CALGARY — Premier Danielle Smith’s proposed oil pipeline to the BC Coast would provide a significant boost to both the Alberta and Canadian economies, but according to a new report from TD Economics, the gains may not be as large as the federal and provincial governments project.The report says government estimates — which project a 0.6% increase in Canada’s GDP by the 2040s and a 3.5% increase for Alberta — should be treated with caution because they were produced by proponents of the project who have an interest in seeing the pipeline built."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.TD Economics estimates the pipeline would increase Canada’s GDP by roughly 0.3% and Alberta’s by roughly 0.2%.."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.Earlier this month, Alberta submitted an application for the proposed one-million-barrel-per-day pipeline to the federal Major Projects Office, which was created to accelerate infrastructure projects in the national interest.The line would be built and operated by Crown-owned Trans Mountain Corp. at an estimated cost of $35 billion to $44 billion.Both the federal and provincial governments are expected to finance about 90% of the project, while Pembina Pipeline Corp. has committed to an initial 10% ownership stake.The pipeline, which would largely follow the existing Trans Mountain route to a marine terminal south of Vancouver, would increase Canada's oil exports by about 20% and more than double crude shipments to Asian markets by tanker.Greater access to Asian markets has been cited as a central objective of the UCP government’s proposal, but TD Economics says the long-term demand is not without risks despite the Alberta government's submission arguing that “Asian demand would likely dominate much of the new pipeline’s throughput in the 2030s.”.“Asia’s willingness to absorb Canadian barrels reflects a longer-term diversification strategy aimed at securing stable supply from non-Middle Eastern sources. Even so, a bit of caution is warranted,” the report reads.“Asia’s oil use is expected to flatten over time as Chinese demand approaches a peak over the next decade, driven by rapid EV 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 also expects the project to receive federal designation as a project of national importance this fall, with construction potentially beginning in late 2027.TD Economics believes the likelihood of the project being confirmed to be a project of national interest is “high,” and that its progression through the MPO will serve as an “important test case.”“A relatively smooth path from proposal to construction and operation would help validate the MPO process, set a precedent for other large-scale infrastructure projects, and potentially catalyze additional private investment across sectors,” the report states.
