Pipelines have become an election issue. What exactly is Ottawa's role to play?

CBC

25-04-2025

Through a fluke of timing, the federal election coincides almost perfectly with the one-year anniversary of the government-owned Trans Mountain Pipeline expansion coming online — at a time when public sentiment around pipelines is relatively positive.
The two campaign front-runners are both emphasizing energy infrastructure, driven by U.S. President Donald Trump's tariffs and threats of annexing Canada. Both leaders are pitching some version of an energy corridor, though Conservative Leader Pierre Poilievre has more directly emphasized pipelines, specifically, while Liberal Leader Mark Carney has more broadly pitched Canada as a " superpower" in both clean and conventional energy.
Both of the parties leading in the polls want to kick-start the economy, reduce Canada's reliance on U.S. oil and drastically speed up the regulatory process for major projects like pipelines.
If the next government wants to put more pipelines in the ground, experts say that could include different strategies such as taking an ownership stake in one, or reducing red tape for private companies.
Whichever party forms government next week will also have to make a decision on the Trans Mountain project, including whether to continue owning the pipeline or put the Crown corporation up for sale.
Hands-on approach
For now, the parallels between the Liberal and Conservative platforms speaks to a broader acknowledgement that Canada needs to be more involved in building energy infrastructure, said economist Kent Fellows.
In some ways, he said, this shift represents a return to the way things used to be. Before the 1970s, most large, linear infrastructure in Canada was built with direct government involvement, from the Trans Canada Pipeline to the Canadian Pacific Main Line to the Trans Canada Highway.
After that, he said, there was a roughly 50-year period in which the private sector stepped up and built major projects without much direct government involvement, he said. But as evidenced by the Trans Mountain Pipeline expansion project, which Ottawa purchased to get it over the finish line, that period seems to be over. Its original owner suspended construction in the face of regulatory delays and court challenges from First Nations and the province of B.C.
Fellows, an assistant economics professor at the University of Calgary School of Public Policy, said it's not clear yet if the shift in government direction is a "good thing or a bad thing."
"But that's sort of where we are now with Canada's inability to attract private investment for these pieces of transportation infrastructure."
In the end, the Trans Mountain expansion project took 12 years and about $34 billion to develop and build. The expansion added 590,000 barrels per day of shipping capacity to the pipeline, which carries crude oil from Alberta to the B.C. coast.
February polling data from the Angus Reid Institute suggests about half of 2,012 Canadian respondents think the federal government isn't doing enough to build pipeline capacity, and two-thirds said they would support the renewal of the Energy East pipeline, which was terminated in 2017.
Of course, that doesn't mean everyone in the country is on board. Writing in the Globe and Mail, for example, Simon Fraser University professor Thomas Gunton said a renewed pipeline push would be a " costly blunder," citing concerns about the cost of new construction and projections of declining oil demand in the years ahead. He also noted that it would likely take at least four or five years to build a pipeline, at which point Trump would be out of office.
Uncertainty the biggest investment obstacle
For companies looking to build pipelines, however, their main investment hurdle is uncertainty, said Andrew Leach, an economics and law professor at the University of Alberta.
Companies need to make upfront investments in projects that hinge on regulatory decisions that may not come until years down the road, he said, pointing to the Northern Gateway Pipeline, which was first proposed in 2004 and was ultimately scuttled in 2016.
"It's a big bet," said Leach.
One solution, he said, would be to do more broad-stroke assessments upfront to decide what kind of infrastructure the country needs, before getting too far into the details. Leach likened it to a household decision to buy a new car, where a family would typically agree that they need the car first before securing a loan and deciding on a paint colour.
"If you can get through that, then you're partway down the field, so to speak … and you've taken away some of that red-black risk that's there for companies," said Leach.
Still, both economists cautioned that at a certain point, trying to rush through project approvals could lead to diminishing returns, and open the door to challenges from First Nations groups and landowners.
"If you give the impression that you're short-circuiting the checks and balances, then you'll have people who become opposed to it," said Leach.
Pipeline for sale?
Of course, the most direct way for the federal government to be involved in energy infrastructure is by taking ownership of a project — as was the case with the Trans Mountain Pipeline expansion, which came online May 1, 2024.
Some experts say the pipeline likely won't fetch its full sticker price of $34 billion, but could be worth about half that. That would be an important infusion of cash considering the country's growing deficit.
While the plan has always been for Ottawa to sell off the pipeline, Trans Mountain CEO Mark Maki told CBC News in March that perhaps it could remain under government ownership longer as a "national company."
Ottawa could not only collect annual profits, but use the Crown corporation to build other major pipelines or other energy infrastructure.
"There's no reason that you have to sell, and if, in fact, there's development that needs to take place for the good of the nation, it may well serve the country to keep it longer," said Maki, in a March interview on the sidelines of the CERAWeek energy conference in Houston.
"That's something I would expect the political folks will be looking at as they think about corridors for infrastructure."
While public support for pipelines is growing right now, the next government would also need to corral differing opinions about whether building new ones is a good idea at all.
Kevin Birn, an analyst at S&P Global, said Canada could need new pipeline capacity by 2026 if oil production continues to grow at its current pace, though he noted some capacity can also be added by enhancing existing infrastructure. Leach, with the University of Alberta, said one additional pipeline could be useful as an energy security move to ship oil east without crossing into the U.S.
With one pipeline already under government ownership, the next prime minister will have no shortage of decisions to make about how to build energy infrastructure in the best interests of Canada — all while grappling with the most difficult part of governing: what events are sure to come next.