British Columbia and Ottawa Reach Deal on Tunnel Funding and Energy Projects

British Columbia and the federal government signed a multibillion-dollar memorandum of understanding on July 2, 2026, that keeps the North Coast oil tanker ban in place and commits Ottawa to cover one third of the cost to replace the George Massey Tunnel, up to a maximum of $3 billion, Cbc reported. Prime Minister Mark Carney and B.C. Premier David Eby announced the deal in Vancouver.

The federal contribution may include low-cost financing models or credit facilities in addition to direct support. Carney said the funding will make life easier for long-suffering commuters. The province cancelled its contract with the design-build consortium for the tunnel replacement last month.

The scheduled completion date remains 2030. B.C. Transportation Minister Mike Farnworth said the project cost has risen from the initial $4.1 billion. The MOU states that B.C. does not have to support an oil pipeline in exchange for the federal commitments.

It provides for compensation to the province for environmental risks if a pipeline through B.C. is approved. The agreement follows an energy deal between Ottawa and Alberta that could allow pipeline construction to begin as early as September 2027.

Ottawa will also support the Roberts Bank Terminal 2 expansion in Delta, which will increase the port's shipping capacity by 50 percent. 's steel and softwood lumber industries, the proposed 600-megawatt North Coast Transmission Line from Prince George to Terrace, conservation efforts, and a carbon pricing arrangement.

Premier David Eby said the overall deal is worth billions, though no specific dollar amounts are listed for individual components.