The M&E Dispatch // 124

Hello Everyone,

Prime Minister Mark Carney's government survived its budget confidence vote by exactly two votes on November 17, a margin thin enough to make predicting Canada's 2026 energy landscape feel like picking the winner in a U11 Tournament before the first puck drop. The $78.3 billion deficit budget and Alberta's stalled West Coast pipeline proposal offer mining and energy professionals a glimpse into the year ahead, but the view is anything but clear.​

Critical Minerals: The Clearest Signal

If Budget 2025 reveals one thing with clarity, it's this: critical minerals are Ottawa's golden child, while traditional oil and gas infrastructure gets a polite "we'll think about it."

The federal government committed $2 billion for a new Critical Minerals Sovereign Fund, plus another $371.8 million over four years for the "First and Last Mile Fund" targeting supply chain development. The Critical Mineral Exploration Tax Credit was extended through March 2027 and expanded to include 12 additional minerals: bismuth, cesium, chromium, fluorspar, germanium, indium, manganese, molybdenum, niobium, tantalum, tin, and tungsten.​

The Mining Association of Canada called Budget 2025 "historic for Canada's mining sector". They're not exaggerating.​

By mid-November, Carney had designated seven major projects for fast-track approval through the Major Projects Office, including three critical mineral mines: Canada Nickel's Crawford Project in Timmins, Nouveau Monde Graphite's Matawinie Mine in Quebec, and Northcliff Resources' Sisson tungsten-molybdenum project in New Brunswick. The Crawford Project alone is expected to attract $5 billion in investment and operate for over 40 years.​

For 2026, the crystal ball is clear: If you're in critical minerals, nickel, lithium, graphite, tungsten, rare earths, regulatory approvals will move faster, financing will be more accessible, and Ottawa will roll out the red carpet. The government aims to position Canada as a reliable non-Chinese supplier for the electrification economy.

Oil and Gas: Conditional Love

The oil and gas sector's 2026 outlook? Call it "cloudy with a chance of carbon capture."

Budget 2025 signalled it would scrap the controversial oil and gas emissions cap if effective carbon markets emerge and carbon capture technologies deploy "at scale". Translation: The Pathways Alliance carbon capture project becomes the gatekeeper for everything else.​

Pathways proposes a 400-kilometre CO2 pipeline from Fort McMurray to Cold Lake with initial capital costs between $16.5 and $24.1 billion, aiming to reduce oilsands emissions by 22 MT annually by 2030. Government support could cover roughly two-thirds of costs, and Budget 2025 extended the carbon capture tax credit through 2035.​

Prime Minister Carney has been explicit: "There'll be no oil pipeline that's brought forward to the Major Projects Office, unless there is a decarbonization plan like Pathways". When he announced the second tranche of Major Projects Office designations on November 14, the list excluded Alberta's proposed West Coast pipeline.​

For 2026: Alberta oil production will continue incremental growth, the province hit 4.2 million barrels per day in 2024. But transformational infrastructure, pipelines, major greenfield developments, remains contingent on Pathways progress. Alberta will submit its West Coast pipeline application by May 2026, but no private company has committed capital, B.C. Premier David Eby remains vocally opposed, and Coastal First Nations have rejected it. Most likely: a memorandum of understanding that defers actual decisions well past 2026.​

LNG: The Middle Child Gets Attention

The Major Projects Office designated the Ksi Lisims LNG facility in northwestern B.C. for fast-track approval. The project proposes two floating LNG structures exporting 22.4 billion cubic metres annually, with an 800-kilometre gas transmission pipeline. It received environmental approvals in September 2025.​

Budget 2025 maintained support for clean technology tax credits and framed natural gas as a "transitional fuel". For 2026: LNG projects with Indigenous partnerships and credible carbon reduction plans will advance more smoothly than oil infrastructure.​

Defence and Critical Minerals: The National Security Angle

Budget 2025 committed $30 billion in additional defence spending to reach NATO's 2% GDP target and explicitly linked critical minerals to "allied national security", allocating $443 million over five years for joint investments with allies and creating a critical minerals stockpiling mechanism.​

Translation for 2026: Mining projects producing defence-critical minerals, tungsten, rare earths, lithium, graphite, will have additional rationale for government support. Expect strategic partnerships with the U.S., Japan, South Korea, and European allies on securing non-Chinese supply chains.

What Remains Foggy: Industrial Carbon Pricing

Budget 2025 committed to "strengthening industrial carbon pricing" and developing a post-2030 trajectory, but provided almost no specifics. Saskatchewan paused its industrial carbon tax in March 2025, Alberta won't hike its levy as scheduled for 2026, and Ottawa's response remains undefined.​

Around $4.3 billion in annual clean energy investment is directly linked to industrial carbon pricing certainty. For 2026: Companies making multi-decade capital investment decisions will continue operating with incomplete information about future carbon liabilities, potentially delaying final investment decisions on major projects.​

The Major Projects Office Test

The Major Projects Office promises a maximum two-year review for projects designated as being in the "national interest". Its track record in 2026 will determine whether it's a genuine game-changer or another layer of bureaucracy.​

If Canada Nickel's Crawford Project receives federal approval by late 2026 or early 2027, it validates the fast-track model. If it bogs down in the same delays that have plagued previous projects, the Major Projects Office becomes just another Ottawa announcement without teeth.

The Fiscal Reality

Budget 2025 projects debt servicing costs rising to $55.6 billion in 2025-26, already exceeding federal healthcare transfers, and reaching $76.1 billion by 2030. Ottawa's ability to continue subsidizing mining and energy projects depends on economic growth materializing. The budget aims to catalyze $500 billion in private sector investment by 2030.​

Looking into 2026, Budget 2025 offers a split-screen view:

Clear as crystal: Critical minerals mining will receive preferential regulatory treatment, billions in government support, and fast-tracked approvals.

Cloudy but improving: LNG projects with Indigenous partnerships and lower-carbon operations will advance steadily.

Still hazy: Oil and gas expansion remains conditional on decarbonization progress, particularly Pathways Alliance deployment. Alberta's West Coast pipeline faces years of obstacles. Industrial carbon pricing details won't emerge until federal-provincial negotiations conclude.

Completely opaque: Whether the Carney government survives. The two-vote margin means another election could trigger at any moment, potentially resetting Canada's entire energy and mining policy framework.​

For mining and energy professionals navigating 2026, Budget 2025 provides a roadmap, but one where some routes are highlighted in bold ink, others sketched in pencil, and a few marked with giant question marks.

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Huge update to the main Miningandenergy.ca site over the weekend, if you haven’t created an account there yet, you should do so this week.

Fun things, and goodies in time for Xmas, set to arrive this weekend.

And yes, it is time to start thinking about Xmas, head down to your local mall and you might be shocked to see that there’s a place for Santa ready and waiting… Though you wont find me there as I don’t trust my wish list with Santa any more, I take mine straight to the source.

Speaking of which, Happy 70th Birthday to my Dad Ray!

Have a great week all,
-Lee