Catherine McKenna isn’t buying Carney’s carbon capture grand bargain

Sept. 24, 2025

Catherine McKenna isn’t buying the potential grand bargain being discussed between fossil fuel companies and the federal government.

In an interview with Canada’s National Observer ahead of the launch of her memoir Run Like a Girl, the former federal minister for environment and climate change said the fossil fuel industry burned the government before and shouldn’t be trusted again. Ongoing negotiations between Ottawa, the fossil fuel industry and allied petro-provinces which could see massive investments in carbon capture to grow oil and gas production is a story she’s heard before — and she doesn’t think it’s credible.

Carbon capture and sequestration "certainly won’t work effectively or at scale,” she said. “It’s not a get-out-of-jail-free card to continue increasing emissions.”

The comments are at odds with Prime Minister Mark Carney’s major projects agenda, a notable point of difference between the two long-time Liberals who have known each other for years while they both held high-profile roles with the United Nations working on climate change. The two are “good friends,” McKenna has said, and political allies, with McKenna endorsing Carney for Liberal leader and Carney attending McKenna’s book launch in Ottawa last week. 

At an estimated cost of $16.5 billion, the largest proposed carbon capture project in the country is the Pathways Alliance’s proposal to pipe carbon dioxide captured from oilsands sites in northern Alberta to an underground storage site south of Cold Lake. 

The proposal will be considered as a project in the national interest, Carney announced earlier this month, and though he did not confirm it would be designated as such, he said he has asked the Major Projects Office to assemble a business development team to develop a strategy to advance it. If it can be built, it offers the potential of “decarbonized oil,” Carney said.

Simon Donner, co-chair of the federal government’s Net Zero Advisory Body, said “decarbonized oil” is an oxymoron at odds with climate science, calling it “Orwellian.”

That’s because carbon capture technology is irrelevant to more than 80 per cent of the oil industry’s emissions — those produced when the product is burned. Just as adding a filter to a cigarette doesn’t promise cancer-free smoking, pairing oil production with carbon capture doesn’t actually decarbonize the fuel. 

Canadian oil is “amongst the dirtiest and most expensive,” in the world, further challenging any plan to make it both cleaner and more affordable, McKenna said.

“So I would be very careful of any grand bargain … the only bargain should be ‘You guys have not done your part like every single other sector,’” she said. 

Sectors such as transportation, electricity, buildings and heavy industry have all seen emissions decrease, while oil and gas emissions continue to grow. 

According to an estimate of Canada’s 2024 greenhouse gas emissions, published last week by the Canadian Climate Institute, the fossil fuel industry has singlehandedly wrecked any chance of the country hitting its legally-binding 2030 emissions reduction targets (barring a radical change in direction), due to increasing oil and gas production.

“Right now, we are seeing the trajectory of national emissions flip from decline to rise, primarily driven by oil and gas and the oil sands,” said Dave Sawyer, CCI’s principal economist, in a pre-launch briefing with the media.

For McKenna, the state of play is clear. The fossil fuel industry committed to climate action, then raked in “obscene” profits. Those could have been used for clean energy diversification, but the sector chose instead to return billions to largely US-based shareholders. 

“Why does anyone think they'll uphold any of their side of any bargain that is made?” she said. “They did nothing other than fight every single policy, and there are none of these policies now in any serious way.”

‘No end of drama’

As a federal minister tasked with developing a climate strategy, McKenna has witnessed previous attempts to strike a grand bargain fail. In her memoir, she recounts returning from the United Nations climate summit where the Paris Agreement was signed in late 2015 and needing to develop a climate plan for Canada to slash emissions. 

In her telling, she spent 2016 in "extraordinarily intense negotiations with provinces and territories that had no end of drama.” The central plank of the plan was carbon pricing, which faced resistance from Conservative politicians, particularly in Saskatchewan. She writes that she tapped Carney, then governor of the Bank of England, to help sell carbon pricing to Bay Street audiences at a meeting of the Toronto Board of Trade. 

McKenna writes she was proud of the plan that was put forward. But looking back now, it’s clear that the oil and gas industry’s promises to limit emissions and support a price on pollution — in exchange for the Liberal government purchasing and building the Trans Mountain expansion project — have been abandoned.

“It was Liberals that got the pipeline built, and they have done nothing except increase emissions and make massive profits … and then demand subsidies,” she said.

As previously reported by Canada’s National Observer, the grand bargain currently being debated could see policies like the proposed oil and gas emissions cap cancelled before ever coming into force, major investments in carbon capture technology to justify new fossil fuel megaprojects and other regulatory changes to incentivize development. 

At the same time federal officials try to strike a deal over climate policies and fossil fuel development, last week Alberta Premier Danielle Smith weakened the provinces’ industrial carbon pricing and credit trading program, which climate advocates say points to the need for a stronger federal backstop. Carney has committed to improving industrial carbon pricing, but has not revealed any details about what those changes may involve. Details are expected in the government’s forthcoming climate plan, set to be released this fall. 

McKenna has had enough. She warns legal consequences are coming, because it is a widely accepted fact that burning fossil fuels is driving the climate crisis, and attribution science that can link specific companies to specific disasters such as deadly heat waves is rapidly improving. 

“Governments will literally not have enough money to cover the costs of all of the impacts of climate change, and insurance is not going to be there in many cases,” she said. “They’re going to get sued. 

“And it's not just oil and gas who are going to be getting sued, it's going to be the lawyers, the accountants, the advertising agencies, it's going to be folks who work for them.”

She says Carney understands this is an existential crisis posing massive threats to infrastructure and the overall economy, which will not be able to sustain the level of damage promised by climate breakdown. And he knows this is only going to get worse as long as greenhouse gas emissions are pumped into the atmosphere, she said. 

“So I, like everyone, am waiting to see the climate plan.”

-With files from Darius Snieckus and Natasha Bulowski

[Top photo: Catherine McKenna on stage at an event at the UN climate summit COP27. Photo via UNFCCC Flickr (CC BY-NC-SA 2.0)]