Premier Scott Moe announced on Monday that he would not be following the Alberta Premier's lead in legislating cuts to production.
Alberta's government on Sunday ordered producers to cut output by 8.7 percent, or 325,000 barrels a day (bpd), starting in January.
The price discount between Western Canadian Select (WCS) and West Texas Intermediate (WTI) has fluctuated in recent weeks, reaching around C$45 a barrel.
"We estimate oil prices need to average only US$2.50 per barrel higher to offset the cash flow impact of the mandated production cut", said senior analyst Jennifer Rowland of Edward Jones Equity Research in a note.
"Alberta is now producing 190,000 raw crude oil and bitumen barrels per day more than can be shipped by pipelines, rail or other means. Ottawa's failure in this area has left Alberta's energy producers with few options to move their products, resulting in serious risks for the energy industry and Alberta jobs", the Alberta Premier's office said.
She says the glut in reserves driving down prices for Canadian oil to bargain-basement levels needs to be addressed before producers begin taking more drastic steps such as slashing capital projects or laying off workers.
The Canadian Dollar rose broadly Monday as oil prices recovered from 2018 lows but developments in the domestic market have just dented the growth outlook and could have negative consequences for the currency over the coming months.
A new threat looms for Canada's largest oil producing province, even as it imposes mandatory output cuts to ease a glut that has driven down crude prices.
"They don't feel it will actually be effective in narrowing the differential".
"I would like to see them quit talking so much and come up with some action on this", said Alberta Energy Minister Margaret McCuaig-Boyd on Monday's episode of CTV Power Play.
Alberta, as a hopelessly oil-dependent petrostate, is flailing about, looking for a solution to the pipeline bottleneck.
"As excess crude capacity is drawn from storage and supply is no longer a price taker, we can expect further improvement in WCS and Canadian crude differentials", wrote Joan Pinto, associate and energy specialist at CIBC. "The measures Premier Notley announced [Sunday] will help balance the market in the short term until new rail and pipeline capacity comes on stream late next year and into 2020".
While the government isn't helping with the rail auto purchase and had no new funds for oil and gas in its fall fiscal update, Natural Resources Minister Amarjeet Sohi did reveal on Friday that he had asked the National Energy Board to evaluate whether Canada's pipelines are being used to their full capacity.
Canada is the United States's top supplier of crude, sending more than 3.3 million barrels south daily, according to the National Energy Board.
Above: Price of Central Alberta blend of oil. However, Imperial and Husky said Friday they remain opposed to involuntary production cuts.
Conversely, S&P Global Platts' Critchlow said Qatar's exit from OPEC is not only a "big" event, but likely the most impactful event over the past two decades.
The losers include integrated producers who will likely pay more for their refining feedstock and companies that had meant to grow their production in the first half of 2019, it said.