When Prime Minister Mark Carney announced last November he would support a massive new oil sands pipeline to the west coast, he presented the deal as a win for the climate alongside the economy.

As part of the Memorandum of Understanding (MOU) Carney signed with Alberta Premier Danielle Smith, his government agreed to help support construction of a $16.5 billion project designed to capture carbon emissions from the oil sands industry and then bury those emissions underground.

Carbon capture and storage (CCS) technology has a long track record of failed projects and missed targets worldwide and is considered a false climate solution by many experts and environmental advocates.

But Carney claimed at the time that the CCS project, advanced by the oil industry group Pathways Alliance, would “drive down our emissions.” A federal government backgrounder on the agreement stated that the technology would assist in “making Alberta oil among the lowest carbon intensity-produced barrels of oil in the world.”

The Carney government made this bold announcement about the climate potential of CCS while only having “very limited” data about how much the Pathways Alliance project would cost and whether it was technically feasible, according to Department of Finance briefing notes ahead of a September 2025 roundtable meeting in Edmonton that DeSmog obtained.

“The [Pathways] project is at a very early stage of development, with few front end engineering (FEED) studies done and initial cost estimates based on very limited project information,” read the notes, which were released following a public records request.

Despite the government’s knowledge gaps around carbon capture, Carney went ahead and made the technology central to his climate plan. And in exchange for Alberta agreeing to support carbon capture, his Liberal government signed off on a potential new west coast pipeline that could transport 1 million barrels of oil per day to Asian markets.

As part of that deal, Carney also axed a proposed emissions cap on the oil sands, a rollback that his government seems to have privately previewed to oil producers months before the MOU announcement.

“We welcome suggestions on how to ensure emission reductions are achieved in the oil and gas sector, and in the oil sands in particular, without imposing a cap on production,” the notes read.

Asked by DeSmog about that specific discussion, a Department of Finance spokesperson explained in an emailed statement that the government “was seeking feedback from oil and gas companies who claimed that the proposed oil and gas emissions cap would cap production and be counter-productive to emissions reduction goals.” 

“The goal of the roundtable was to gather more information from key stakeholders across the energy sector in Edmonton about the pressing challenges they are facing,” the spokesperson added.

Pathways Alliance didn’t respond to DeSmog’s request for comment.

Minister Meets With Oil Executives

The briefing notes obtained by DeSmog were created to provide “speaking points” and background to Liberal Minister of Finance François-Philippe Champagne as he prepared for a September 2025 meeting with top oil and gas executives in Edmonton, Alberta.

The executives had been invited to provide input on the Carney government’s upcoming federal budget. “What are the most pressing challenges facing your sector?” Champagne planned to ask, along with “What top priorities would you like to see reflected in the next federal budget?”

This was part of a series of 50 roundtables led by cabinet officials in 27 cities across every Canadian province and territory. “These consultations are a staple of the annual budget process and the input received helped guide Budget 2025,” the spokesperson explained. 

Industry attendees at the event would include leaders from the Canadian Association of Petroleum Producers, Cenovus, Suncor, Imperial Oil, ARC Resources, Tourmaline Oil, Enbridge, Canadian Natural Resources, ConocoPhillips, TC Energy, Pembina Pipeline, Southbow, and TransAlta.

Champagne was instructed in the briefing notes that the executives would request substantial changes to Canada’s climate regulations at the meeting. The briefing notes reference an open letter published by Canadian oil and gas CEOs in March, where they’d demanded a “rapid, dramatic regulatory restructuring to enable investment in critical oil and gas infrastructure across Canada.”

The finance minister was prepared to reassure them. His Liberal government was working to “boost investor confidence, speed up project development and strengthen the economy by increasing competition and productivity,” according to his speaking points.

He would assure Canada’s oil and gas industry that “the Government of Canada has taken ambitious actions to make sure the resource sector can further contribute to Canada’s economy.”

Limited Knowledge About Carbon Capture

The briefing notes stated that several executives set to attend the Edmonton meeting were members of the Pathways Alliance, which had launched in 2022 with a goal of achieving “net zero emissions by 2050” in Canada’s oil sands industry.

Despite running national ad campaigns touting carbon capture and sending delegates to COP climate summits, Pathways seemed to have made very little actual progress over the years on moving its proposed CCS project forward.

By the time the Edmonton meeting happened last fall, Pathways hadn’t yet begun “detailed engineering and design” on the project or undertaken any preliminary work including “clearing of right-of-ways and pipeline construction and commissioning.”

Yet in early November, the Carney government released its Budget 2025, which extended CCS tax credits by five years, now stretching from 2031 to 2035. “Updates will be provided in due course as work advances on the project,” the spokesperson wrote.

Later in November, however, despite lacking basic information about how the project would be funded and engineered, the Carney government assured the country that carbon capture would result in “some of the lowest carbon-intensity oil produced in the world.” 

Why was Carney so intent on a pipeline deal that hinged on financially uncertain and largely unproven climate technology?

According to the prime minister’s former Chief of Staff Marco Mendicino, climate has always been a secondary concern. A key goal for the Carney government, Mendicino explained at a Toronto conference in January, is “to increase our oil production.”