By Paul Vieira

OTTAWA--The chief executive of one of Canada's biggest oil producers warned that Prime Minister Mark Carney's pledge to position Canada as an energy superpower is at risk by his focus on potentially investment-killing environmental rules.

The pointed remarks from Cenovus Energy CEO Jon McKenzie on Wednesday add to pressure from other energy executives in recent days for the Liberal government to rethink some of its environmental goals as Carney and other senior officials try to drum up increased investment in the commodities patch. Carney has countered that producing lower-carbon energy would be a competitive advantage for Canada.

During a quarterly earnings call, McKenzie said the federal government's push for a higher industrial carbon tax in Alberta -- in exchange for backing a new pipeline to the Pacific Coast -- threatens to both drive investment out of Canada, and dissuade companies from expanding.

"The national dialogue on further development of the oil sands has been myopically focused on the climate agenda and climate policy," McKenzie said. "We have created a set of national policies and regulations that make resource development and investment in Canada uncompetitive with the rest of the world."

He added Canada could benefit from the present state of energy insecurity, amid the conflict in Iran and the subsequent hike in energy prices, to become a safe, predictable and trusted supplier of oil and gas in Asia and Europe.

"We have the opportunity to course correct," McKenzie said.

Late last year, Carney and the resource-rich province of Alberta agreed to a tentative deal to end a decadelong fight over environmental policy. Canada agreed to suspend some environmental rules for Alberta -- like a cap on emissions from oil-and-gas producers, and clean-electricity regulations -- if the province fulfills agreed-upon commitments, such as adopting a tougher industrial carbon-pricing system.

Should the conditions be met, Carney said Ottawa would support a new pipeline to connect the Alberta oil sands with Pacific Coast, something Alberta Premier Danielle Smith has aggressively pushed for.

Ottawa and Alberta continue talks on a formal energy pact, although they missed an April 1 deadline. In recent remarks, Smith said the two sides are making progress but discussions are focused on the industrial-carbon tax's stringency, and how much time companies would have to meet thresholds.

At an event in suburban Montreal, Carney said the oil-and-gas sector is a boon for the country's economy but remains one of the biggest sources of carbon emissions. He said potential buyers in Asia are looking for lower-carbon conventional energy. "Getting emissions down," he said, "will make the oil sands more competitive, make Canada more competitive, and is part of a much bigger energy transition."

McKenzie said no other major oil-producing country in the world has an industrial-carbon tax. "The result is this tax does not incent decarbonization of the Canadian industry, but instead incents industry to invest outside of Canada," said the CEO of Ottawa's efforts to secure a tougher industrial-carbon tax.

Write to Paul Vieira at paul.vieira@wsj.com

(END) Dow Jones Newswires

May 06, 2026 17:49 ET (21:49 GMT)

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