“Left in the Dark”: Market Fundamentalism, Canadian Energy Governance, and Challenges to Environmental Advocacy

Written by: Liad Wolch

Edited by: Louis Chenot

On 9 September 2025, in the community of Warburg - an Albertan town of approximately 800 people that lies 90 kilometers southwest of Edmonton - a town hall was convened to discuss the provincial government’s Mature Asset Strategy (MAS). The MAS aims to alleviate the losses of the community, and others like it, from the oil and gas industry’s unpaid taxes, leases, and environmental liabilities. In total, these losses amount to $38 billion. Warburg residents representing the Alberta Surface Rights Federation and Rural Municipalities of Alberta, respectively, both called out energy minister Brian Jean’s chief of staff, Vitor Marciano, who gave the presentation, for falsely stating that consultation had occurred between their organizations and the government. The 100 residents in attendance collectively expressed frustration that the government was failing to enforce its own regulations while leaving them to wait even longer for financial compensation (Anderson, 2025a).

Kara Westerlund, the president of the Rural Municipalities of Alberta, points out a critical double standard in the Albertan government’s regulatory scheme: the provincial government will intervene to collect royalty payments from oil and gas companies, which are expected to total $21.5 billion in 2024-2025, while the government is unwilling to enforce its own policies around oil and gas company payments to local communities (Anderson, 2025b). Instead, the province’s MAS plans to use tax-payer dollars to help Warburg residents recuperate their losses.

Market Fundamentalism and the Albertan Economy

How did Albertan energy governance come to be this way? Central to answering this question is understanding Alberta’s market-liberal economic ideology. In his book Costly Fix: power, politics, and nature in the tar sands, University of Alberta political scientist Ian Urquhart argues that market liberalism has underpinned the provincial government’s relationship with the oil and gas industry in Alberta since the tar sands boom in the 1990s. Akin to “free market ideology,” Urquhart employs the term “fundamentalism” to emphasize that faith in the markets is “not based on economic science or historical evidence,” (Stiglitz in Urquhart) but rather on some “quasi-religious certainty” (Block and Somers in Urquhart) (Urquhart, 2018,  p.18).

Motivated by market fundamentalism, Albertan politicians afford corporations great authority in policy-making - a practice which impedes democratic energy governance. As Karl Polanyi notes, purely autonomous markets do not exist: they are necessarily “embedded in societies… they always have needed to be organized and regulated by politics” (Block and Somers in Urquhart, 2018, p.18). Removing government oversight from energy governance does not remove political forces, but rather displaces them from democratic institutions to corporations. This enables governments to maintain support for the oil and gas industry from a distance while simultaneously defending the veneer of a self-regulating market.

Market fundamentalism is helpful in dissecting the issue of orphan and inactive wells. In On Oil, Don Gillmor notes that of Alberta’s 619,503 oil and gas wells, 3,406 have bankrupt owners (i.e., orphaned) while between 170,00 and 230,000 are inactive and may be orphaned in the near future. The lack of accountability for cleaning up orphan and inactive wells is largely due to the government’s voluntary compliance regulations, which are rarely enforced. Further, both the provincial and federal governments have been ready, if not eager, to bail out oil and gas companies for non-compliance. Early on in her tenure as premier, Danielle Smith implemented a policy of royalty reductions in exchange for oil companies to clean up wells. Meanwhile, the federal government, under former Prime Minister Justin Trudeau, allotted $1.7 billion to the orphan well clean-up nationally in 2020 (Gillmor, 2025, pp. 64-65). Not only has unequivocal faith in the market exempted companies from following regulation, but both the provincial and federal governments have leveraged public funds in order to sustain companies’ ability to do so.

Market Fundamentalism in 2025

Contemporary Albertan energy governance under Premier Danielle Smith fits well under the framework of market fundamentalism. On 2 October 2025, Smith announced that the province intends to spearhead development of a new pipeline to the West Coast, after no company came forward with a proposal for one. As Deborah Yedlin, president of the Calgary Chamber of Commerce, noted in a CBC article, “Private capital is not going to get risked until government de-risks these kinds of projects” (Bakx, 2025, paras. 18-19). Here, Yedlin encapsulates well another form of the double standard outlined by Westerlund: the provincial government is willing to take significant losses - $1.3 billion in the case of the Keystone XL Pipeline - to alleviate investment concerns from the oil and gas sector (Bakx, 2025, para. 24).

Meanwhile, environmental groups have been systematically removed from energy governance. This is evidenced most recently by a government legal settlement with foreign coal mining companies which totals more than $200 million dollars (Fletcher, 2025). In a joint statement, the Alberta Wildlife Association (AWA) and other environmental and Indigenous groups criticized the settlements, as well as the government’s volatile coal policy, as lacking transparency and accountability. They demanded that the government “ensure coal companies address any and all environmental liabilities acquired or assumed by past activities on the landscape,” as well as “consult meaningfully with Indigenous Nations prior to any policy changes, to ensure no infringement on Treaty rights or impact to traditional territories …[and] respect public interest and include public input in any future coal policies …” (AWA, 2025).

Systemic Exclusion: Indigenous Environmental Advocacy

Popular resistance to the negative impacts of market fundamentalism, such as in Warburg and through the AWA, has been met with disenfranchisement and undemocratic provincial governance and policy. These forces were exemplified by the Alberta government’s Cumulative Environmental Management Association (CEMA). Formed in July 2000, CEMA’s aim was to address environmental concerns regarding oil sands in order to realize sustainable development. From early stages, however, it was evident that First Nations’ and environmentalists’ concerns were being actively undermined: of its initial 41 seats, industry held 16 while the former two groups held 12 combined. Despite concerns from Environment Canada, a federal department, and the Pembina Institute, an industry-supported environmental organization, the Alberta Energy and Utilities Board argued that private-sector leadership would best guide policy-making. For its part, the provincial government maintained that CEMA was not a government institution, despite the group purportedly guiding policy. Ultimately, in spite of a seemingly admirable consensus decision-making process, CEMA proved ineffective and was sidelined by the government. Meanwhile, by 2005, five tar sands projects had been approved, with a total projected output of 750,000 barrels of bitumen per day. (Urquhart, 2018, pp. 114-118)

The role of Indigenous groups in North American environmental politics is particularly  “pivotal” (Hoberg, 2021, p. 51). In the Canadian legal system, Indigenous governance authority stems from Aboriginal rights entrenched in Section 35 of the Canadian Charter of Rights and Freedoms, which recognizes and affirms Indigenous collective rights and treaty rights. Furthermore, Indigenous groups often invoke Article 32.1 of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), adopted by the UN General Assembly in 2007, which states that:

States shall consult and cooperate in good faith with the Indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources. (Hoberg, 2021, p. 52)

This article emphasizes Indigenous consent as a necessary prerequisite to environmentally harmful projects, such as the oil sands. However, UNDRIP is not legally binding in Canada, and the Canadian legal system does not use UNDRIP’s standard of consent, maintaining that “consultation and accommodation does not constitute a veto power for Indigenous groups regarding resource projects” (Newman, 2017 in Hoberg, p. 52). Nonetheless, UNDRIP’s consent model provides Indigenous groups normative power in political discussions (Hoberg, 2021, p. 52).

The fundamental role of Indigenous groups in the Canadian policy-making process was not enough, however, to ensure their voices played a meaningful role in CEMA discussions. First Nations lacked the organizational capacity to effectively participate, and, as a result, were largely unable to intervene in assessments. Furthermore, government support often required First Nations to accept industry intervention in order to receive funding. Thus, while First Nations could benefit from the exploitation of their lands, they effectively had no say in whether the land would be exploited in the first place (Urquhart, 2018, pp. 308- 311).

This heavily contrasts with Indigenous experiences participating in environmental policy in Ecuador. During the formation of a ‘Water Parliament’ to manage the Ambato River watershed, Indigenous groups in Tungurahua province were provided “training and resources” by GTZ, an international German bank, despite Indigenous groups opposing GTZ’s initial policy proposal (Kauffman and Martin, 2014, p. 49). The participation of Indigenous groups in the Water Parliament was critical to the success of the initiative, which also prompted significant normative shifts surrounding environmental protection both domestically and internationally (Kauffman and Martin, 2014).

Conclusion

Given Alberta’s market fundamentalist economic structure, and the provincial government’s systemic exclusion of environmental, Indigenous, and local stakeholders in energy governance, what impact can environmental resistance, such as anti-pipeline coalitions have? As McGill Professor of Political Science Amy Janzwood notes, Hoberg argues that anti-pipeline coalitions impel governments to “adopt more ambitious climate policies” (Janzwood, 2023, p.123). However, Hoberg also recognizes that “nation-building” rhetoric around oil and gas infrastructure, namely pipelines has historically been politically powerful for a diverse array of actors: both former Conservative Party of Canada Prime Minister Stephen Harper and former Alberta NDP Premier Rachel Notley used the phrase. Now, Liberal Prime Minister Mark Carney has institutionalized nation-building projects through his Major Projects Office. The strength of nationalist language, in conjunction with market fundamentalist language, has made Canadian environmental opposition largely ineffectual. In order for this to change, provincial and federal energy governance structures and practices must be significantly reformed - or potentially transformed - to ensure democratic, transparent, and accountable energy policy is not only stated, but actualized.

References

Alberta Wildlife Association. (2025, 15 July). Joint News Release: Albertans left in the dark on coal company settlements. AWA. https://albertawilderness.ca/joint-news-release-albertans-left-in-the-dark-on-coal-company-settlements/

Anderson, D. (2025, 15 September). ‘Broken’ trust: senior political staffers met by jeers at meeting with rural Albertans. The Narwhal. https://thenarwhal.ca/alberta-oil-and-gas-meeting-warburg/

Anderson, D. (2025, 24 June). Two Albertas: rural town halls and Big Oil’s halls of power. The Narwhal. https://thenarwhal.ca/alberta-big-oil-energy-contrasts/

Bakx, K. (2025, October 2). After losing billions of dollars on Keystone XL and tank cars, Alberta is pursuing another pipeline. CBC. https://www.cbc.ca/news/canada/calgary/oilpatch-pipeline-alberta-1.7648452

Block, F., & Somers, M. R. The Power of Market Fundamentalism: Karl Polanyi’s Critique. Cambridge, MA: Harvard University Press.

Fletcher, R. (2025, 23 October 2025). Alberta to pay $95M settlement to another coal company over policy change. CBC. https://www.cbc.ca/news/canada/calgary/alberta-coal-settlement-95-million-evolve-power-montem-resources-9.6948924

Gillmor, D. (2025). On Oil. Biblioasis. https://public.ebookcentral.proquest.com/choice/PublicFullRecord.aspx?p=31776786

Hoberg, G. (2021). The Resistance Dilemma: Place-Based Movements and the Climate Crisis. The MIT Press. 

Janzwood, A. (2023). Pipeline Politics and the Future of Environmental Justice Struggles in North America. Global Environmental Politics, 23(3), 120–126. https://doi.org/10.1162/glep_r_00731

Kauffman, C. M., & Martin, P. L. (2014). Scaling up Buen Vivir: Globalizing Local Environmental Governance from Ecuador. Global Environmental Politics, 14(1), 40–58. https://doi.org/10.1162/GLEP_a_00639

Stiglitz, D. J. (2009). Moving Beyond Market Fundamentalism to a More Balanced Economy. Annals of Public and Cooperative Economics. 80:3, p. 346.

Urquhart, I. T. (2018). Costly fix: Power, politics, and nature in the tar sands. University of Toronto [Ontario] Press.