Varcoe: From tariffs to a 'tectonic' energy MOU, Alberta's top 10 business stories of 2025

Two stories commanded business headlines in Alberta throughout 2025, connected like strands of a bungee cord.

The fallout of U.S. tariffs was often tethered to another major development that bounced back and forth — a new energy memorandum of understanding (MOU) signed between the Alberta and Canada governments.

Both dominated the news, with trade turmoil between Canada and the United States paving the way for a formative agreement, along with 12 tumultuous months for Alberta companies on several fronts.

The tariff fallout saw a freeze on business investment and hiring for part of the year, ignited a ‘Buy Canada’ campaign, fuelled efforts to diversify the country’s export markets, and redefined the energy relationship between Alberta and Ottawa.

“It set the wheels in motion for so much more. It really charted the course and galvanized the country,” says Adam Legge, president of the Business Council of Alberta.

Related

And the federal-provincial MOU “sets the stage for potentially a new boom in the energy sector,” says Calgary Chamber of Commerce CEO Deborah Yedlin.

Other key business stories included a high-stakes takeover battle for MEG Energy, WestJet taking steps to propel a growing aviation hub in southern Alberta, slumping oil prices triggering a large provincial deficit, and the launch of Canada’s new LNG industry.

Here’s a look back at the Calgary Herald’s Top 10 Alberta business stories of 2025.

Tariff turmoil

Immediately following Donald Trump’s victory in the November 2024 presidential election, there were signs of trouble ahead for Canada’s trading relationship with the United States.

The U.S. is the largest customer of Alberta’s exports, with 89 per cent of the province’s goods heading south. A February report by the Canadian Chamber of Commerce identified Calgary as the second-most vulnerable city in the country to American tariffs.

Even before inauguration day on Jan. 20, then-prime minister Justin Trudeau and Alberta Premier Danielle Smith made separate trips to Florida to meet with Trump about trade.

In the weeks that followed, the bilateral relations took a turn for the worse. Trump talked about annexing Canada as the 51st state and placing 25 per cent U.S. tariffs on products from Canada, although it was reduced to 10 per cent for energy.

Following Trump’s Liberation Day tariffs at the start of April, the administration largely exempted imports that complied with the existing Canada-United States-Mexico Agreement (CUSMA). However, tariffs were slapped on Canadian steel, aluminum, copper, softwood lumber and the auto sector.

The resignation of Trudeau, announced in January, eventually saw former Bank of Canada governor Mark Carney becoming the Liberal leader. His victory in the April federal election brought a greater emphasis on market diversification, building new infrastructure, and spurred talk about Canada becoming an energy superpower.

Polls also reflected the shift, showing a growing majority of Canadians support new oil and gas pipelines to access markets outside of the U.S.

“Everything you’ve seen since Trump took office for the second term has been largely a reaction to that (tariff) threat,” says ATB Financial chief economist Mark Parsons.

“It’s accelerated efforts, including by the government, to diversify into new market and . . . to consider adding new pipeline capacity.”

The federal government, with new legislation in place, pledged it would speed up approving projects of national significance, establishing a Major Projects Office in Calgary to review these proposals.

While the effective U.S. tariff rate on Alberta exports is below two per cent, changing trade threats by the U.S. president led business operators to remain cautious making investment and hiring decisions, Parsons notes.

‘Tectonic’ Alberta-Ottawa energy pact

After Smith and Carney met in the summer, Alberta’s premier found support for the idea of a “grand bargain” that would see a new oil pipeline proposal to the Pacific Coast paired with a massive carbon capture network in the oilsands.

In letters to Carney, oilpatch CEOs were adamant a new pipeline could only proceed if several federal policies were overhauled or scrapped, such as the incoming industry emissions cap.

After months of negotiations, a federal-provincial MOU was signed in late November, sidelining most of these contentious policies.

The Carney government will consider a new oil pipeline, and the $16.5-billion carbon capture network by oilsands operators, to be major projects of national significance.

Alberta has agreed to increase its industrial carbon levy, now frozen at $95 a tonne of emissions, to an effective rate of $130.

“It represents a seminal shift in the relationship between Alberta and Ottawa,” says Yedlin.

“That, to me, was tectonic.”

Key details still need to be worked out, such as selecting a potential route and finding a private sector proponent for the province’s proposed pipeline to the Pacific coast.

The idea has rankled British Columbia Premier David Eby and faces opposition from some coastal First Nations, as well as environmental groups concerned about the effect on Canada’s greenhouse gas emissions.

Epic hostile takeover fight amid rising oilpatch M&A

Canadian petroleum producers had a banner year in striking deals, with billions of dollars of takeovers leading to the disappearance of some well-known Alberta companies.

Industry M&A activity was hectic, dominated by the saga surrounding MEG Energy, an intermediate-sized oilsands producer pursued by two rival bidders.

In May, MEG was pushed into play by Strathcona Resources in a hostile takeover bid. Led by executive chairman Adam Waterous, Strathcona’s unsolicited offer of more than $6 billion was rejected by MEG’s board.

With MEG seeking another bid, oilsands giant Cenovus Energy stepped up to the plate with a friendly proposal. However, Strathcona didn’t give up, making another offer and delivering some sharp criticism of MEG’s board.

Following months of twists and turns, Cenovus increased its bid and eventually secured MEG in November for $8.6 billion.

“In order to unlock value, you need to be part of a bigger organization, that’s the story here,” says Martin Pelletier, senior portfolio manager at Wellington-Altus Private Counsel in Calgary.

It wasn’t the only sizeable transaction of the year. Whitecap Resources announced a $15-billion merger with Veren Energy in March.

And U.S.-based Ovintiv, a large producer formerly known as Encana before it moved its corporate headquarters out of Calgary in 2020, unveiled a friendly $3.8-billion deal to buy NuVista Energy in November.

Alberta aviation hub lifts off

Alberta’s aviation industry continued to expand in 2025, marked by key moves from Calgary-based WestJet.

One of the world’s largest providers of technical aircraft services, Lufthansa Technik, said in February it would build and operate a new $120-million engine repair facility in Calgary, signing a deal with WestJet as its foundational customer.

WestJet announced the largest airplane order in the company’s history, pledging in September to add at least 67 new Boeing aircraft to its fleet within nine years.

That same month, flight simulator manufacturer CAE Inc. said it would build a new multimillion-dollar aviation training centre near Calgary’s airport and signed a long-term agreement with WestJet, which will be the facility’s anchor airline customer.

LNG Canada fuels gas hopes

It’s taken more than a dozen years, but Canada finally launched a liquified natural gas industry in 2025, with LNG Canada loading and shipping its first cargo to global markets in June.

The first phase of the Shell-led development will export about 1.8 billion cubic feet (bcf) of gas per day, and a second phase is being considered by its partners.

The mega-project in Kitimat, B.C. is the first major LNG export facility in the country, with two smaller projects now being built: Woodfibre LNG and Cedar LNG. A final investment decision on the proposed Ksi Lisims LNG project is expected in 2026.

For Western Canadian gas producers who’ve endured years of feeble prices and an inability to export their product beyond the U.S., 2025 was a historic moment.

Buzz over data centres

Billions of dollars are flooding into data centres around the world as the AI race accelerates and hyperscalers search for places with electricity to power these facilities.

Alberta wants a piece of the pie, and has encouraged data centre developers to team up with generators to “bring their own power.”

By mid-December, more than 30 separate data centre proposals had applied to the Alberta Electric System Operator (AESO) to connect to the provincial transmission system — representing almost 20,000 MW of potential load — although experts don’t expect them all to proceed.

And the push for building data centres is facing some resistance. In September, a proposal by Kineticor Asset Management for a large-scale data centre-related campus near Calgary was turned down by Rocky View County in the face of concerns by residents.

Sale of Parkland

While there were a flurry of mergers and acquisitions among petroleum producers, Calgary-based Parkland Corp. — a large fuel distributor, marketer, and convenience retailer — was also acquired in May by U.S.-based Sunoco LP in a $12.6-billion bid.

Parkland grew from a small beef company initially based in Red Deer to an international firm with more than 4,000 retail gas and store locations, operating in more than 20 countries.

However, it found itself under pressure from Simpson Oil — Parkland’s largest shareholder — leading to the company reviewing its strategic alternatives and facing a proxy contest ahead of its annual meeting.

A day before the AGM in May, Parkland announced it had accepted a takeover offer from Sunoco.

Oil funk brings back deficits

Benchmark oil prices topped US$80 a barrel in early January, but concerns about a slowing global economy and rising OPEC production saw prices tumble to $55 in mid-December.

In February, the provincial government ended a four-year streak of balanced budgets.

By the end of November, Finance Minister Nate Horner had lowered the province’s forecasted oil prices twice — down to $61.50 a barrel from $68 — and was projecting a $6.4-billion deficit this year.

Pipe expansions, record output

While there was plenty of talk by politicians about building a new oil pipeline, existing infrastructure operators took steps to add capacity to their existing systems as oil output in the province hit record levels.

In early November, Enbridge formally outlined plans to expand the capacity of its Mainline network by up to 400,000 barrels per day (bpd) before the end of the decade.

Meanwhile, federally-owned Trans Mountain Corp. is examining potential optimization initiatives that could boost its capacity from 890,000 bpd to 1.25 million bpd within the next four or five years.

Dow delays; Imperial restructures in Canada

U.S. giant Dow Inc. said in April it would delay its massive $9-billion net-zero petrochemical project under construction in Fort Saskatchewan, citing “volatile” economic conditions affecting global demand for such products. However, the company said it remains committed to the project.

Meanwhile, Imperial Oil announced in September it would eliminate about 900 jobs in Canada by the end of 2027 in a major restructuring, with most of the cuts taking place at its Calgary headquarters.

After the restructuring, Imperial will relocate most of the remaining local positions to its Strathcona Refinery in Edmonton. Imperial said it’s centralizing corporate and technical activities in global business and technology centres.

cvarcoe@postmedia.com