the electricity that can be produced on Vancouver Island. Only about 40 per cent of the electricity used on the island is generated locally. The rest comes from the mainland, transmitted via cables laid across the bed of the Salish Sea.

Over the past five years, Island Generation has operated an average of 15 days per year, according to Adrian Dix, B.C.’s minister of energy and climate solutions.

But, the facility has been having trouble getting the gas it needs to generate electricity at critical times, Dix told members of the B.C. Conservative caucus on April 23. He said the supposed natural gas supply issue is connected to liquefied natural gas (LNG) production. 

“The reason why the supply of gas is affected is that gas is going to a project called Woodfibre LNG in Squamish. That has been the issue between ourselves and Capital Power,” he said. 

Dix’s statement surprised and puzzled the politicians and experts The Narwhal spoke to. Woodfibre LNG is still under construction until at least next year. Until then, there’s no obvious reason the Squamish facility would be using gas that would otherwise go to Island Generation. 

But questions to the Energy Ministry, Island Generation and Woodfibre LNG mostly went unanswered. None provided information needed to clarify the situation with Island Generation’s gas supply.

“Woodfibre LNG will be purchasing gas in the future once the facility is operational,” a spokesperson for the facility said in response to multiple emails and questions, an answer that does not directly address whether the facility is currently buying natural gas, as the minister implied.

The Energy Ministry did not respond to The Narwhal’s request for an interview with Dix or to specific questions about the ministry’s knowledge about Island Generation’s gas supply or its efforts to ensure the facility will be able to get the gas it needs to operate.

Green Party MLA Jeremy Valeriote, who represents the Vancouver-Sea to Sky riding where Woodfibre LNG is located, told The Narwhal he has not been able to clarify Dix’s comments.

“I’m just flagging for the public that it’s been hard for either of us to get any public information on this,” Valeriote said.

‘Where would that extra energy come from?’

BC Hydro’s contract with Capital Power was set to end in October 2026, but it recently applied to the BC Utilities Commission for a new agreement. The application mentions both Island Generation and the McMahon Cogeneration facility in Taylor, B.C., near the heart of the province’s oil and gas industry. The two gas-fired plants could help BC Hydro meet about 80 per cent of a 500-megawatt electricity shortfall it forecasts will materialize by 2030.

Demand for electricity has been rising rapidly in B.C., driven partly by large industrial customers such as LNG terminals and mining operations. BC Hydro has been under pressure to find efficiencies in its system and bring on new generating capacity with an emphasis on renewable sources such as wind and solar.

Meanwhile, the provincial government has been working to usher in an LNG boom, which could put pressure on the electrical grid and increase competition for natural gas.

Valeriote noted BC Hydro is supposed to be phasing out fossil fuel electricity generation, not seeking new contracts with gas-fired plants.

“It’s pretty concerning when we talk about firing up what should have been a decommissioned gas plant on the island that may not even have gas … in those critical, peak times,” he said.

BC Hydro’s submission to the utilities commission argues the Clean Energy Act, which requires it to generate and purchase enough energy to meet demand, trumps the regulations regarding phasing out fossil fuels. 

B.C. Conservative MLA Larry Neufeld wants to know what would happen if Island Generation were unable to operate during a demand peak.

“Where would that extra energy come from?” Neufeld, who serves as his party’s critic for oil, gas and LNG, said. 

“Would that be siphoned off of the Lower Mainland? Would it be imported? Those are excellent questions that the minister would be responsible to answer.”

B.C.’s LNG push and electricity demand

By 2030, there could be three LNG facilities operating in B.C. and a huge increase in demand for natural gas. In May, the Canadian government celebrated an agreement that could see one of them, Ksi Lisims LNG, sell one million tonnes of liquefied natural gas (LNG) per year to Germany, starting sometime in the 2030s.

Another is LNG Canada, located on B.C.’s coast, the first large-scale LNG export facility in the country. 

It is already using up a huge amount of gas to operate: last year, LNG Canada received more than 3.6 billion cubic metres of natural gas. Nearly 10 per cent of what it burned off was because of an issue with one of the flare stacks, as The Narwhal previously reported.

And, it might eventually use much more. Earlier this month, B.C. Premier David Eby, federal Natural Resources Minister Tim Hodgson and LNG Canada CEO Chris Cooper held a press conference about a potential second phase of the project.

The newsiness of this announcement — trumpeting another small step toward a final commitment to proceed — was so thin one reporter asked why a press conference had been called at all. But Phase 2 could make a big difference to the province’s energy supply, as LNG Canada’s demand for natural gas could double as its production capacity rises to 28 million tonnes of LNG per year.

Woodfibre LNG will have a much smaller production capacity. It is expected to produce 2.1 million tonnes of LNG per year and will need about 7.7 million cubic metres of natural gas to do so. That gas will be supplied via a new pipeline branch off the Eagle Mountain pipeline, which currently supplies Vancouver Island, including the Island Generation station.

FortisBC is in the process of building that new section of Eagle Mountain as well as upgrading the section of the pipeline that leads into Squamish. A spokesperson for the company said in a statement that Fortis “regularly assesses system capacity and plans for growth and changing regional needs.”

“FortisBC can meet the needs of existing customers on Vancouver Island and we are continuing to deliver natural gas service in line with our contractual agreements,” the spokesperson said.

The Narwhal also asked Capital Power for an interview to discuss the minister’s comments. In response, a company spokesperson sent a two-sentence statement.

“Capital Power and BC Hydro are engaged in discussions around the future of the Island Generation facility in Campbell River,” the statement said. “Our focus is always to ensure we support the reliable, safe delivery of the power needs of British Columbians.”

A follow-up email with the same questions The Narwhal sent to the Energy Ministry went unanswered.

Conservative MLA Neufeld said British Columbians should not have to worry about a shortage of natural gas, even with a large increase in demand.

“Having spent over 30 years in the industry in northeast British Columbia, I will state that it is my opinion that that is a non-issue,” Neufeld told The Narwhal.

“There is far more than enough natural gas in the ground … we don’t have to be concerned about a supply crunch. Whether that is taken advantage of properly by government and by regulation is another question for the minister.”

But as British Columbians brace for a summer of heat waves and rising electricity demands, the province’s ability to keep power flowing becomes an increasingly important question.

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Summary

• The government under Prime Minister Mark Carney has “repealed or weakened virtually every climate policy and regulation that Canada had developed in the last decade,” a former member of Canada’s Net-Zero Advisory Body told MPs.
• Two former members of the body said last week they were left uninformed of new policy directions on fossil fuel development and emissions reductions while their previous advice was ignored.
• Canada’s goal of reaching net-zero emissions — and helping to slow the effects of climate change — by 2050 is now “out of reach,” they said.

The consequences of Prime Minister Mark Carney’s methodical cuts to Canada’s environmental rules are not being communicated honestly to the public, two former government advisors say. 

Climate scientist Simon Donner and environmental advocate Catherine Abreu are both former members of a legislated advisory body of climate scientists and policy experts. Last week, they shared their experience on that body with MPs, saying Carney’s government repeatedly kept them in the dark while it gutted one rule after another — from scrapping the consumer carbon price to setting aside clean electricity rules, ditching the oil and gas emissions cap, pausing electric vehicle mandates and signing a deal with Alberta that delayed rules for methane gas leakage and weakened requirements for industry to pay for its carbon emissions.

The government refused offers to hear their advice and cancelled a high-level meeting at the last minute, Donner, the former co-chair of the Net-Zero Advisory Body and a University of British Columbia professor who runs a Climate and Coastal Ecosystem Laboratory, told the House of Commons environment committee on June 9. 

Donner and Abreu, the former executive director of Climate Action Network Canada and now the executive director of the International Climate Politics Hub, were there to brief MPs from multiple parties on the state of the advisory body.

“We were not informed of policy decisions underway, nor asked to provide advice on those decisions,” Donner said about the government’s myriad changes while he was co-chair.

That included their assessment that the Carney government’s actions were trashing any chance of Canada reaching its goal of negating its planet-heating carbon pollution, which would slow its contribution to the climate crisis that is wreaking havoc on Canadians’ health. That judgment has since been echoed by the Canadian Climate Institute.

Abreu also felt Carney’s enthusiastic support for the oil and gas industry is being downplayed. The industry is the economic sector with the highest amount of emissions and despite Canada’s climate commitments, those emissions are climbing ever higher, offsetting declines in other economic sectors. 

“The shredding of environmental policy that this government has undertaken means that Canada is now on track to violate its own law and to fail to attain net-zero emissions by 2050,” Abreu said.

Carbon pollution worsens climate change, which is fuelling floods and wildfires that can lead to evacuations, toxic smoke and heat waves that smother cities and trigger asthma and mental health issues. Fumes and exhaust from fossil fuel-powered vehicles, power plants and gas appliances are connected with heart disease, strokes, chronic lung diseases, cancer and tens of thousands of premature deaths a year.

Abreu said the government didn’t consult the advisory body before releasing its Climate Competitiveness Strategy, which focused on protecting the global competitiveness of Canada’s oil and gas sector. That strategy “unwound much of the policies that we had advised on in previous years,” Abreu said.

And, she said, because the government designed that document to be a “strategy” and not a formal “plan,” it sidestepped a legal requirement to consider submissions from the advisory body on the plan’s merits.

Canadian oil producers are expected to make as much as $100 billion in profits this year as a result of the Iran war, according to the Canadian Centre for Policy Alternatives. The government is not contemplating a windfall tax on those profits, Abreu noted, which would require companies to hand over a portion of that excess profit to public coffers. Instead, the government is moving to further subsidize the industry. 

This spring, Carney formalized a tax credit for companies that use technology to capture carbon dioxide for the purposes of pumping more oil out of the ground. Former environment minister Steven Guilbeault, who announced he would resign his seat last month over the government’s policies, initially quit cabinet in part over the government’s plan to offer this new subsidy.

“Transparently communicating to Canadians, ‘This is a decision we’re making, here’s why and here are the protections that you’re going to lose as a result,’ is critical, and we’re not having that kind of open conversation,” Abreu told the MPs.

“Instead, things are being obfuscated with misleading language, including claims that we will continue to meet our net-zero goal, when clearly that has been put out of reach with recent decisions, and with misleading language like ‘decarbonized’ oil and gas, which is something that I hear this government say regularly, and is actually just a complete contradiction in terms.”

Environment and Climate Change Minister Julie Dabrusin’s spokesperson Keean Nembhard said the Climate Competitiveness Strategy contained measures to drive down emissions, including methane rules, carbon pricing, tax credits, critical minerals support and efforts to mobilize capital for the low-carbon transition. He said the government’s nature, electricity, and auto strategies are also meant to help cut carbon pollution.

“Our government has been clear that fighting climate change, protecting communities and building Canada are top priorities. Climate change is one of the defining challenges of our time and Canadians expect us to meet this challenge head-on,” he said.

The Narwhal also reached out to the prime minister’s office for comment but did not receive a response before publication.

Government ignored research, cancelled meetings with experts

The Net-Zero Advisory Body is authorized to include up to 15 people, but dropped to just six members last summer following Carney’s election, Donner said.

“It became very difficult for us to produce any work of value,” he said. 

The advisory body’s website currently lists five members. In April, Minister Dabrusin issued a statement that the government would be “implementing a series of updates” to the advisory body, as a result of “last year’s departures” as well as a “shift in focus” to “investment and growth in a low-carbon economy.”

The June briefing on the Net-Zero Advisory Body was the first that the House of Commons Standing Committee on Environment and Sustainable Development has held. The committee’s job is to study and report on matters relating to a range of different environmental departments, agencies and laws, and has recently examined things like single-use plastics, carbon pricing and fresh water.

It’s one of several parliamentary committees in the House of Commons and Senate and is made up of MPs from parties with official status, which is based on the number of seats they hold. Although the Green Party and NDP aren’t committee members, Conservative MPs offered time for those parties’ questions. 

The former advisory body members gave opening statements and then answered questions for roughly an hour. Their testimony focused on the Canadian Net-Zero Emissions Accountability Act, a federal law passed in 2021, which mandates that Canada reach net-zero greenhouse gas emissions by 2050. The law requires the government to set increasingly stringent targets for lowering emissions and publish its plans to achieve them.

The law also establishes the Net-Zero Advisory Body of which Donner and Abreu were formerly members. It’s a kind of government climate council that provides independent advice to the environment minister on how to achieve net-zero emissions. The United Kingdom, South Korea and Australia have similar legislated climate councils. 

Under Canada’s law, the government is required to take into account “submissions provided by the advisory body” when coming up with an emissions reduction plan.

Abreu and Donner both joined the advisory body in 2021, but resigned last December after becoming frustrated with the cold shoulder they said they were receiving from Carney’s government. 

Last summer, the advisory board volunteered to brief the government on industrial carbon pricing and equivalency agreements with the provinces, Donner said, but he received “no response” from Carney’s office, and an acknowledgement but no appointment from Energy and Natural Resources Minister Tim Hodgson’s office.

The last straw was when the government proposed a deal with Alberta that weakens industrial carbon pricing, delays restrictions on industrial methane gas and significantly lowers the ambition of a carbon capture proposal from industry, while paving the way for a million-barrel-per-day oil pipeline to the west coast. 

Donner said the environment minister’s office cancelled a briefing with the advisory body scheduled for the day after the Canada-Alberta Memorandum of Understanding was released in November. 

After that, he said, he concluded the group’s work “had become performative.”

“You can’t be saying these deals are still compatible with net-zero by 2050. They’re not. The [Alberta] deal is not compatible with it,” he said.

“Just be honest with Canadians about this. If you’re going to pass deals like this, be honest about the implications.”

‘The oldest, most boring conversation I can possibly imagine’ about pipelines

Abreu told MPs the government has “repealed or weakened virtually every climate policy and regulation that Canada had developed in the last decade,” but with “no alternative policies or pathways being put in place.” 

She argued Carney’s killing of the consumer carbon tax on his first day in office was a decision based on “irresponsible and inaccurate rhetorical politics.” 

The prime minister’s decision to ditch the proposed oil and gas emissions cap opens the door for the government to help build projects, she argued, which will grow the sector’s emissions. 

And delaying the zero-emissions vehicle mandates has coincided with a drop in sales of new electric vehicles, she pointed out, “right at the moment when soaring gas prices are hurting Canadians who are struggling to fuel their gas guzzlers.”

The government’s proposal this spring to overhaul fossil fuel and nuclear project oversight, habitat preservation and species at risk protection and create “federal economic zones” where certain developments can be “pre-approved,” also undermines some of Canada’s longest-standing environmental protections, Abreu said.

She also called out Carney’s “national electricity strategy,” which sets aside clean electricity regulations and allows for new gas-fuelled power plants — which “makes a mockery of the abundant clean energy resources that should be a very celebrated economic advantage in this country.”

Instead, the country is stuck once again “having the oldest, most boring conversation I can possibly imagine, about how we’re going to build another pipeline,” she said.

“We’ve been having the same conversation the entire time that I’ve been in my professional career. It’s sad.”

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Summary

• B.C. is preparing to overhaul its natural gas royalty system, which determines how much revenue the government earns from the industry, by 2027.
• The government is promising a better return for taxpayers while industry warns higher rates could drive investment to Alberta.
• The debate comes as some advocates argue B.C. should collect more from gas companies who are using public lands for profit.

As B.C. readies to change what it charges fossil fuel companies extracting natural gas from public lands, industry supporters are pushing back.

B.C. has been eyeing changes to its natural gas royalty structure since 2021 when an independent assessment found the existing system needed a complete overhaul. The old system was “contributing to or possibly overcompensating” for the costs of developing oil and gas in B.C., the assessment concluded, which hugely reduced royalties returned to the public.

Details on how the new framework will increase royalties have yet to be released.

According to BC Conservative Labour critic Kiel Giddens, it risks “chasing away investment potential.” He raised the issue in the legislature on the final day of the spring sitting, saying if B.C.’s new royalties are too high, gas producers could move their operations to Alberta.

“There is a real risk that we could actually lose revenue if we’re not competitive,” Giddens told reporters.

Green Party MLA Jeremy Valeriote had a different take. 

“If Alberta wants to sell off their public resources for a song, then we should let them,” he told reporters at the legislature. “We should be standing up for competitiveness in terms of getting the most out of our resources.”

Energy and Climate Solutions Minister Adrian Dix is confident the new royalty system will strike a better balance for both the industry and British Columbians.

“To ensure a fair return … but also a situation where the industry can prosper and invest — those are my two goals in the process,” Dix said.

The new royalty system is emerging alongside B.C.’s burgeoning liquefied natural gas (LNG) industry. LNG Canada, the first production facility to begin operating in B.C., began shipping its product to Asian markets last year — although the facility has experienced equipment issues that have reduced its production capacity. The B.C. and Canadian governments are eagerly anticipating a final investment decision on Phase 2 of the facility, which will double its capacity to 14 million tonnes of LNG per year.

Meanwhile, three other B.C.-based LNG projects are moving toward being operational before 2030. Together, these LNG production facilities will create a significant boom in gas demand, one the industry is keen to capitalize on.

On April 9, Dix sent a letter to industry stakeholders, as originally reported by DOB Energy. The letter, obtained by The Narwhal after Dix’s ministry refused to provide a copy, acknowledged the feedback included several key themes, such as “the need for reliable B.C. gas supply to underpin existing and future LNG projects.”

Dix also emphasized the government’s commitment to “the growth of LNG as a cornerstone of B.C.’s economic strategy.” 

“A strong, investable upstream sector is essential to realizing this opportunity,” he wrote.

How much revenue does B.C. earn from royalties? Probably less than you think

The new royalty system is set to take effect on Jan. 1, 2027, following years of consultations with the industry and First Nations, as well as members of the public.

Royalties are supposed to give British Columbians a share of the profits that private companies earn by pumping oil and gas from public lands. B.C.’s previous royalty regime was criticized on that front because it offered companies a generous suite of credits that could reduce their royalty payments.

In 2022, B.C. announced the end of several of those credits, including the deep well credit, which former Premier John Horgan described as “the largest fossil-fuel subsidy in British Columbia.” 

At that point, the province had given away more than $7 billion in credits to oil and gas producers, with $3.75 billion of those still on the books. Companies are able to use those credits to reduce the royalties they would otherwise pay; money that would have gone into the provincial budget to fund other initiatives. (As of last month, companies had yet to claim about $600 million in credits, according to Dix.)The billions in credits contrast with the revenue B.C. actually collects from natural gas producers. Budget documents show B.C. has collected $5 billion in royalty revenue from gas producers since 2019, nearly half of that in 2022. This year, the province expects to collect $942 million in royalty revenue — less than it projects the BC Lottery Corporation will earn. Next year, royalty revenue is expected to hit $1.6 billion, driven by higher natural gas production.

“I think the dirty little secret of oil and gas is that they don’t contribute a ton in taxes,” Sven Biggs, Stand.earth’s Canadian oil and gas programs director, said. “There is not tons of economic activity actually connected to this [industry].”

The majority of B.C.’s oil and gas operations are concentrated in the northeast, where agricultural fields are criss-crossed by pipelines and studded with well pads. Oil and gas is a way of life for many Peace Region residents but it also comes with downsides. Fracking operations use huge amounts of water to extract gas from the ground, a process that can also leak gas and chemicals into the air and water. The Canadian Association of Physicians for the Environment has called for the B.C. and federal governments to fund a health impact assessment of the LNG sector to assess links between the industry’s activities and “asthma, heart disease, birth defects, childhood leukemia, neurodevelopmental and neurodegenerative diseases like autism and Alzheimer’s.”

Beyond royalties, Biggs argues B.C. should also be seeking to recoup the cost of the industry’s environmental and potential health impacts.

“All of those costs get passed on to us if they are not paying,” he said. “Technically this gas belongs to British Columbia — it’s a Crown resource and we are licensing it to these extraction companies.”

Complaints about competitiveness ‘a smokescreen,’ advocate says

The new system the province is proposing would take into account the money companies invest in their B.C. operations, as well as the money those operations make, called a revenue minus cost system. This approach is “globally recognized for maximizing economic values,” according to a B.C. government website.

Adopting a revenue minus cost system would bring B.C. into alignment with other gas-producing places, including Alberta, notes Werner Antweiler, an economics professor at the University of British Columbia’s Sauder School of Business.

When the province began reviewing the royalty regime, the plan was to capture “50 per cent of profits after production costs are accounted for” — a pretty standard split in other jurisdictions, according to Antweiler.

“When you calculate revenue minus cost, revenue is pretty simple [because] you can see what the market pays,” Antweiler said. “The cost, that’s a different thing. … Anything that’s increasing costs will reduce profits and will lower the royalty. So one of the key questions that I have is to what extent are we calculating costs the same way as other jurisdictions?”

Depending on how costs are calculated, companies may pay only 30 or 40 per cent of their profits to governments in royalties, Antweiler said.

As for BC Conservative Labour critic Giddens’ warning about companies moving to Alberta, Biggs said those warnings are “a smoke screen from the industry.” He noted gas companies have been investing in B.C. for years — a trend partly sparked when Alberta implemented a new royalty regime in 2016.

“I don’t see a way that they can walk away from those at this point,” he said. “It would be a huge write-down. Alberta could produce more gas — hypothetically, but not really enough to meet the kind of demand we’re talking about.”

However, Biggs worries that governments remain susceptible to threats that an entire industry will “pack up and leave town and blame the administration for the lack of investment.”

“It works very well on them every time,” he said.

Years ago, when B.C. was working to lure gas companies to set up shop in the province, offering competitive royalty rates was a key advantage, Antweiler said.

“As the industry has matured, there’s really no reason to continue treating them better than their peers in Alberta.”

‘No decision has been made yet’ on B.C.’s new natural gas royalty regime

Industry priorities have already prompted the government to back down on a couple of proposed royalty scenarios, as Dix’s April letter shows.

“The province will not be advancing the Transition-Plus or Enhanced Return royalty curve scenarios further,” Dix wrote in the letter. “We acknowledge the concerns raised about the magnitude of change associated with those scenarios and the uncertainty they could introduce at this stage. Any further scenarios will consider your feedback as we work to align with the objectives of the new royalty framework.”

The Energy Ministry did not respond to The Narwhal’s questions about the letter, including a request for a description of the Transition-Plus and Enhanced Return scenarios.

Antweiler noted the two scenarios are similar to interim royalty rates outlined in 2022 under which companies pay higher royalties when gas prices are high and lower rates kick in when prices drop. The revenue minus cost system is simpler, he said, and could still give B.C. a good rate of return, depending on how it is designed

“It makes sense to me to move away from just an update of the existing system and to something that’s really robust and economically cohesive,” he said. “That’s exactly what other jurisdictions — like Alberta — are doing.”

Antweiler hasn’t seen the specific rate scenarios the province has been discussing with industry stakeholders. Those are covered by non-disclosure agreements, as Giddens pointed out to reporters.

Dix said non-disclosure agreements, known as NDAs, are a standard part of government consultations with both First Nations and industry stakeholders.

“The energy companies provide information to us about the impact of different possible royalty regimes and differences that are obviously commercially sensitive, so that’s done under NDA,” Dix said. “We put forward different proposals and asked them to comment on different potential proposals, just to see what the impact is on different companies.”

“I think that’s really irresponsible,” the Green Party’s Valeriote said of the government’s apparent concession on the two royalty scenarios. “I think we should be extracting the most value for the B.C. public out of these public resources, and caving into lobbyists and others who want to make it easier to make big profits, it’s just not good public policy.”

“No decision has been made,” Dix said when asked about the letter in the legislature on May 28.

“A lot of work has gone into the process and now we’re in the consultation stage,” he added. “This included extensive consultation with Treaty 8 First Nations and with energy companies.”

The minister told reporters he hopes to have a final decision on the new natural gas royalties later in June.

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

• The Oil Sands Alliance, formerly known as the Pathways Alliance, represents the largest companies operating in the Alberta oilsands.
• Since 2021, the alliance has promised a huge carbon capture project that will help reduce oilsands emissions by 68 megatonnes each year, three-quarters of the industrial region’s total.
• In the finalized memorandum of understanding between the Alberta and federal governments, that number has been quietly reduced to just 16 megatonnes annually, a reduction of 77 per cent from the initial promise.

Five years ago, the five largest oilsands producers promised their operations would be net-zero by 2050. The claims were huge: a massive carbon capture and storage project would help reduce emissions by 68 million tonnes of carbon each year.

Now, with a memorandum signed between Alberta and Ottawa to facilitate a new oilsands pipeline to the West Coast and promises of billions in tax credits to support the project, those promises have plummeted. 

In the agreement, finalized in May, it’s anticipated those same producers will reduce their emissions by 16 million tonnes annually by 2045, a significant decline from the original claim.

The pledge to achieve net-zero emissions in the oilsands was part of an intense pitch to governments over the past five years, alongside major lobbying to provide financial support for what could be the largest carbon capture project in the world.

It was put forward by the Pathways Alliance — now renamed the Oil Sands Alliance — made up of the largest companies operating in the Alberta oilsands: Suncor, Cenovus, Canadian Natural Resources, Imperial Oil and ConocoPhillips. 

The federal and provincial governments have now both unveiled tax credits for carbon capture, rolled back environmental regulations aimed at tackling emissions, pledged to fast-track projects and signed an agreement to aggressively push a new pipeline through British Columbia, even without a company willing to build it. 

Patrick McCurdy, a professor of communications at the University of Ottawa who has studied environmental claims by the alliance of oilsands companies, said the walkback fits into a larger pattern of greenwashing — a method in which companies mislead the public through those claims. 

He said the companies will “say whatever is politically convenient and what they can get away with” to build the social licence needed to keep producing oil. 

“They have that now with [Prime Minister Mark] Carney,” he said.

Academic paper found ‘numerous indicators of greenwashing’ in carbon capture project’s messaging

The coalition of companies, then called Pathways Alliance, explicitly called for reductions of 68 megatonnes of emissions per year and celebrated the goal in news releases, editorials and widespread advertising campaigns.The plan, with carbon capture and storage as its centrepiece, would be built in three phases, each phase eliminating between 21 and 25 megatonnes per year, according to those early pledges. There are no other detailed plans highlighted by the alliance to achieve its net-zero pledge. One megatonne is one million tonnes.

As late as December of last year, the Alberta government used the 68 megatonne figure in a presentation to U.S. lawmakers highlighting Alberta’s energy potential.

McCurdy has studied the claims of the Oil Sands Alliance since its inception and co-published a paper in 2023 focused on how it greenwashes information. 

The paper’s conclusion was unequivocal. 

“There are numerous indicators of greenwashing in Pathways Alliance’s public communication,” it reads. “Their messaging omits important information, uses misleading framing and comparisons, and fails to meet standards expected of a credible net-zero plan.”

It says the alliance’s environmental, social and governance claims should raise concern about the viability of its carbon capture and storage project.

Canada does have laws about greenwashing — though they were walked back by the Carney government last year. When those laws passed, Pathways wiped many environmental promises from its website. The anti-greenwashing provisions, part of the federal Competition Act, had been created in part to address the issue of companies advertising they were headed toward net-zero emissions while not presenting evidence showing they were taking any significant steps toward cutting their carbon pollution.

In an interview, McCurdy said it’s typical for oil and gas companies to make big public promises and then lobby behind the scenes to move the yardsticks. 

“I imagine they’re able to reduce these numbers, or change the numbers … because the social licence doesn’t seem to be threatened in the same way it was before,” he said.

The Oil Sands Alliance did not respond to questions from The Narwhal.

The office of Alberta Premier Danielle Smith and the Alberta Environment and Protected Areas Minister Grant Hunter did not respond to emailed questions. 

The federal Privy Council Office did reply, but did not directly answer any of the emailed questions, instead highlighting the balance between economic growth and emissions reductions.

When asked if the federal government is confident the project can achieve the lowered target of 16 megatonnes, Pierre Cuguen, a spokesperson for the Privy Council Office, said the country already has operating carbon capture and storage projects that prove the technology can work in real-world conditions, while noting it aims to be the largest carbon capture project in the world. 

“Pathways will continue to go through detailed design work, regulatory review and investment decisions as the project moves forward,” he wrote.

The oilsands account for a third of all emissions in Alberta

The memorandum of understanding between Ottawa and Alberta finalized terms for everything from an industrial carbon price to building out a national electricity grid, but the terms related to the Pathways carbon capture project still require a three-way agreement with the companies behind the scheme. 

But the governments reaffirmed “their shared objective” of the project reducing emissions by 16 megatonnes annually by 2045, starting with six megatonnes when the project comes online in 2035. 

The oilsands emit approximately 90 megatonnes of emissions each year, almost 33 per cent of all emissions in Alberta. Since 2004, 15 megatonnes of emissions have been captured by existing carbon capture projects in the province, slightly more than one megatonne per year.

Both governments have agreed to walk back carbon price targets, streamline approvals of projects and the federal government has scrapped the proposed oil and gas emissions cap and largely handed environmental impact assessments over to the province. Each represents a lobbying victory for the oil and gas companies.

Sean McCoy, an associate professor of engineering at the University of Calgary who specializes in carbon capture, said the changes in emissions pledges are not due to any changes in technology or knowledge. 

“Let me put it this way, I bet 99 per cent of what we know today about capturing carbon dioxide, more like 99 or even above, we knew in 2021,” he said. 

McCoy said one possible answer to why the project has been scaled back so drastically is cost, comparing it to a home renovation where big plans are reconsidered as the price tag rises. 

“That is pretty common in these sorts of projects, either the cost goes up or the scope of the project shrinks if you’re trying to manage your budget,” he said.

But McCoy points out that even the reduced 16 megatonne figure represents the largest carbon capture and utilization project ever constructed.

When asked if the reduced target was achievable, McCoy said it’s ambitious.

“It’s just really, really big,” he said. “You’ve got to look at the scale of all the different parts, because it’s not like they’re going to capture 16 million tonnes at one smoke stack.”

It’s unclear how much the final project will cost, but estimates point to a budget over $20 billion, and the former CEO of Imperial Oil previously said the alliance was aiming for 75 per cent of the funds to come from the federal and provincial governments. Most of that will come from newly established tax credits.

Carbon capture is ‘always a just-around-the-corner type thing’: professor

There’s a lot we don’t know about the Pathways project, McCoy said, so it’s hard to directly evaluate the plans. 

McCurdy, looking at it through the lens of influence and communication, sees that as intentional. His research includes strategic omissions as part of the greenwashing strategy. 

“These companies, some of the biggest in the country, have the money to focus-group, to get the best creatives to make these campaigns to try and get public sentiment on their side,” he said.

But while earlier oilsands marketing focused on the need to decarbonize and the goal of achieving net-zero emissions, the messaging has changed alongside the reduced emissions ambitions. 

Jon McKenzie, the CEO of Cenovus, told investors in May the debate around oilsands development has been “myopically focused on the climate agenda,” according to the Canadian Press.

It’s a more direct pushback against the earlier claims of the alliance, but for McCurdy, the intent was always to kick the can down the road. 

“It’s always a just-around-the-corner type thing,” he said of carbon capture technology and some of its bigger claims. “It’s a well-known trope to try and look at technology to save us out of this.”

Updated June 5, 2026, at 3:30 p.m. MT: A previous version of this article incorrectly referred to the Oil Sands Alliance as the Oilsands Alliance.

Updated on June 25, 2026, at 3:30 p.m. MT: This story has been updated to correct an error. Past claims of the the Oil Sands Alliance, formerly known as the Pathway Alliance, promised 68 megatonnes of total emissions reduction, not of carbon capture specifically, as a previous version of this article and its headline stated. Carbon capture and storage has always been the centrepiece of the alliance’s plan, and no other detailed plans were highlighted by the alliance as ways to achieve its net-zero pledge.

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

• 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.

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

• Last week, Prime Minister Mark Carney’s government proposed major changes to the federal assessment process for mining, oil and gas and other infrastructure projects.
• The proposed changes include shifting assessments from an agency under the federal environment minister to regulators that report to the natural resources minister.
• Former ministers, First Nations and environmental advocates are criticizing the proposal, some calling it a more significant rollback of environmental law than was seen under former prime minister Stephen Harper.

Last year, Prime Minister Mark Carney established an office tasked with fast-tracking handpicked major industrial projects. Now, he says that’s not enough. He has a new proposal on the table meant to roll out the red carpet for all projects requiring federal approval, including pipelines, mines, transmission lines and other infrastructure.

The proposal, unveiled last week, would create “federal economic zones” where certain developments can be “pre-approved,” and provide exceptions to several rules governing fossil fuel and nuclear oversight, habitat preservation, species at risk protection and major project reviews.

It would fundamentally change the way the country scrutinizes industrial development and consults with Indigenous Peoples, in some cases shifting reviews at an agency under the purview of the environment minister over to federal bodies that report to the natural resources minister.

The government outlined its plan in two discussion papers, but it will need to flesh out the details and formally introduce them as part of new legislation, before they can be implemented in law. The Liberals are now able to pass legislation much easier, after they secured a Parliamentary majority following April’s byelections and the addition of five floor-crossing MPs to their caucus.

The House of Commons is on a two-week break, scheduled to return May 25. Meanwhile, the proposal is open for public comment through June 7. 

Here’s what you need to know.

Who wanted this change? Who didn’t?

The government says the alterations are necessary so Canada can better compete with other countries for investment dollars, and strengthen the Indigenous consultation process. It said the process to build things is “often slow, expensive and confusing” and the government must “go further to streamline review and approvals processes.”

The Canadian Chamber of Commerce, which represents businesses across the country, also believes the government’s fast-tracking regime has “not gone far enough” and is hoping Carney continues to “peel back some of the red tape layers that have been holding back business success.”

Canada’s oil and gas industry has consistently advocated since Carney took office for his government to overhaul environmental assessments to turbocharge fossil fuel growth. Industry executives have personally pushed this position despite the industry enjoying big profits off the war in Iran, and despite the scientific conclusion that carbon pollution, of which the oil and gas industry is the largest contributor in Canada, is furthering destructive climate change that is leading to myriad health problems and premature death for Canadians.

Two former Liberal environment ministers have harshly criticized Carney’s proposal. Liberal MP Steven Guilbeault, who was the federal environment minister from 2021 to 2025, told the Toronto Star Carney’s plan is “worse” than the changes under former Conservative prime minister Stephen Harper, which resulted in some high-profile legal challenges. Former Liberal MP Catherine McKenna, who held the same post from 2015 to 2019, told the Canadian Press Carney’s proposal will lead to a “lack of trust” and lawsuits, ultimately making the project approval process slower, not faster.

Ecojustice, an environmental law charity, has described the changes as potentially ushering in “the biggest rollback of environmental protections in a generation.” The Assembly of Manitoba Chiefs, which represents 63 First Nations in that province, said it raises “serious concerns that Canada is moving toward a system where speed takes precedence over Treaty obligations, environmental stewardship and First Nations consent.”

The government wants to create ‘federal economic zones’ where developments are ‘pre-approved’

Carney’s government wants to legalize “federal economic zones” which it says could include areas designated for energy production and transmission, industrial regions, transportation and telecommunications. 

Inside these zones, the government would “pre-approve” certain developments, subject to conditions, and exempt projects from requiring individual environmental reviews — instead just requiring one overarching assessment.

It said the zones, and the activities allowed in them, would be “clearly defined.” Consultation with Indigenous Peoples would be a “key part” of the process, it added, including on determining the conditions for development inside the zones. The agreement of provinces is also “essential,” it said.

“This co-operation between federal and provincial governments would allow projects to be fast-tracked under both federal and provincial regimes,” reads the discussion paper. 

Sound familiar? Ontario passed similar legislation last year

A provincial regime is already in place in Ontario, after Premier Doug Ford’s government passed Bill 5 last year. The bill established the similar-sounding Special Economic Zones Act. Inside Ontario’s economic zones, the government can select certain proponents and projects, and exempt them from some municipal by-laws and provincial laws, including environmental protections. 

Critics have said Ontario’s law threatens wetlands, watersheds, peatlands and endangered species, and the Indigenous communities who rely on them. It’s subject to a court challenge from First Nations, asking for the law to be found unconstitutional.

The federal economic zones would be enabled through regional assessments, which are already an approach used by the Impact Assessment Agency of Canada to examine the cumulative effects of development in a given area. 

There is currently an ongoing federal regional assessment in the Ring of Fire, the mineral-rich area in the James Bay Lowlands known as Bakitanaamowin Aki, or “the Breathing Lands,” and Mammamattawa, or “many rivers coming together,” by the First Nations that call it home. 

Days after passing Bill 5, Ford said he would designate the Ring of Fire a special economic zone under Ontario law “as quickly as possible.” But in March this year, in a sudden shift in tone, Ford said he didn’t “need” to use these powers anymore to develop the area due to partnerships with several, but not all, First Nations communities in the region.

The Ontario government has long spoken about the region becoming a major mining hub. But an interim Ring of Fire regional assessment report has pointed to the need for environmental monitoring in the area’s boreal forest and peatlands, and the need for communities to urgently access health care. 

The provincial government, meanwhile, has been withholding scientific data and funding as part of the assessment process, and is not at the table with the First Nations and federal government representatives seeing it through, The Narwhal has reported.

New rules would change the role of the federal environmental review agency

Carney’s proposal would remove the ability of the Impact Assessment Agency of Canada to examine any pipeline projects that cross provincial or national borders, as well as any transmission lines or “offshore renewable energy projects.”

The agency, accountable to Environment, Climate Change and Nature Minister Julie Dabrusin, examines projects for sustainability, environmental protection and Indigenous Rights. It carries out its assessments “grounded in sound science, rigorous process and due diligence,” according to its website.

“Does Canada need to weaken its environmental laws to allow projects to proceed? No,” the agency declares on a frequently asked questions page. “Do federal policies prevent LNG, oil or pipeline projects from moving forward in Canada? No.”

Carney’s government is now of the opinion that issues like “poor coordination between government departments” are slowing down projects like pipelines. The government is proposing to shift assessments of certain projects away from the agency and over to two regulators that report to Natural Resources Minister Tim Hodgson. 

The job of reviewing all cross-border pipelines, transmission lines and offshore renewables would go to the Canada Energy Regulator, while the Canadian Nuclear Safety Commission would handle project reviews related to nuclear and uranium projects.

The government would also have the power to declare major pipelines “in the public interest,” before the energy regulator is required to complete its review of the project’s conditions or where the pipe would actually be laid.

At the same time, the government is proposing that the Impact Assessment Agency become the home of a new “Crown consultation hub” that would “ensure that each Indigenous group affected by a major project goes through one clear and coordinated consultation process for each project.” 

It is also proposing to assign the federal review coordinator at the agency the job of ensuring project assessments and federal permits “stay on track.” The government said it would change the law to ensure project reviews and permit reviews “happen at the same time” and that a federal decision would take no longer than one year.

Sound familiar again? Carney isn’t the first leader to try to fast-track industrial projects

Carney’s proposal is reminiscent of a shift that happened under Harper’s government, which tried to accelerate environmental assessments by moving more oil and gas oversight to the energy regulator’s predecessor, the National Energy Board, in 2012.

Years later, the National Energy Board came under scrutiny after the Federal Court of Appeal quashed the government’s approval of the Trans Mountain oil pipeline expansion project, saying the board’s review of the project was flawed. The former Northern Gateway pipeline proposal also had its federal permits overturned by the Federal Court.

Former prime minister Justin Trudeau’s government passed the Impact Assessment Act and Canadian Energy Regulator Act, collectively through Bill C-69, allowing the government to consider the impact of natural resource projects on issues like climate change. But a Supreme Court of Canada decision in 2023 found the assessment scheme “largely unconstitutional,” forcing Trudeau’s government to introduce a revised version of the law in 2024.

There will be new exemptions to Canada’s species at risk law and fish permits

Carney’s government wants to change “some federal laws” that it argued can make the regulatory process “slow, repetitive and less flexible.” One of these appears to be the Species At Risk Act, a federal law passed in 2002 that is meant to prevent species extinction and help with population recovery. 

The law has a clause known as the “jeopardy test,” that restricts permits for an activity affecting a species or its critical habitat, unless the government believes the activity “will not jeopardize the survival or recovery of the species.”

Carney’s proposal would give the government the power to exempt projects from the application of this test. It said the power would be “limited” and have a “high threshold to be met,” would have to be in the “public interest” and would have to come after the proponent has made “all reasonable efforts” to avoid impacts.

The government also wants to offer more flexibility for permits that impact fish and fish habitat, when it comes to compensating for environmental harm. And it would allow “some early construction activities to start” before the government decides on the merits of a project, “if necessary permits are approved.”

Carney’s proposal also allows ministers to adjust certain conditions of a project assessment “in exceptional circumstances” and “adjust environmental conditions for projects of national interest, when needed.”

And it would hand the environment minister the power to issue a single federal document for certain projects that would include all federal decisions “required for a project to move forward.” It said experts in different departments would still review the project and provide advice, and enforcement would still be handled by the departments responsible. 

The changes come after Ford’s government in Ontario also removed the province’s Endangered Species Act and replaced it with the Species Conservation Act this year. That has had the effect of removing protection from many species.

After Ontario’s change, some threatened fish and birds are now only protected by federal laws. 

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Summary

• Canadian law requires provinces to implement a carbon pricing system for major industrial polluters as a way to reduce greenhouse gas emissions.
• But Alberta’s carbon pricing system isn’t producing the intended results, in part because its effective carbon price is too low to incentivise companies to reduce their emissions.
• It’s a sticking point in Alberta’s and Canada’s negotiations over whether and how to build a new pipeline to the West Coast. The two jurisdictions missed an April 1, 2026, deadline they set for themselves for agreeing on a new carbon pricing framework in Alberta.

Alberta and the federal government have been negotiating for months in an attempt to finalize a memorandum of understanding meant to pave the way for two key projects: a new pipeline to the West Coast and a massive carbon capture and utilization project in the oilsands.

Some elements of that deal have been hammered out, but one issue has proven tricky — an agreement on the industrial carbon price (once again, it’s not a tax).

The deal signed by Alberta Premier Danielle Smith and Prime Minister Mark Carney last year called for a new framework on industrial carbon pricing by April 1, a deadline that came and went. 

So what exactly are they talking about and what could we expect to see?Here’s a primer on what it all means, from who pays for what to why oil companies really don’t want to spend their own piles of cash.

What is the industrial carbon price?

The consumer carbon price (RIP) is what most people think about when they hear about a carbon tax or a carbon price (it’s truly not a tax, but we’ll call it that, if you insist). That since-deceased mechanism was designed to impose a cost on people to incentivize change. Think about “sin taxes” on cigarettes as one example. Make a tank of gas more expensive and maybe people will drive less.

The industrial price, snappily named the “output-based pricing system” in federal lingo, targets large industrial emitters. Like the consumer version, the price is meant to incentivize emissions reductions. The more efficient a company, the bigger the savings. 

Each province manages its own industrial carbon price scheme. They can design their own, as long as its reduction potential is considered equivalent to the federal version, or they can simply use the federal system.In Alberta, it’s known as the Technology Innovation and Emissions Reduction Regulation, but everyone just calls it TIER.

Okay, but how does the industrial carbon price work, exactly?

This stuff can get tricky, but let’s start easy.The premise is simple: large-scale industrial emitters (think steel, oil and gas and concrete) create the highest amounts of emissions. To reduce this, the government has put a price per tonne of carbon pollution on a small percentage of emissions these companies produce to incentivize them to adopt cleaner processes that emit less carbon. The money collected from these charges is pooled and distributed back to companies for investments that support this shift in emissions-reduction technologies, like carbon capture and storage.

The government sets a specific price for a tonne of emissions from a company. It also sets a threshold — if you pollute under that threshold, you don’t pay the carbon price, but if you pollute more than that threshold, each extra tonne is priced.

Companies, especially ones with a lot of emissions such as oilsands mines or concrete plants, want to reduce emissions as much as possible to avoid paying too much.

It’s also important to note the price applies to large emitters, with more than 100,000 tonnes of emissions in a year (equivalent to the annual emissions from approximately 22,000 cars).

The federal rules also call for incremental increases to the price to add an extra nudge. Over time, that makes the price of pollution more and more expensive, which is the entire point.

This is a policy designed to reduce pollution. Without it, pollution is free for the polluter, despite its costs to society and the environment. 

Carbon pricing is considered by many experts to be the most efficient and least disruptive way to reduce emissions. It’s a conclusion Carney himself came to both in 2015 and 2021.

Recent estimates from the Canadian Climate Institute peg the cost of the carbon price on oil and gas producers at 50 cents per barrel, with low, or non-existent, impacts for consumers across a range of products. 

Is carbon pricing all stick? Where’s the carrot?

Glad you asked.

While the carbon price encourages companies to strive to be more efficient to avoid the cost of pollution, they can also reap benefits from going that extra mile.

If a company reduces its emissions below the threshold set by the government, it earns credits. Those credits can then be sold to other companies to bring in real-world revenue.

Specifically, say one company reduces its emissions below the threshold and gathers credits. Another company that is still exceeding the threshold can come along and buy those credits and use them to cover its carbon pricing costs.

Money generated from the carbon price is also reinvested back into research and new technology development.

Win win, right?

Well, this is where things get messy. Especially in Alberta. Because the price is not really the price. 

Sorry, the price is not actually the price? What?

The memorandum of understanding between Alberta and Ottawa explicitly calls for an “effective price” of $130 per tonne of emissions. That’s because the price most people know, known as the headline price, isn’t necessarily what a credit will trade for between those two companies we imagined earlier.

The issue is that the Alberta government made changes to its industrial carbon pricing system one week after signing the memorandum that, when announced, flooded the market with credits and undermined their value. It also now allows companies to invest directly in technologies at their facilities instead of paying the carbon price. Those technologies may or may not actually reduce emissions.

Those changes could allow companies to essentially double dip — avoiding the carbon price by investing in technologies directly, and then collecting credits if their emissions drop.

Alberta also froze its headline price at $95 per tonne last year, rather than increasing the price as dictated by the federal equivalency rules. Not only is that a violation, it undermines the stability of the credit market and reduces confidence in the system for companies making decisions based on projected costs and benefits.

There was also a flood of credits from the rapid expansion of renewable power generation.

The end result is that carbon credits were trading as low as $17 per tonne last year. So while the headline price, which everyone understands as the price of carbon per tonne, might be $95, the effective price was, and is, well below. It’s currently trading between $20 and $40 per tonne.

As it stands, it’s very cheap for a facility to buy $20 or $40 credits compared to paying $95, but that’s less good for the efficient facilities selling the credits. And removes the whole point of the carbon price — making it expensive to pollute.

So what’s the plan for the carbon tax?

The agreement between Alberta and Ottawa signed last November called for a framework to increase the effective price to $130 per tonne by 2030 to be finalized on April 1. That didn’t happen.

Both governments say they continue to negotiate a plan, and rumours suggest something coming soon, but there are still no details. Last week, The Globe and Mail reported the speed at which the price will climb is the main sticking point.

One interesting aspect of the memorandum calls for “a financial mechanism to ensure both parties maintain their respective commitments over the long term to provide certainty to industry, and to achieve the intended emissions reductions.”

Translation: that means the agreement could include some sort of financial backstop for the credit market. That could mean the province would guarantee a credit price by offering to buy credits at, say, $130 per tonne.

That would help to stabilize the price and, hopefully, discourage the province from eroding the carbon pricing scheme (again). 

So we’re cool then?

The memorandum was framed around building both a new pipeline to the West Coast and the giant carbon capture and utilization project tied to the oilsands, known as the Pathways project.

The Pathways project would get carbon credits, which in turn would make that project more viable and could reduce the amount of public dollars used to build it.

However, the five largest oilsands producers behind the plan have dramatically walked back some of their enthusiasm for investing in emissions reductions.

On May 4, the group, which recently changed its name from the Pathways Alliance to the Oilsands Alliance, said it was still interested in carbon capture and storage.

“However, a project of this size requires supportive regulatory and fiscal frameworks, not an uncompetitive industrial carbon tax that no other major heavy oil producing jurisdiction faces, which would limit our industry’s ability to attract investment and grow,” reads the statement.

Jon McKenzie, the CEO of Cenovus, told investors in May the debate around oilsands development has been “myopically focused on the climate agenda,” according to the Canadian Press.

“The result of this myopic dialogue … is that we have created a set of national policies and regulations that make resource development and investment in Canada uncompetitive with the rest of the world,” he said, at the same time he announced an 83 per cent increase in the company’s profits. He also said increasing the carbon price would negatively impact the sector.

Cenovus reported $1.6 billion in earnings in the first three months of this year (McKenzie himself made $10.4 million in salary, stock options and bonuses in 2024). Suncor, another alliance company, reported earnings of $2.1 billion in the same time frame — 50 per cent higher than the same period last year.

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.