Canada’s climate policy landscape shifted sharply this week after federal climate minister Steven Guilbeault resigned from cabinet in response to a new energy agreement between Ottawa and Alberta. The memorandum of understanding sets out a pathway for one or more privately financed pipelines that would transport Alberta oil to the Pacific coast, potentially expanding access to Asian markets. It also raises the prospect of modifying northern British Columbia’s tanker restrictions if the project is designated as being in the national interest, a change that would reshape long-standing coastal protections.

The pipeline deal is part of a broader recalibration of federal climate policy. In recent weeks the government has moved away from several measures Guilbeault had championed, including the planned emissions cap for the oil and gas sector and elements of consumer carbon pricing. 

While Ottawa reduced the consumer carbon tax to zero, it strengthened industrial carbon pricing and methane rules. In negotiations with Alberta, the federal government agreed to eliminate the proposed emissions cap in exchange for Alberta tightening its own industrial carbon-pricing system. Federal regulators have also paused the 20 per cent electric-vehicle sales requirement for 2026 while reviewing the longer-term targets of 60 per cent by 2030 and full adoption by 2035.

Guilbeault, long associated with environmental advocacy and regulatory expansion, has kept his seat in Parliament but left cabinet over the direction of national energy policy. His departure underscored growing divisions within the governing party around how the country should balance resource development, climate commitments and regional demands.

The proposal has drawn particular concern in British Columbia, where Premier David Eby has consistently questioned the viability of new heavy-oil pipelines to the coast. Eby has argued that the province must protect its coastline, uphold Indigenous rights and avoid projects that lack credible private proponents. His position has been reinforced by push back from Indigenous communities in what they describe as limited consultation in the early stages.

Guilbeault’s resignation, combined with British Columbia’s firm resistance, casts uncertainty over whether the new federal-Alberta plan will translate into an actual project.