No, this is more about Smith misreading the room.
Alberta has long accused Ottawa of trying to destroy its oil industry. Here’s why that’s a dangerous myth
Published: May 8, 2025 7.13am EDT
Author
Ian Urquhart
Ian Urquhart is a Friend of The Conversation.
Professor Emeritus, Political Science, University of Alberta
“Alberta is a place soaked in self-deception.” Those words began Alberta-based journalist
Mark Lisac’s 2004 book aimed at shattering the myths that have unhelpfully animated too much of Alberta’s politics over the past few decades.
Current and former Alberta politicians are once again embracing and treating separatist grievances seriously. That means it’s time once again to highlight and challenge political misconceptions that have the potential to destroy Canada.
Oil is the root of one such myth. The misconception? That Ottawa perenially opposes the oil and gas sector and is determined to stop its continued growth. The
National Energy Program (1980), the
Northern Gateway pipeline project (2016), the
Energy East Pipeline (2017) and the proposed
greenhouse gas pollution cap allegedly prove Ottawa’s hostility.
Notably missing from these grievances is the
Keystone XL pipeline and the
Trans Mountain Expansion Project. Ottawa supported these projects aimed at transporting Alberta oilsands crude to foreign markets. The federal government even purchased the
Trans Mountain project from Kinder Morgan in 2018 — not to kill it, but to build it.
Read more: Justin Trudeau's risky gamble on the Trans Mountain pipeline
As for Keystone XL, Alberta Premier Jason Kenney thanked Prime Minister Justin Trudeau for
supporting the project. This doesn’t fit the separatist narrative, so it’s largely ignored.
A protester holds a photo of an oil-soaked Prime Minister Justin Trudeau during a demonstration against the Kinder Morgan Trans Mountain Pipeline expansion in Vancouver in May 2018. THE CANADIAN PRESS/Darryl Dyck
Oilsands booster
No one should dispute the
National Energy Program’s devastating impact on Alberta’s conventional oil and gas sector 40 years ago. But the oilsands, not conventional oil, propelled Canada to its position as the
world’s fourth largest oil producer.
Has Ottawa facilitated or obstructed the spectacular post-1990 growth of oilsands production?
The record shows that, since the mid-1970s, Ottawa has facilitated and supported the oilsands sector. The federal government helped keep the
Syncrude project alive in 1975 when it took a 15 per cent interest in Canada’s second oilsands operation.
Ironically, Ottawa’s enthusiasm for more, not less, petroleum from the oilsands also appeared in 1980 via the National Energy Program (NEP), the devil in Alberta’s conservative catechism. What most accounts of the NEP don’t mention is that Ottawa
offered tax benefits to oilsands companies while stripping them from conventional oil producers.
Furthermore, the NEP’s “made-in-Canada” pricing effectively guaranteed Syncrude would receive the world price for its production. At $38 per barrel,
Syncrude received more than double what conventional producers received. If the NEP was harsh on conventional oil producers, it helped create a golden future for the oil sands.
In the mid-1990s,
Ottawa helped propel the post-1995 oilsands boom. The industry-dominated
National Task Force on Oil Sands Strategies sought federal tax concessions to promote oilsands growth. The federal government delivered them in its
1996 budget, despite Prime Minister Jean Chretien’s general concern with cutting the deficit.
Again, these measures clearly contradict the myth of federal opposition to the oil industry.
Prime Minister Jean Chretien talks to Syncrude workers at the open pit oilsands mine in Fort McMurray, Alta., in 1996 after he announced the signing of a $5 billion expansion in the oilsands by 18 of Canada’s largest oil companies. THE CANADIAN PRESS/Dave Buston
Generous emissions caps
Ottawa’s policy favouritism towards the oilsands didn’t end there. It has consistently animated the federal government’s treatment of the oilsands in its climate change policies.
The federal
Climate Change Plan for Canada (2002) treated oil and gas leniently. Its measures for large industrial emitters bore a striking resemblance to the climate change policy preferences of the Canadian Association of Petroleum Producers.
Suncor and Syncrude, the two leading oilsands producers, estimated these federal proposals would add a pittance, between 20 and 30 cents, to their per barrel production costs.
Justin Trudeau’s response to Alberta’s 2015 oilsands emissions cap also underlined Ottawa’s favouritism, not hostility, to the dominant player in Canada’s oil patch.
Rachel Notley’s NDP government set this cap at 100 million tonnes of GHG per year, plus another 10 million tonnes allowed to new upgrading and co-generation facilities. This cap was a whopping 39 million tonnes or 55 per cent higher than what the oilsands emitted in 2014.
Alberta Premier Rachel Notley walks past a heavy hauler truck during the Suncor Fort Hills grand opening in Fort McMurray Alta, in September 2018. THE CANADIAN PRESS/Jason Franson
This generous cap contributed to a tremendous increase in oilsands production. Healthy profits became
record profits in 2022. Ottawa embraced Alberta’s largesse, incorporating the province’s cap into its post-2015 climate policies.
Furthermore, Ottawa increased its leniency towards the oilsands by exempting new in-situ (non-mining) oilsands projects in Alberta from the federal
Impact Assessment Act. This exemption applies until Alberta’s emissions cap is reached. Canada’s latest
National Inventory Report on greenhouse gas emissions reported record oilsands GHG emissions of 89 million tonnes in 2023, still 11 million tonnes shy of the 100 million tonne threshold.
Weaponizing myths
Finally, we have today’s proposed national cap on greenhouse gas emissions. Alberta is apoplectic about the cap. But whether or not it’s intentional, Premier Danielle Smith’s outrage feeds into secessionist sentiment by seemingly misrepresenting the cap’s impact on oil and gas production.
Alberta Premier Danielle Smith at a news conference in Edmonton on April 29, 2025. THE CANADIAN PRESS/Jason Franson
Smith and her environment minister use the work of the
Parliamentary Budgetary Officer (PBO) to nurture their “Ottawa hates oil” narrative.
They claim the officer’s analysis of the cap’s economic impact showed it “will cut oil and gas production by five per cent, or more than 245,000 barrels per day.”
This is simply not true.
In fact, the PBO concluded that, with the cap, oilsands production “is projected to remain well above current levels” — 15 per cent higher than in 2022. The proposed federal emissions cap, like the Alberta NDP’s cap of a decade ago, is higher than current oilsands emissions levels. The PBO concluded the proposed ceiling for oilsands emissions would be six per cent higher than 2022 emissions.
Ottawa’s proposed cap, in fact, continues its decades-long support of the oilsands.
Myths are central to our being. When I tell my grandsons about the pot of gold at the end of the rainbow, I hope to inspire curiosity, imagination and interest in their grandmother’s Irish heritage.
But 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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