There has been a fair volume of diluted bitumen through the pipeline since we last checked in on the threats of separation coming from Alberta. As discussed here, Premier Danielle Smith, backed by Preston Manning, was warning that a re-elected Liberal government must meet Alberta’s oil and gas industry demands or face “an unprecedented national unity crisis.” 

Sure enough, a Liberal government has been re-elected and now Smith is doing her worst to whip up a crisis, playing footsie with separatists and torquing up disagreements with Ottawa over energy.

Just one day after the federal election, Smith’s United Conservative Party government tabled a bill reducing from 600,000 to only 177,000 the number of signatures needed to force a provincial referendum on separation. Then she delivered a 20-minute address reprising the list of demands presented last month to Mark Carney and embellishing those with several wild claims. 

She told Albertans that for the past ten years the Liberal government and its NDP allies “have unleashed a tidal wave of laws, policies and political attacks” aimed at Alberta’s economy – i.e. the petroleum industry. According to Smith’s version of events, among other things the Liberals have blocked new pipelines, cancelled multiple oil and gas projects, banned tanker ships needed to transport oil to new markets, and “stacked” an oil and gas cap on top of a carbon tax – actions which have “scared away global investment to the tune of half a trillion dollars.”

The former oil industry lobbyist went on to butter up the separatists, saying that given all of the above it’s understandable that some Albertans are calling for separation. “A large majority of these individuals are not fringe voices to be marginalized or vilified. They are loyal Albertans…who have just had enough of having our livelihood and prosperity attacked by a hostile federal government. They’re frustrated. And they have every reason to be.”

It is possible to challenge Smith’s claims. For example, at most only one pipeline – Northern Gateway – has been blocked, and it had been stopped by the courts before the Trudeau government put it out of its misery nearly a decade ago. Aside from that, there are no other known examples to support Smith’s claim that “multiple oil and gas projects” were cancelled by the the feds. And without Northern Gateway, the issue of oil tankers off the north coast of British Columbia seems moot. Smith also misrepresented the impact of the proposed emissions cap on oil and gas production, overlooking the Parliamentary Budget Office’s conclusion that production can increase despite the proposed cap. 

However, as misleading as it was, what she included in her You Tube diatribe was no more important than what she left out, starting with Ottawa backing down on the consumer carbon tax, described by Smith’s ally Pierre Poilievre as precursor to “nuclear winter.” No credit to the feds for that concession, or for many other facts that get in the way of the story Smith wants to tell, such as: 

  • Smith made no acknowledgement of the impact on the industry of a decade of depressed petroleum prices worldwide;
  • There was no reference to the multi-billion-dollar TransMountain pipeline expansion financed by the federal government in an effort to get a higher price for Alberta oil exports;
  • Smith made no mention of climate change and the fact that much of the “tidal wave” coming from Ottawa is part of Canada’s commitment to reduce Greenhouse gas (Ghg) emissions from fossil fuels – a commitment supported in the past by Alberta and the petroleum industry.   

Danielle Smith is not the only one failing to tell the whole story of Alberta’s fight with Ottawa. Poilievre, for example, says he’s against Alberta separation, but then goes on to support Smith’s narrative. He claims that  Alberta’s oil and gas industry had been “under attack” for the last decade and “frankly, Albertans have a right to be frustrated.” In a similar vein, Doug Ford told the media that he has advised Mark Carney to “start showing some love to Alberta and Saskatchewan…the last prime minister showed no love, matter of fact, to the contrary.” 

Destructive political myths can be created not only by magnifying certain events, but also by ignoring facts that challenge the mythology. With that in mind, let’s consider some of the facts and context missing from the tale being told by Smith and supported by those like Poilievre and Ford. 

Factcheck #1- Impact of low oil prices 

Oil price data by Macrotrends, found here, show that oil sands development in the early part of the 21st century coincided with a rapid increase in oil prices beginning around 2002 and peaking above $200 U.S. a barrel in June 2008, just before the Great Recession. Prices recovered fairly quickly, and between 2009 and 2014 the West Texas Intermediate (WTI) price ranged between $120 and $140 a barrel. 

But prices fell sharply in 2014 and aside from a brief post-pandemic spike, never approached levels reached pre-2014 during the entire ten years Trudeau was in power. Nevertheless, Alberta oil production increased by more than 20 percent between 2017 and 2025 and after losing money immediately following the price drops of 2014-15, the industry bounced back. According to Statistics Canada, oil and gas companies recorded record profits in 2022 and averaged profits of $45 billion a year between 2021 and 2023. Most of the profits went to pay dividends or to buy back shares, with less going to capital investment, which has been in decline since 2014.   

So life in the oil patch has been a bit challenging over the past decade – particularly in contrast to boom conditions prevailing during most of the years the Harper Conservatives were in power. But to blame that on Liberal policies while ignoring the boom and bust cycle inherent in a fossil fuel based economy is dishonest and an example of partisan politics at its worst.

Making the economic picture for Alberta oil more challenging during the Trudeau years is the fact that product from the Alberta oil sands, known as Western Canada Select, sells at a discount to U.S. refineries. For example, this May 15, when the benchmark WTI price was around $62 U.S. a barrel, WCS oil was selling for just over $50. Ten years ago the discount was even higher, a situation contributing to another important factor Smith chooses to ignore – expansion by the federal government of the TransMountain pipeline.

Factcheck #2- TransMountain Expansion 

The Trudeau government spent a lot of political capital and even more of the real stuff – $34 billion – to purchase the pipeline running from Edmonton to Vancouver and expand its capacity nearly three-fold. The notion then – and it lingers today – was that increasing the capacity of a pipeline to tidewater would allow Alberta producers to get a better price through improved access to markets outside the U.S. TransMountain expansion was opposed by First Nations, environmentalists, the British Columbia NDP and the mayor of Vancouver. After the Liberals decided to press ahead regardless, cost overruns during construction were a continuing political headache. 

But although TransMountain may be a disaster for the environment, Indigenous rights  and country’s books, it is a win for the oil industry.  According to the chief economist for Alberta’s credit unions, Alberta Central, the expanded pipeline has had a positive impact since going into service in May, 2024. According to Charles St-Arnaud, non-U.S oil exports doubled during the second half of 2024, narrowing the price differential between WCS and West Texas, increasing revenues to Alberta producers by about $7 billion US. But there’s no mention of these benefits to the oil industry from Danielle Smith and her supporters like Preston Manning. Their focus is on construction delays and cost overruns, which of course they blame on the federal government. 

Factcheck #3- Climate Policy

One of the more astounding aspects of the current discussion about energy and resource development is the absence from the debate of any reference to climate policy as a factor in federal regulation of energy. This head-in-the-oil-sands affliction isn’t limited to Smith – it’s rarely mentioned in the mainstream media –  but she’s probably the worst. Her manifesto made no mention of federal regulation of fossil fuel emissions as a response to climate change. But as many now seem intent on forgetting, Canada is committed to reducing greenhouse gas emissions 40 to 45 percent below 2005 levels by 2030. That’s a target that is only somewhat more ambitious than the 30 percent reduction by 2030, which we should remember, was pledged by the Harper government in May, 2015.

Latest available data show that Canada is a long way from reaching either target – in 2023 Ghg emissions were down only 8.6 percent from 2005. The main reason for the modest national decline is an increase in emissions of 4.8 percent in Alberta, the source of 38 percent of the country’s Ghg emissions. Alberta’s increase can be attributed to oil and gas, up from 194 to 208 million tonnes between 2005 and 2023 – all of that the result of a 27 percent rise in emissions from the oil sands.

By refusing to acknowledge that the federal government, on behalf of all Canadians, has a responsibility to regulate emissions from oil and gas, Smith leaves the impression that federal initiatives are nothing more than an attack by eastern-based Liberals on Alberta and its beloved oil industry. That’s a long way from the truth. The TransMountain expansion is just one example of how the federal Liberals have actually put the interests of the oil industry – and Alberta – ahead of achieving its Ghg reduction targets.

Reneging on the “grand bargain”   

Liberals long ago made amends for damage inflicted by Pierre Trudeau’s National Energy Program with the Chretien government’s strong support through subsidies and tax breaks for oil sands development – policies pursued in spite of our international commitment through the Kyoto Accord to reduce emissions. Later, much of the policy framework followed by Justin Trudeau’s government was developed in conjunction with the oil industry and a formerly cooperative Alberta government.

In his 2018 book The Big Stall: How Big Oil and think tanks are blocking action on climate change in Canada, Donald Gutstein recounts how, with the emergence 20 years ago of global warming as a political issue, big business stepped up to figure out how to cut fossil fuel emissions while protecting corporate profits. Acting through the Canadian Council of Chief Executives, a task force of CEO’s, including some from Big Oil, produced a report in 2007 entitled Clean growth: Building a Canadian Environmental Superpower. (Sound familiar?) It called for a national energy plan, carbon reduction targets, investment in technology and rational carbon pricing.

Stephen Harper, in power from 2006 to 2015, didn’t buy in. He liked the “clean energy superpower” idea, but mainly as a slogan to persuade European governments not to label oil sands products as high emission. But on the details, Harper opposed carbon pricing and was unable to work successfully with Provinces or First Nations to expand export capacity with new pipelines. (His government’s 2015 adoption of the “30 percent cut by 2030” was akin to a death bed repentance).  

The Alberta-based, pro-oil Harper Conservatives were in power for more than nine years but failed to make progress on the problems – aside from low prices – seen to be holding back full development of the oil sands. After toppling the Harper Conservatives the job of greenwashing an expansion of the petroleum industry fell to Justin Trudeau. As Donald Gutstein explained, Trudeau was fortunate to find a partner in the endeavour, Rachel Notley, NDP premier of Alberta freshly elected on a platform promising action to lower greenhouse gas emissions. As described here, the result of their collaboration was an approach balancing carbon pricing and pipeline expansion. As I wrote in 2019:

During its four years in power, the Notley government pursued “balance” – literally to a fault. Its policies on carbon emissions were devised with the help of a committee composed of two oil industry reps (one management, one union) and three believers in the fairy tale notion that oil sands expansion and environmental protection could go hand in hand.

The policy package they produced consisted of a carbon tax and a phase-out of coal-fired electricity in return for eventual federal pipeline approval and a green light for a 40 per cent increase (spun as a 100 megatonne ceiling) on carbon emissions from the oil sands. The trade-off was popular enough with Big Oil that four of its major honchos were among those who joined Rachel Notley on stage on Nov. 22, 2015 to announce the Alberta Climate Plan. Leading the quartet was Calgary billionaire wheeler-dealer Murray Edwards of Canadian Natural Resources who expressed appreciation for “the strong leadership taken today by Premier Notley.”

Ex-Liberal cabinet minister John Manley, who was head of the Canadian Council of Chief Executives in 2015 was just as enthusiastic as Murray Edwards, describing the arrangement as a “grand bargain” – acquiescence to a price on carbon by Alberta in return for pipeline construction. 

Unfortunately, the right-wing opposition coalition constructed by Jason Kenney saw no need to keep up Alberta’s side of the bargain. The United Conservative Party and its federal Conservative collaborators exploited economic anxiety about low oil prices, popular opposition to the carbon tax and frustration over delays in pipeline construction to their political advantage. They would eventually get their pipeline, but after defeating the Notley government in 2019 Kenney mounted an all-out attack on consumer carbon pricing, emission caps or more stringent environmental impact assessments. Kenney also set up a silly “war room” to browbeat anyone daring to criticize the fossil fuel industry. But the Conservatives’ most enduring tactic was to demonize Trudeau and his post-2021 Environment minister, Steven Guilbault as enemies of Alberta.

Danielle Smith, presumably catering to the far right of her party, is now taking Kenney’s approach to a dangerous new level. She is encouraging separatist sentiment by promoting myths exaggerating past wrongs, real and imagined, while ignoring facts. Those like Pierre Poilievre who do the same while playing lip service to national unity are not much better. Ian Urquhart, emeritus professor of political science at the University of  Alberta recently wrote the following in The Conversation, and I’ll end on that note.

…in politics, fanciful stories can be dangerous. Some weaponize myths, using the fictions at their core to encourage followers to let falsehoods rule their behaviour. That seems to be playing out yet again in Alberta. We must demand better from the political class.

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