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, albeit potentially not as significant as projected by government forecasts. The analysis indicates a projected 0.6% GDP increase for the national economy by the 2040s and a 3.5% boost for Alberta.
Economists Marc Ercolao and Likeleli Seitlheko caution that these estimates, provided by project proponents and governments, may be somewhat optimistic. With more conservative assumptions, the GDP growth could be closer to 0.3% nationally and 2% provincially.
Regardless of the exact figures, the economists believe that the pipeline project would make a substantial contribution to economic growth, especially when considering enhanced market access and export diversification.
Alberta recently submitted its application for the pipeline, which is expected to transport up to one million barrels of oil per day, to the federal major projects office. The project, to be managed by Crown-owned Trans Mountain Corp, is estimated to cost between $35 billion and $44 billion. Currently, the majority of the funding is to be provided by the federal and provincial governments, with Pembina Pipeline Corp holding a 10% stake.
The proposed pipeline, following a route similar to the existing Trans Mountain line to a port south of Vancouver, is predicted to increase Canada’s oil exports by 20%, facilitating a significant rise in oil shipments to Asia. This expansion aligns with Alberta’s strategy to diversify its export markets, particularly in Asia, although the report underscores the need for cautious optimism due to factors like evolving energy trends in the region and competition from other oil suppliers.
The Alberta government anticipates that the pipeline will receive national importance designation in the coming months, with construction potentially commencing by late 2027.
