A recent report from TD Economics suggests that a proposed new oil pipeline to the West Coast could have positive economic impacts on Canada and Alberta, although the projected benefits may not align entirely with government estimates. The analysis forecasts a potential 0.6% increase in the national GDP by the 2040s and a 3.5% boost for Alberta.
Economists Marc Ercolao and Likeleli Seitlheko caution that the figures provided should be considered as preliminary estimates, potentially leaning towards the optimistic side due to the vested interests of project proponents and governments. By adopting more conservative assumptions, the projected GDP growth could be around 0.3% at the national level and two percent for Alberta.
Even with the possibility of the actual impacts falling short of official projections, the report emphasizes that the pipeline project would still make a significant contribution to economic growth, particularly in enhancing market access and diversifying exports.
The proposed pipeline, which would be managed by the Crown-owned Trans Mountain Corp, is estimated to cost between $35 billion and $44 billion. Currently, the majority of the funding, approximately 90%, is expected to come from federal and provincial governments, with Pembina Pipeline Corp holding an initial 10% stake.
The pipeline route, mainly following the existing Trans Mountain line to a port south of Vancouver, could increase Canada’s oil exports by 20% and more than double the current volume shipped to Asia. The goal of expanding exports to Asia is a strategic move by Alberta to secure a stable supply from non-Middle Eastern sources, yet the report also advises caution due to potential market challenges such as flattening oil demand in Asia and competition from other oil producers.
The Alberta government aims to have the pipeline designated as a project of national importance by the fall, with potential construction starting as early as late 2027.