CALGARY, Alberta, May 18 (Reuters) - The Progressive Conservative and Wildrose parties in Canada's oil-rich province of Alberta have tentatively agreed to merge, a Wildrose spokeswoman said on Thursday, creating a unified right-wing opposition to the ruling New Democratic Party.
The move would provide a serious challenge in the next provincial election, due in 2019, to Premier Rachel Notley's left-leaning NDP, which was helped by divisions on the right when it swept to power in 2015.
Alberta is home to Canada's vast oil sands and the largest exporter of crude to the United States. But it has been struggling with a three-year slump in global oil prices and a C$10.3 billion deficit.
The energy industry is likely to welcome unification of the right, with the new party expected to be keen to develop policies aimed at cutting costs for the province's oil and gas sector.
Jason Kenney and Brian Jean, leaders of the PC and Wildrose parties, have both pledged to scrap unpopular environmental regulations, including carbon taxes and the phase-out of coal-fired power plants.
Some voters in the traditionally right-wing province, which was ruled by the PC party for 44 years until 2015, say NDP policies like higher corporate taxes and a cap on oil sands emissions have exacerbated the downturn by making Alberta less attractive to potential investors.
In recent months, international oil majors have sold off billions in oil sands assets and Canada has not made any progress on building new crude export pipelines.
"If the election was today they (the NDP) would be sunk and defeating a unified conservative party would be very difficult," said Duane Bratt, a political scientist at Mount Royal University in Calgary.
"Some people are blaming the entire economic downturn on the NDP, even though it was occurring before they were elected."
Any move to scrap the carbon tax would cause tensions with the federal Liberal government of Prime Minister Justin Trudeau, which says it will impose a tax on provinces that do not move independently to meet binding targets set by Ottawa to combat emissions.
Alberta's two conservative parties have been discussing a merger for some time and Premier Notley told reporters the NDP would continue to focus on policies, including maintaining government spending and programs, despite the budget deficit.
"I'm happy to have that debate with one right-wing party or 10 right-wing parties," she told reporters at a news conference.
Any deal to merge would need to be approved by members of both parties. (Additional reporting by Ethan Lou; Editing by Dan Grebler)