Weekly Roundup - May 15, 2026
Top Federal Stories
The long-awaited climate and energy MOU between Alberta and Ottawa was finalized this week, advancing plans for a potential new West Coast pipeline while reshaping the political dynamic between Prime Minister Mark Carney and Premier Danielle Smith at a moment of rising separatist pressure in Alberta. Full details below under top Alberta stories.
Following some delays, Prime Minister Mark Carney released his government's new electricity strategy on Thursday. The plan, called "Powering Canada Strong," aims to double national generation and delivery capacity by 2050. It broadens recognition of carbon offsets, adds flexibility for existing gas plants, and makes room for new units in the near term. All changes Carney says are necessary to avoid stranded assets and allow gas to play a complementary short-term role. The strategy lands as Alberta is in court seeking a ruling on the constitutionality of clean electricity regulations. Carney framed the policy shift on natural gas against the backdrop of the legal fight, arguing "it doesn't do us good to be sitting in court all the time with provinces." The plan also commits to energy-saving retrofits for up to one million households and the development of a new transmission investment strategy under the Major Projects Office. Consultations on the strategy will run for four months.
The Liberals are bracing for another Toronto byelection. Beaches-East York MP Nate Erskine-Smith plans to resign this summer to pursue Ontario Liberal politics. A debate is forming inside the federal Liberal party over whether Carney should appoint a candidate for the seat or hold an open nomination. Lawyer Claire Seaborn, former chief of staff to MP Jonathan Wilkinson, is considering a run. MP Wilkinson is resigning to become Canada's ambassador to the European Union, and NDP MP Alexandre Boulerice plans to resign his Montreal seat to run provincially. However, neither departure is likely to change the map in the House as both seats are expected to stay with their current parties.
The federal AI build-out advanced this week. Artificial Intelligence and Digital Innovation Minister Evan Solomon announced $66 million from the AI Compute Access Fund. The money will support companies developing AI applications, with $16.6 million earmarked for eight B.C. projects. A day earlier, Solomon announced federal support for TELUS to expand its sovereign AI data centre footprint in B.C. The projects in Kamloops, Mount Pleasant, and downtown Vancouver will cost roughly $9 billion.
U.S. Ambassador Pete Hoekstra struck an uncharacteristically friendly tone on Canada-U.S. relations this week, even as trade talks over CUSMA remain strained. Speaking at an Armed Forces Day ceremony at the U.S. Embassy in Ottawa, Hoekstra called it "an awesome relationship" and pointed to the last century of close military cooperation between the two countries.
Top Alberta Stories
Announcements released on the Friday before a long weekend are usually reserved for news governments hope Canadians won’t pay much attention to, but today’s Alberta-Ottawa agreement is likely to dominate the national conversation for weeks.
Prime Minister Mark Carney and Alberta Premier Danielle Smith have advanced an energy agreement that could pave the way for a new West Coast oil pipeline as early as 2027. The Implementation Agreement, which finalizes the memorandum of understanding first signed in November 2025, is designed to diversify Canadian energy exports, expand Alberta’s energy production, lower emissions, and replace what both governments describe as rigid regulation with a more investment-focused framework.
Key elements include a revised pricing system that would see Alberta’s headline industrial carbon price gradually rise from $95 per tonne in 2026 to $140 by 2040, the introduction of Carbon Contracts for Difference to support emissions-reduction projects, and a renewed commitment to the Pathways carbon capture project. The deal also establishes an accelerated process for a proposed West Coast pipeline capable of transporting more than one million barrels of oil per day, with Alberta expected to submit a proposal to the federal Major Projects Office by July 1 and Ottawa expected to designate the project as one of national interest by October 1.
Politically, the agreement represents a bit of a gamble for both leaders. Carney is betting that advancing major energy infrastructure alongside emissions-reduction initiatives will strengthen economic confidence while maintaining credibility on climate action. In Alberta, Smith now faces pressure to deliver progress on projects, jobs, investment, and market access after years of defining the province’s relationship with Ottawa through confrontation rather than co-operation.
Want a deeper breakdown of what the agreement means for your sector or organization? We provide our clients with sector-specific analysis and implications. Reach out to learn more.
The agreement lands at a politically delicate moment for Alberta-Ottawa relations, after an Alberta judge struck down the petition seeking a referendum on separation from Canada. Justice Shaina Leonard of the Court of King’s Bench ruled the province failed to adequately consult First Nations on how secession could affect treaty rights.
While maintaining her government supports Alberta remaining within Canada, the Premier condemned the ruling as “anti-democratic” saying the province will appeal. The decision marks a major moment for Alberta’s separatist movement, which had gathered more than 300,000 signatures in support of a vote this fall.
The decision puts the Premier in a difficult position. Separatist organizers are intensifying pressure on the government to place a separation question on the ballot regardless of the ruling as the issue is unlikely to be resolved by the courts before the October 19 referendum. Smith said she needs to meet with her caucus and cabinet before determining next steps. Those meetings are scheduled for next week.
In a legislative session overshadowed by questions about Alberta separatism, the United Conservative government passed 17 major bills touching nearly every area of public policy. The spring sitting ended Thursday after the government advanced legislation expanding private-pay diagnostic health services, restricted sexually explicit materials in public libraries for youth, removed what it describes as “politics and ideology” from classrooms, and pursued trade reforms aimed at reducing barriers between provinces. The government also moved ahead with changes to medical assistance in dying (MAID) eligibility, passed legislation intended to accelerate approvals for major industrial projects, and put forward a bill to redraw Alberta’s electoral boundaries.
The session also marked Opposition Leader Naheed Nenshi’s first full sitting as an elected MLA. The party has struggled to gain political momentum since the former Calgary mayor took over as leader and according to recent polls, spending the spring in Edmonton hasn’t helped. A Janet Brown Opinion Research poll for CBC News suggests that only 20 per cent of Albertans rate themselves “very impressed” with the Opposition leader. That not only stands behind the 34 per cent who feel that way about the premier, but it’s down from the 27 per cent who were enthused about Nenshi in the same poll last spring. The Alberta legislature is scheduled to return on Oct. 27.
Top Ontario Stories
Ontario’s Auditor General released four special reports on Tuesday. In one report on the use of artificial intelligence in the Ontario government, the Auditor General found that roughly 12,000 Ontario public servants accessed approximately 400 AI websites between April and August 2025, and that about 60 per cent of those sites were rated unsafe or unsecured by the government’s own cybersecurity software. The ministry responsible had not implemented security controls to prevent staff from uploading Ontarians’ personal information such as health card numbers, driver’s licences and credit card data, to unvetted platforms. She also raised concerns about the adoption of medical AI scribe software, finding accuracy concerns with some systems. Only three per cent of Ontario Public Service staff have completed responsible-use-of-AI training, which remains voluntary.
A second report examined commercial truck driver training. Investigators found that some private career colleges delivered only part of the required training hours, with students never taught key manoeuvres including emergency stopping. The ministry had never inspected 25 per cent of the career colleges offering commercial truck driver training, and six unregistered colleges previously investigated by the province were still booking tests and issuing certificates. Despite representing only three per cent of vehicles on the road large commercial trucks accounted for 12 per cent of vehicles involved in fatal collisions in Ontario from 2019 to 2023. Colleges and Universities Minister Nolan Quinn said all colleges offering the training will be inspected. The auditor general’s remaining two reports flagged lengthy wait for families to receive support payments through the Family Responsibility Office, and a special education funding system falling behind rising needs.
In a blow to Ontario’s auto sector strategy, Honda announced it is indefinitely suspending its $15-billion electric vehicle and battery complex in Alliston. The project was paused for two years last May amid tariff uncertainty and softening EV demand. The shift from “pause” to “indefinite suspension” effectively shelves a complex that was expected to create roughly 1,000 manufacturing jobs. Honda recorded its first ever full-year loss in company history – driven in part by a 27 per cent year-over-year decline in North American EV sales – and said it is pivoting toward hybrids. Up to $5 billion in combined federal and provincial subsidies had been earmarked for the project, but none has been distributed; the Ontario government confirmed that no public funds will flow while Prime Minister Mark Carney called the news “disappointing.”
The Scarborough Southwest provincial Liberal nomination continues to generate fallout. Federal Liberal MP Nate Erskine-Smith, who lost the May 9 vote to Ahsanul Hafiz by 19 votes, filed a formal appeal alleging irregularities. Erskine-Smith’s allegations include claims that 34 more ballots were counted than voters recorded and inconsistencies in proof-of-identification requirements. The Ontario Liberal Party has stood by the result. In interviews, Erskine-Smith said a provincial leadership bid is now “much less likely,” citing not just the outcome but how it was reached, and confirmed he will step down as a federal MP by the end of June regardless. Separately, Etobicoke–Lakeshore MPP Lee Fairclough – who entered the leadership race on May 8– is positioning her leadership bid around healthcare wait times, mental health and education affordability.
The Ford government spent the week juggling political distractions including ongoing fallout from the province’s transparency law reforms. In another saga, documents released Wednesday by the Premier’s office confirmed taxpayers are on the hook for nearly $200,000 in ancillary costs tied to the $28.9-million private jet the government purchased from Bombardier and subsequently sold back earlier this spring. The legislature is scheduled to rise June 4, leaving the government just two sitting weeks to advance its remaining legislative agenda. While new polling from Léger has the PCs holding a tight lead at 39 per cent among decided voters, to the Liberals at 34 per cent and the NDP at 17 per cent, most Ontarians polled say the province is moving in the wrong direction.
The New West Team is ready to guide clients through this uncertain time in Canadian politics.
