The political honeymoon appears to be ending for Finance Minister Mark Carney as he navigates what insiders are calling his “two-front war” — balancing Bay Street expectations with mounting frustration from Western Canada over pipeline development.
Last Thursday’s confrontation at the Calgary Chamber of Commerce event highlighted growing tensions, as Carney was interrupted by protesters while defending the government’s decision to delay approval on the Northeastern Gateway expansion project. The moment captured what many Albertans view as a betrayal of previous Liberal promises to support responsible resource development.
“When Minister Carney says he understands the energy sector’s concerns, but then delays critical infrastructure with more studies and consultations, it feels like Ottawa speaking out of both sides of its mouth,” said Melissa Jackson, energy policy director at the Calgary Chamber of Commerce. “These projects represent jobs and investment that communities have been counting on.”
The controversy stems from Cabinet’s October decision to extend environmental reviews on the $8.4 billion pipeline expansion by an additional eight months. This project would increase capacity for shipping Alberta crude to Pacific markets by nearly 590,000 barrels daily, potentially closing the persistent Western Canadian Select discount that costs the economy billions annually.
Premier Danielle Smith didn’t mince words in her response to the delay. “This is precisely why Albertans have trust issues with Ottawa,” she told reporters at the provincial legislature. “The regulatory goalposts keep moving after companies have already met every requirement previously established.”
Public polling suggests the issue is galvanizing opposition to the Liberal government across the Prairies. A recent Angus Reid survey found 73% of Albertans disapprove of the federal government’s handling of pipeline policy, with similarly high dissatisfaction in Saskatchewan at 68%.
For Carney, the timing couldn’t be more challenging. Just four months into his role as finance minister, he’s attempting to establish economic credibility while managing political fallout from what critics call a “status quo” fall economic statement that failed to address affordability concerns.
“Carney is trying to be both Bay Street’s champion and the voice of progressive climate policy, but that balancing act is becoming increasingly difficult,” noted Shachi Kurl, President of the Angus Reid Institute. “The pipeline issue touches deep nerves about regional alienation that have consistently troubled this government.”
Indigenous perspectives on the pipeline controversy reflect the complex nature of the issue. While some communities have signed benefits agreements supporting the expansion, others remain opposed.
“We’ve spent five years negotiating in good faith, creating unprecedented environmental protections and economic opportunities for our community,” said Chief Robert Crowfoot of the Siksika Nation, which signed a partnership agreement with the pipeline developer in 2023. “These delays put all that progress at risk.”
Meanwhile, environmental groups applaud the government’s caution. “Given what we know about climate impacts, any major fossil fuel infrastructure deserves comprehensive review,” argued Emma Richardson of Climate Action Network Canada. “This isn’t about politics—it’s about getting the science right.”
The controversy has rekindled discussions about Canadian federalism. Former Bank of Canada governor Stephen Poloz, speaking at a Toronto economic forum last week, suggested the ongoing pipeline battles demonstrate “structural weaknesses in how we make national economic decisions that affect different regions.”
For everyday Albertans, the issue hits close to home. At a Tim Hortons in Red Deer, I spoke with James McPherson, a third-generation oil worker currently between contracts.
“I’ve voted Liberal in the past, but this feels personal,” McPherson told me, stirring his coffee. “We keep hearing about just transition and greening the economy, but my kids need to eat today. These projects mean real jobs for people like me.”
Back in Ottawa, government insiders suggest the Prime Minister’s Office is closely monitoring the political fallout. One senior Liberal strategist, speaking on condition of anonymity, admitted the government underestimated the reaction: “We thought the environmental review extension was a reasonable compromise, but it’s clearly touched a nerve beyond what we anticipated.”
For Carney, whose political ambitions are widely speculated to include eventually seeking the Liberal leadership, the pipeline controversy presents a defining challenge. His ability to navigate these competing regional interests may determine whether he can translate his technocratic credentials into broader political appeal.
“Minister Carney has to decide if he wants to be remembered as the finance minister who prioritized careful process or the one who got things built,” said Martha Hall Findlay, former president of the Canada West Foundation. “Right now, he’s at risk of being remembered as neither.”
As Parliament rises for its winter break next month, the government faces difficult choices about whether to accelerate the review process or weather the political storm in hopes that economic benefits from other initiatives will overshadow the pipeline controversy.
Either way, Carney’s handling of this “two-front war” will likely define the next chapter in his political career and shape Liberal fortunes in Western Canada for years to come.
