Alberta heads to the polls with Canada's green agenda in balance

(Reuters) - Voters in Canada's main oil-producing province Alberta head to the polls on Monday in a tight election race that is expected to have a significant bearing on Prime Minister Justin Trudeau's climate goals, which are already seen as lagging global peers.

The battle between populist Premier Danielle Smith's United Conservative Party (UCP), which is seeking a second consecutive term, and Rachel Notley's left-leaning New Democratic Party (NDP) is expected to be extremely close, pollsters say, even though Alberta is traditionally a conservative bastion.

The result could reshape Trudeau's climate agenda if the UCP wins, making it harder for Canada to meet its goal of cutting emissions 40-45% below 2005 levels by the end of this decade.

Smith is opposed to many of Trudeau's policies including an oil and gas emissions cap and a net-zero electricity grid by 2035, arguing they will hurt an energy sector that contributes more than 20% to Alberta's GDP.

Notley's NDP, which ruled from 2015 to 2019 after a shock election victory that ended decades of conservative rule in the province, is seen as more amenable to Liberal plans to rapidly cut emissions, although it also opposes the oil and gas emissions cap.

Alberta is Canada's highest-emitting province, largely due to vast oil sands operations in the northern boreal forest and produces 80% of the country's 4.9 million barrels per day of crude oil.

BMO Capital Markets analyst Jared Dziuba said both parties are committed to decarbonization, but the pace and costs of the effort vary.

"We see the likely outcome of an NDP victory as (possibly) accelerated decarbonization, but potentially at much higher net costs to industry given its position on environment and taxes," Dziuba wrote in a note to clients, adding the UCP would likely support a steady pace of progress at a lower cost.

The latest survey from polling firm Leger shows the right-wing UCP slightly ahead province-wide, backed by 49% of decided voters versus 46% for NDP. However, the NDP holds a modest lead in Alberta's corporate oil capital Calgary, a key battleground where a number of seats could go to either party, according to a poll from ThinkHQ Public Affairs.

Both leaders held rallies in the city over the weekend.

"I will never permit any Liberal Prime Minister or any Ottawa politician to phase out our energy industry or the jobs of our amazing energy workers," Smith said in a speech on Friday that included pledges to grow the economy and make the cost of living more affordable.

Notley addressed supporters in Calgary on Saturday and defended her party's record on jobs, healthcare and reducing childhood poverty. She held another major rally in NDP stronghold and Alberta capital Edmonton on Sunday.

In the wake of the COVID-19 pandemic, healthcare has become a big issue in Alberta, while affordability has emerged as another key voter concern due to inflation.

Polls are open from 9 a.m. to 8 p.m. local time and the result is expected to be called late Monday night.

A victory for Smith would cement a rightward shift in the province. Since becoming UCP leader in October, Smith has pushed back against perceived federal government over-reach and passed the Alberta Sovereignty Act that gives the province the power to ignore federal laws it deems unconstitutional.

She has also been dogged by a string of controversies largely related to her opposition to COVID-19 vaccine mandates.

(Reporting by Nia Williams; Editing by Denny Thomas and Deepa Babington)

By Nia Williams