Canada to fast track oil pipeline meant to diversify economy away from US

Carney declared the pipeline a project of national interest, smoothening its way to a single federal regulatory review process.

Canada will fast track the approval process for a new proposed crude oil export pipeline to its west coast that could generate billions in revenue and boost economic growth, Prime Minister Mark Carney has said.

Carney made the announcement on Thursday to fast-track the pipeline, which is a crucial part of his bid to diversify the economy away from the United States and help lessen the effect of US President Donald Trump’s tariffs.

Carney said Ottawa is officially listing the Pacific Link pipeline, which had been announced in July, as a project of national interest. That will ensure it proceeds through a single federal regulatory review process. He said Ottawa aimed to complete the process by September 1, 2027.

“A pipeline to the west coast is part of our mission to transform our economy, to double our non-US exports over the next decade … [and] to unlock our full potential as a global energy superpower,” he told reporters in Fort McMurray, hub of Alberta’s tar sands industry.

Ottawa says the 1 million barrel a day project would create 140,000 jobs and generate more than 20 billion Canadian dollars ($14bn) in gross domestic product (GDP) per year and 100 billion Canadian dollars ($70bn) in government revenue by 2060.

Canada currently has just one east-west oil export pipeline in Canada, the 890,000-barrel-per-day Trans Mountain pipeline. An expansion of that pipeline was completed in 2024, but it is already running at capacity.

For years, Canada has sent more than 90 percent of its crude oil exports to the US via pipeline. A new oil export pipeline could make Canada a major global energy supplier, as Asia’s top importers seek oil from outside the Middle East in the wake of the Iran conflict.

Filling the pipeline, however, would require new tar sands expansions of the type no company has undertaken in more than a decade.

The pipeline will be built by government-owned Trans Mountain Corp in coordination with Pembina Pipeline Corp. Alberta estimates it could cost between 35.2 billion Canadian dollars and 43.7 billion Canadian dollars ($24.7bn – $30.7bn).

The majority owners will be the federal government and the government of Alberta. Indigenous communities will be offered a minimum of 10 percent ownership interest.

Previous oil pipeline projects in Canada have faced strong opposition from environmentalists and Indigenous groups, resulting in the cancellation of some projects and leading to cost overruns and construction delays with others.

Alberta separatism

Carney made the announcement alongside Alberta Premier Danielle Smith in Fort McMurray in the heart of Canada’s tar sands, a move meant to mend relations with oil-rich Alberta as separatists push for a referendum on leaving Canada.

Alberta is holding a public vote on October 19 on whether to hold a referendum on leaving Canada. Smith has long complained that Carney’s predecessor, Justin Trudeau, hindered Alberta’s energy industry and fuelled separatist sentiment.

Smith said she would vote to keep Alberta in Canada and called the roughly 22 percent support for separation in a recent poll “still too high for my liking”.

“I don’t like the fact that many of our fellow citizens have given up on Canada,” Smith said, adding that the pipeline was an example of how “cooperative federalism can work in action”.

Asked what message Albertans considering separation should take from the announcement, Carney said it demonstrated that “Canada is working” and showed what the country could achieve by acting together.