Art of the deals
Mark Carney went west and did his best Monty Hall impression, brokering a pipeline deal that could see shovels in the ground in 2027.
It took two press conferences, two premiers, and roughly ten hours for the federal government to do what it has spent a decade insisting the market should do. On Thursday morning in Vancouver, Mark Carney stood with David Eby to announce the Canada-British Columbia Cooperative Prosperity Agreement — nearly $20 billion in federal commitments that Ottawa says will catalyze more than $200 billion in new investment. By Thursday evening he was in Calgary with Danielle Smith, announcing that Alberta had formally submitted the West Coast Pipeline to the Major Projects Office.
In case it wasn’t obvious, the B.C. deal is the price of the Alberta pipeline. Eby extracted a commitment that the North Coast tanker ban stays in place, plus federal assumption of financial risk for spills and financial compensation for B.C. if the pipeline proceeds. Mechanisms under discussion include an annual royalty payment and an environmental response fund. In exchange, he conceded what was always constitutionally true: pipelines are federal jurisdiction, B.C. lacks the authority to stop one, and the province will not go to court to fight it.
For her part, Smith seems to have accepted that a southern route the only way a new pipeline was going to get to the B.C. coast. The proposed line would run roughly 1,200 to 1,250 kilometres from Bruderheim, northeast of Edmonton, to the Roberts Bank Terminal in Delta. It would follow the existing Trans Mountain corridor at an estimated cost of $35.2 billion to $43.7 billion, with completion pegged between 2032 and 2034. The expected capacity is a million barrels a day, bound for Asian markets, and construction could begin as early as September 2027. The Major Projects Office has until October 1 to designate it a project of national interest, but it is hard to see how it would refuse.
Then there is the ownership structure, which deserves a long look. The federal government (through Trans Mountain Corp.) and Alberta (through the Alberta Petroleum Marketing Commission) would be majority owners; Pembina Pipeline takes a 10 per cent stake through construction, with an option to rise to 20 per cent once the line is operational. Pembina, notably, retains full discretion over its final investment decision and will not risk its own capital before then. After a year of both governments vowing to hold out for a private proponent, the private proponent’s exposure rounds to a dime on the dollar, exercisable after the risk is gone. The rest is you, the taxpayer.
Two more pieces completed the package: Ottawa, Alberta, and the Oil Sands Alliance have agreed on terms to launch the Pathways carbon capture project, projected at 16 million tonnes of emissions reductions per year. This was the condition attached to last year’s Carney-Smith MOU. And the $10 billion in Roberts Bank upgrades that Carney announced beside Eby just happens to be the terminus of the pipeline announced beside Smith, a connection Carney declined to draw out loud.
So, what was agreed this week, then is a route, a terminus, a builder, a fast-track referral, a carbon-capture launch, and, crucially for Carney in the short-term, something approaching provincial peace purchased in both B.C. and Alberta. What was not agreed to is the consent of the up to 125 Indigenous communities along the route, many of whom were consulted about a northern route that is no longer on the table. Still, the country decided to build something this week, and while there will be bumps and snags because there always are, we’ll take this post-Canada Day gift.
Merch
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This week in Building Canada
July 4: On this day in 1886, the first CPR transcontinental passenger train arrived in Port Moody, B.C., completing the journey from Montreal in just over five days and opening the West to commerce.
July 6: Viola Desmond, a civil rights activist and businesswoman, was born on this day in 1914, in Halifax.
July 8: Tom Thomson drowned in mysterious circumstances in Algonquin Park on this day in 1917.
July 9: The Nunavut Land Claims Agreement Act came into force on this day in 1993, completing the ratification of the largest Indigenous land claim settlement in Canadian history and setting the stage for the creation of Nunavut in 1999.
July 10: Thérèse Casgrain is born on this day in 1896. The Quebec suffrage leader became the first woman to lead a Canadian political party.
Tom Thomson (1877-1917)
Tom Thomson is the ghost at the centre of Canadian landscape painting. Born near Claremont, Ontario, and raised at Leith on Georgian Bay, he spent his early career as a commercial artist in Toronto before Algonquin Park remade him. Beginning in 1912 he returned to the paark each spring, working as a guide and fire ranger and painting the bush in quick, loaded oil sketches — birch, burnt hillside, storm-bent pine. The results, worked up into canvases like The Jack Pine and The West Wind, fixed a way of seeing the Canadian North that still governs the national eye. He drowned in Canoe Lake on July 8, 1917, at thirty-nine, in circumstances that were never fully explained
Allez les Rouges!
Canada plays Morocco in Houston Saturday afternoon in the first Round of 16 game in Canadian history. We are serious underdogs against the 7th ranked Moroccans, but regardless of what happens it has been a great run, great fun, and hugely inspiring.
Extreme Canada
Canada does not need to become something else to compete. It does not need to abandon its character to achieve scale. The path forward is not to resolve the contradiction, but to lean into it—to recognize that the tension between humility and enormity is precisely what makes this country capable of extraordinary things. — Eliot Pence
What else we’ve been reading
Dominion Dynamics has raised $100 million, which CEO Eliot Pence is billing the Series A as the largest "in the history of Canadian defence”.
Can four SFU grads remake the electricity market with old EV batteries? Moment Energy bundles discarded batteries into packs that can store power for when it's most needed.
Located in Ashibetsu, Hokkaido is 'Canadian World', a replica of an old Canadian village, inspired by fictional Avonlea in Anne of Green Gables
Policy research we need: A new C.D. Howe memo on how to rein in Canada’s out-of-control tipping culture.
A new poll finds Canadians feel morally superior to Americans.
The Globe and Mail’s Barry Hertz has ranked the top 100 Canadian movies of all time. Strange Brew ftw.
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This announcement is a step in the right direction but still punts on addressing the big issues:
-a nebulous group whose authority is partially based on heredity still exerts control over where and how major projects progress. The additional political considerations place Canada at a competitive disadvantage and, more importantly, assault democracy.
-a deal to pay BC royalties to allow goods to transit the province sets bad precident. The Feds either guarantee unrestricted movement of goods, services, people and capital interprovincially or they lose the authority to exist. Allowing Quebec to interfere with electricity transmission from Labrador is another affront to confederation
-the market does not value decarbonized oil. The industrial carbon tax and CCUS requirements are an expensive stunt to keep the Liberal base on side that will limit the economic returns on the pipeline. If the Liberals truely valued climate action, they would impose the same requirements on oil imported to refineries in NB and QC
we used to lead not follow https://world-nuclear.org/information-library/country-profiles/countries-a-f/canada-nuclear-power With the demand for energy ever increasing we probably need more of these https://world-nuclear.org/information-library/current-and-future-generation/small-modular-reactor-smr-global-tracker . https://inl.gov/trending-topics/microreactors/ but leadership has gone downhill over the past decade or so, so toxic so many just looking out for one thing-themselves.
instead we are going to stick a straw up our rear ends and over inflate the economy again for a short time then be left with mounting debt as we over inflate the economy again. Wing it hope for the best. Not much wisdom, nor vision nor real mission just quick buck thinking. Quick buck money making machines die hard and fast in debt we need real exports to grow real science and engineering we have enough over priced pencil pushers and loan sharks we have enough shoppers we need doers