A new oil pipeline to the West Coast would lift Canada and Alberta’s gross domestic product, but perhaps not to the degree the provincial and federal governments are forecasting, says a new report from TD Economics.
The government analysis predicts a 0.6 per cent boost to the national economy by the 2040s and 3.5 per cent to Alberta’s.
“While these figures provide a useful benchmark, they should be viewed as proposal-stage estimates from proponents and governments with a clear interest in advancing development, and therefore may lean optimistic,” economists Marc Ercolao and Likeleli Seitlheko wrote in the report released Monday.
Using more conservative assumptions, the economists said the increase could be more like 0.3 per cent nationally and two per cent provincially.
“Even if the realized impacts fall shy of official government estimates, the project would still represent a meaningful contribution to growth, particularly when combined with improving market access and export diversification,” Ercolao and Seitlheko wrote.
2:27
Carney, Alberta Premier Smith sign pipeline deal
Alberta filed its application for the million-barrel-a-day pipeline earlier this month to the federal major projects office, which aims to speed along infrastructure deemed in the national interest.
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The pipeline would be developed, built and operated by Crown-owned Trans Mountain Corp.
Its estimated cost could range from $35 billion to $44 billion, and as of now 90 per cent of that is to be shouldered by the federal and provincial governments, with Pembina Pipeline Corp. holding an initial 10 per cent stake.
The pipeline to a port south of Vancouver, which would largely follow the route of the existing Trans Mountain line, would boost Canada’s oil exports by 20 per cent and more than double what currently goes overseas on tankers to Asia, the TD report said.
Enabling more exports across the Pacific is a key driver for Alberta’s pipeline plan.
“Asia’s willingness to absorb Canadian barrels reflects a longer run diversification strategy aimed at securing stable supply from non-Middle Easterns wrote
“Asia’s oil use is expected to flatten over time as Chinese demand approaches a peak over the next decade, driven by rapid (electric vehicle) adoption and a gradual shift toward cleaner energy. Further, Canadian heavy barrels will continue to face competition from discounted alternatives such as Russian crude.”
The Alberta government has said it expects the pipeline to be designated a project of national importance in the fall, and that construction could begin as soon as late 2027.
2:04
Carney juggling Alberta’s pipeline push with B.C. environment concerns
