Carney was iffy on a pipeline. Now his government’s building one itself. Here’s what changed his mind

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It’s a far cry from Carney’s comments in April 2025, when he told a Quebec talk show that he wasn’t even sure Canada should prioritize an oil pipeline as a major project of national interest. “We have to choose a few major projects, not necessarily pipelines, but maybe pipelines: we’ll see,” he said on the popular show Tout le monde en parle.

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In November he signed a memorandum of understanding with Alberta Premier Danielle Smith agreeing to work towards a pipeline to diversity exports to Asia. But, as he told a Calgary Chamber of Commerce event that month, “the Asian pipeline will be a private sector project.” In order to attract private capital, the prime minister at the time said he favoured “de-risking” the pipeline by, for example, removing regulatory burdens such as the proposed oil and gas emissions cap, or helping First Nations take direct financial stakes in the project through loan guarantees.

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What prompted such a dramatic over such a short period included the outbreak of a Persian Gulf war in February 2026, which eventually led to Iran blockading the Strait of Hormuz, a major shipping channel for Saudi Arabia and other major Middle East producers, stranding oil exports and driving up prices.

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As the first U.S. and Israeli strikes on Iran hit in February, Carney was arriving in India as part of a major diplomatic reset, which included high-level meetings between his government and Indian industry executives who said that they wanted Canada to supply them with more energy, including oil. On the prime minister’s next stop in Japan in early March, he heard much the same message, as officials representing the island nation said they wanted to diversify their energy supplies through greater imports from Canada.

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In January, Carney had been in China, embarking on another high-stakes diplomatic reset with Chinese President Xi Jinping, where energy trade was a central theme. Days after that, he declared Canada an “energy superpower” at the World Economic Forum.

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Such pronouncements shifted the onus for building new energy infrastructure from Canadian oil producers onto government, said Heather Exner-Pirot, a senior fellow at the Macdonald-Laurier Institute.

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Major Canadian oilsands companies like Suncor Energy, Canadian Natural Resources and Cenovus Energy long ago adapted to an unwelcoming environment where the industry was unable to build major new export pipelines because of roadblocks from regulators and some First Nations groups and anti-oil activists. That led them to focus instead over the last decade on improving the efficiency and profitability of their existing production, delivering growth to shareholders without additional pipelines.

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“Ottawa needs this pipeline more than industry,” she said.

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Canadian producers are also less motivated than Ottawa is to shift their exports away from the U.S., said George Vegh, former chair of the Canada Energy Regulator. While U.S. President Donald Trump’s tariffs on some Canadian products have created broader trade uncertainty, the two countries’ energy sectors remain highly integrated and deeply co-dependent.

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“If you’re a government, (diversifying trade) may be an important political objective,” Vegh said. “But if you’re in the private sector, that’s not really your mandate. Your mandate is to provide shareholder returns.”

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Finding a company willing to sign onto Alberta’s pipeline push became the key challenge faced by Smith, its most prominent champion, and by Ottawa. Leads had gone cold after nearly a decade of policies under former prime minister Justin Trudeau that exuded hostility to Alberta’s resources. Among them: the cancellation of the previously approved Northern Gateway pipeline plan at a massive loss for Enbridge Inc.; onerous new approvals processes for major pipelines; a tanker moratorium off the northwest Pacific Coast; and resistance to the proposed Energy East pipeline to New Brunswick.