By Tammy Nemeth and Ron Wallace
Prime Minister Carney’s January 2026 Davos speech highlighted a “rupture” in the global order, a vision that defined a new role for middle powers like Canada. Subsequently, after securing a much-coveted majority, he made an open call welcoming policy ideas and recommendations from Canadians.
For more than a year, we’ve set out, repeatedly and in detail, concrete steps needed to restore Canada’s energy sector. If the Prime Minister is serious about engaging with Canadians, the Government of Canada should carefully consider the repeal of rules that prevent the growth of homegrown Canadian energy.
The damaging energy policies enacted during the “lost decade” of the Trudeau government have been followed by a steady stream of announcements by the Carney government of consultations, MoU’s and “frameworks”. Regrettably, amid these promises to make Canada the “world’s leading energy superpower”, precious little actual reform has occurred. Instead, the approach of the federal government has been to continue federal interference and overreach into provincial jurisdictions accompanied by the layering of new rules atop old ones, while carving out special exemptions designed to manage political fallout. There are legitimate questions as to whether this approach is a recipe that will encourage market confidence or national unity.
Most of what has passed for energy policy in Ottawa has been a continued exercise in central planning, not market economics, with measures that tend to invite litigation, not certainty. As a result of these policies, new investments in Canada collapsed between 2015 and 2024 as Canada experienced the largest capital exodus in its history. An estimated $1 trillion of investment capital departed Canada for other jurisdictions. By 2020, approximately $150 billion in energy and resource projects had been delayed or cancelled. The RBC Economics & Thought Leadership analysis (BBC Growth Project), attributed this exodus to “burdensome regulatory, permitting and project delivery barriers.”
For Alberta’s oil and gas sector, the much-touted Memorandum of Understanding (MOU) increasingly appears to be anything but a breakthrough. Instead of certainty, the MoU provides a patchwork of conditions and caveats with industrial decarbonization targets that are both costly and unproven; approvals that hinge on the consent of Indigenous leaders and British Columbia; the continued existence of a federally-imposed tanker ban; strict methane emissions rules; and a host of other moving parts. All pose significant challenges to economic progress.
If Canada is to become a genuine energy superpower, the new Carney majority government should consider the repeal of key federal laws and regulations that undermine reliable, affordable energy and that intrude on provincial authority. The Canadian Net-Zero Emissions Accountability Act remains as a major economic barrier with conflicting messaging of rigid legal processes for setting targets, but no enforceable duty to achieve the actual numerical reductions. Nonetheless, these mandatory emissions reduction plans lock Canada into an inflexible ideological framework that ignores economic reality and technological limits. Instead, the Government of Canada needs to send a clear signal that federal policy will prioritize affordability, reliability and export potential over a single emissions trajectory.
Next, the Impact Assessment Act must be significantly revamped, as it has become a magnet for lawsuits that pose chronic bottlenecks for major projects. It must be recognized that the 2030 Emissions Reduction Plan imposes unrealistic targets that disregard Canada’s strengths in hydrocarbons, hydro and nuclear generation while driving up costs for families and industry. The Clean Fuel Regulations, layered atop provincial regimes, add unnecessary costs and complexities with little real benefit while the Clean Electricity Regulations represent a clear violation of provincial constitutional jurisdiction under Section 92A. Additionally, Bill C-18 (the Oil Tanker Moratorium Act) remains as a substantial barrier to market access for Western Canadian oil to tidewater. While the recent (2026) Canada-Alberta Methane Equivalency Agreement, one that requires a 75% methane reduction by 2035, allows Alberta to use its own methane regulations instead of federal CEPA methane rules, it is estimated that the costs of compliance will approach $14.6 billion.
In short, these regulations constitute duplicative compliance burdens that hinder competitiveness and impose non-competitive costs without delivering proportional environmental gains. Carve-outs and exemptions are not governance: Instead, they are an admission that the rules are fundamentally broken. If a rule is so onerous that entire sectors need to be exempted, the rule should be repealed, not patched. In the case of Alberta, these directed federal climate initiatives pose material challenges to its future prosperity.
As Canadian legislators have enacted laws and regulations that have swung widely across the spectrum of economic and environmental interests, major energy projects have been cancelled as investment capital has sought more certain, or at least more predictable, markets outside Canada. No less a victim of these political swings was the National Energy Board (NEB), one of the globes’ most efficient regulators of pipelines that led to it being “modernized” only to be replaced by a far less-independent Canada Energy Regulator (CER).
Industrial proponents have expended hundreds of millions of dollars in a complex Canadian political, legal and regulatory environment only to face final decisions reached behind closed doors with undisclosed rules and standards. It remains to be demonstrated if these concerns will be alleviated by the Major Projects Office or if it is yet another continuation of Ottawa’s policy of central planning.
Crucially, a market-based approach should be based on a respect for the constitutional rights of the provinces who are best placed to manage their development. Federal intrusions, whether through environmental “backstops” or national energy strategies, only create duplication, confusion and delay. Ottawa’s job should be to facilitate, not dictate, resource development while enabling interprovincial trade that supports national infrastructure.
Ottawa’s recent announcement of intentions to transform the country’s electricity system is yet another example of a centrally-planned energy future for Canada in which a forced adoption of energy policies is proposed to include wind, solar, batteries and EV’s with supply chains that largely originate outside Canada. These policies ultimately erode national security, undermine economic growth, and cede strategic leverage to foreign powers. Canadians should not be forced to trade affordable, reliable domestic energy for intermittent sources that rely on foreign minerals and manufacturing. When the federal government overreaches with sweeping national targets, it undermines local decision-making, creates regulatory confusion and invites costly delays.
The path forward to Canadian energy superpower status will require the federal government to focus on technical mandates, not activist theater, while respecting provincial jurisdiction over natural resources while building the infrastructure required to connect Canadian energy to global markets. In short, let the market, not Ottawa, decide which technologies and projects deliver economic and strategic value. Canada’s prosperity depends on a system where private investment, local knowledge, and market signals drive decisions—not ministerial edicts or politically motivated carve-outs. Carney’s majority is an opportunity. It is a chance to stop announcing, start acting and show that Ottawa trusts the provinces and the market.
Tammy Nemeth is a U.K.-based energy analyst. Ron Wallace is a Calgary-based energy analyst and former Member of the National Energy Board. They are Canadians who believe in a market-based, constitutionally respectful path to prosperity.
Source: EnergyNow
