Nelson: Carney scores cheap points as Smith struggles to survive

This is less about constitutional theater and more about bargaining power. The market-relevant takeaway is that Alberta’s policy mix is drifting in a pro-capex direction, which should modestly improve expected after-tax returns for upstream producers, pipelines, and power-intensive industrials over the next 6-18 months even if headline politics remain noisy. The second-order effect is that federal overreach risk premium is now better understood by investors: assets with direct Alberta exposure may deserve a small multiple re-rate relative to other Canadian energy names that are more hostage to Ottawa than local policy.

The biggest beneficiary is the capital cycle, not the headline pipeline itself. If Alberta keeps forcing incremental concessions on emissions constraints and permitting, the benefit accrues first to project sanction probability and then to WACC compression for midstream and select E&Ps; that can show up as improved FCF visibility before any volume growth is visible. The losers are utility-like Canadian defensives and regulated power names that face a higher probability of adverse policy surprises, especially if Ottawa responds with symbolic but economically annoying countermeasures over the next quarter.

The contrarian angle is that most investors will treat this as binary separatism noise and miss the asymmetry: even failed separatist pressure can still extract policy concessions that are worth real money. The market may also be underpricing the probability that Ottawa’s response hardens Alberta business sentiment enough to accelerate capital flight within 1-2 years, which would be bullish for existing low-cost producers but negative for domestic banks and provincially concentrated consumer lenders. The key reversal risk is a credible federal reset that lowers confrontation intensity; if that happens, the policy premium fades quickly and the trade becomes more about fundamentals than politics.