The head of one of Canada’s largest oil companies delivered a stinging rebuke of a federal-provincial energy pact, calling a proposed west coast oil sands pipeline “unfinanceable” under current government conditions.

Jon McKenzie, chief executive officer of Cenovus Energy Inc., said a tentative agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith fails to address regulatory barriers to capital spending.

The deal, struck in May, outlines a timeline for a new Pacific coast oil pipeline that could begin construction by September 2027. However, Ottawa has tied the infrastructure to the mandate of a C$30 billion ($21.5 billion) carbon-capture project known as "Pathways," alongside escalating industrial carbon taxes.

Speaking at the Global Energy Show in Calgary, McKenzie said combining the massive capital costs of the carbon-capture project with the pipeline makes the infrastructure uneconomical for the private sector.

The deal aims to help transport an additional 1 million barrels of oil per day, but McKenzie argued it ignores the realities of industrial investment.

"Neither the Pathways project nor the west coast pipeline really make any sense" without lifting regulatory hurdles, McKenzie said, adding that the framework proves Canada is "increasingly out of step and uncompetitive."

The comments directly contrast with statements from federal Energy Minister Tim Hodgson, who praised the pact for creating a stable carbon market and establishing a "practical middle ground" to advance energy production and emission reductions simultaneously.

Premier Smith also backed the framework, emphasizing the need to reduce emissions amid rising global scrutiny.

However, McKenzie countered that global customers do not ask about the carbon intensity of Canadian crude.

He warned that the scheduled decade-long increase in the carbon tax would force the premature shutdown of otherwise economically viable oil projects, calling the tax "insidious" and demanding its revocation.

The criticism comes as Alberta's carbon market struggles. Credits and offsets recently traded at roughly C$32 per metric ton, a drop from C$40 when the deal was announced, signaling weak market incentives for the costly carbon-capture mandates tied to the pipeline.