A recent report from TD Economics suggests that a proposed new oil pipeline to the West Coast could have a positive impact on Canada and Alberta’s economies, although the projected benefits may be somewhat overstated by government forecasts. The analysis anticipates a potential 0.6% increase in the national GDP by the 2040s and a 3.5% rise in Alberta’s GDP.
Economists Marc Ercolao and Likeleli Seitlheko caution that these figures are preliminary estimates provided by project proponents and government entities with vested interests in advancing the development. They propose more conservative assumptions, suggesting a national GDP increase of around 0.3% and a provincial GDP rise of two percent.
Despite potential discrepancies in actual economic impacts compared to official estimates, the pipeline project could still significantly contribute to growth, especially when considering enhanced market access and export diversification, according to Ercolao and Seitlheko.
The pipeline, with an estimated cost ranging from $35 billion to $44 billion, is planned to be developed and operated by Crown-owned Trans Mountain Corp. The federal and provincial governments are expected to cover 90% of the project’s costs, with Pembina Pipeline Corp. holding an initial 10% stake.
If completed, the pipeline would increase Canada’s oil exports by 20% and more than double the current volume shipped to Asia via tankers. This expansion aligns with Alberta’s strategy to access Asian markets for oil exports, although the TD report warns of potential challenges such as competition from other oil sources like Russian crude.
The Alberta government has submitted its application for the pipeline project to the federal major projects office, aiming to expedite the process for infrastructure deemed in the national interest. Construction could potentially commence by late 2027 if the project is designated as a national importance initiative later this year.