Can Canada expand its oil industry, reduce emissions, strengthen the economy and become an energy superpower—all at the same time?
The federal government believes it can.
Prime Minister Mark Carney’s proposal for a new West Coast pipeline, paired with the Pathways carbon capture project, is being presented as one of the most ambitious nation-building initiatives in modern Canadian history. Together, the projects promise to expand Canada’s oil exports while reducing emissions from oil production, creating thousands of jobs, strengthening energy security and generating billions of dollars in new investment.
It is an ambitious vision. But major nation-building projects deserve more than optimism. Before governments commit what could become one of the largest publicly backed infrastructure investments in Canadian history, Canadians deserve to understand not only the potential rewards, but also the risks, assumptions and trade-offs.
What Was Announced?
The proposal centres on two interconnected projects: a new West Coast pipeline capable of transporting up to one million barrels of oil per day, and the Pathways Project, a large-scale carbon capture and storage (CCS) network that would collect carbon dioxide from multiple oil sands facilities and permanently store it underground.
The government argues the two projects must work together. The pipeline would expand Canada’s ability to export oil, while carbon capture would reduce emissions from producing that oil, allowing Canada to market what the Prime Minister has described as some of the world’s “lowest-carbon intensity” crude. Lowest compared to what? Existing oil sands production? Conventional crude? The global average? The announcement doesn’t say, making the claim difficult to evaluate.
The announcement promises approximately 175,000 jobs, billions of dollars in investment, greater Indigenous participation, increased government revenues and a stronger economy. Each of those claims deserves closer examination. How were the jobs calculated? Are they direct, indirect or temporary construction jobs? How much of the investment is tied specifically to this project? What form will Indigenous participation take—consultation, employment, ownership or equity? How much additional revenue do governments expect after accounting for public investment and potential subsidies? And by what measure will Canadians know whether the economy has actually been strengthened?
Those are significant promises. The question is whether the available evidence supports the confidence with which they are being made.
Who Pays—and What Does History Tell Us?
Ottawa and Alberta would become equal partners in the project. Pembina Pipeline Corporation would participate as a private-sector investor, while Indigenous communities would be offered an ownership stake.
What remains uncertain is whether the project can unfold as planned.
History suggests caution. Research into hundreds of transportation megaprojects has found that cost overruns are far more common than staying on budget. Researchers attribute the pattern to technical complexity, optimism bias and political pressure to underestimate costs.
Canada’s own Trans Mountain Expansion illustrates the challenge. Originally estimated at roughly $5.4 billion, its final cost exceeded $34 billion.
Canadians should be asking: Who absorbs additional costs? Will governments invest more public money? Will private investors contribute more capital? Or will the project itself be scaled back?
Can Carbon Capture Deliver?
Carbon capture is the environmental foundation on which much of the proposal rests. The technology captures carbon dioxide released during oil production, compresses it and stores it deep underground. If the Pathways Project performs as planned, it could capture up to 16 million tonnes of carbon dioxide annually.
That could substantially reduce emissions from producing oil. But carbon capture also comes with important trade-offs. These systems require significant energy, consume substantial quantities of water, require continuous maintenance and long-term monitoring, and add considerable operating costs. Independent analysts have also questioned whether projects on the scale proposed by Pathways can remain financially viable without substantial public support.
Carbon capture reduces emissions from extraction and processing. It does not reduce the emissions produced when the oil is ultimately burned.
If construction costs rise, operating costs prove higher than expected, or capture rates fall short of projections, the economics of both the Pathways Project and the pipeline could change significantly.
What Future Are We Investing In?
A pipeline is more than a construction project. It is a long-term commitment to expanding oil extraction and export capacity—and to the economic, environmental and fiscal consequences that come with that choice.
The International Energy Agency projects that global oil demand could level off or decline under stronger climate policies, while OPEC forecasts continued growth. Most analysts agree oil will remain part of the global energy mix, but disagree about how much will be needed and for how long.
The proposed pipeline would add capacity to transport one million additional barrels of oil per day. However, Alberta’s broader energy strategy goes further, targeting production of six million barrels per day by 2030 and eight million barrels per day by 2035. In that context, the pipeline is not simply about meeting today’s transportation needs—it is intended to support a substantial expansion of oil production over the coming decades.
Some economists have also questioned whether another export pipeline is commercially necessary. Analyses suggest planned expansions to existing systems may already provide significant additional export capacity. If those projections prove accurate, the business case becomes more complex than the announcement suggests.
What Has to Go Right?
For the proposal to deliver the promised economic and environmental benefits, several assumptions must hold:
- Existing pipeline capacity must prove insufficient.
- Construction costs must remain close to budget.
- Carbon capture must perform as expected.
- Global demand for Canadian oil must remain strong.
- Canadian oil must remain competitive.
- Investors must earn acceptable returns.
None of these assumptions are unreasonable. But each introduces risk, and together they illustrate how much must go right for the project to deliver on its promises.
Opportunity Cost
Every dollar invested in one project is a dollar not invested somewhere else.
Supporters argue this proposal will generate jobs, economic growth and future government revenues. Critics ask whether similar investments in electricity transmission, nuclear power, renewable energy, critical minerals, climate adaptation or advanced manufacturing could deliver comparable or greater long-term benefits while exposing taxpayers to different risks.
The Bottom Line
Canada has never shied away from ambitious nation-building projects. Some have transformed the country. Others have proven far more expensive and complicated than their proponents anticipated.
Canadians are being asked to embrace an ambitious vision. But, before committing tens of billions of dollars, they deserve a clearer understanding of the evidence behind the promises, the risks behind the assumptions and the alternatives that were considered.
Only then can Canadians decide whether this is not only a nation-building project, but the right nation-building project for Canada’s future.
Based on what was presented in the Prime Minister’s announcement, do Canadians really have enough information to confidently assess this proposal?
References
Government of Canada
Prime Minister’s Office – Canada and Alberta advance west coast pipeline project proposal and Pathways Project Carbon Capture Initiative
https://www.pm.gc.ca/
Government of Canada – Oil Tanker Moratorium Act
https://laws-lois.justice.gc.ca/eng/acts/O-8.3/index.html
Natural Resources Canada – Carbon Capture, Utilization and Storage (CCUS)
https://natural-resources.canada.ca/climate-change/carbon-capture-utilization-and-storage
Energy & Carbon Capture
Pathways Alliance
https://pathwaysalliance.ca/
Shell Canada – Quest Carbon Capture and Storage Project
https://www.shell.ca/en_ca/about-us/projects-and-sites/quest-carbon-capture-and-storage-project.html
Canadian Energy Regulator
https://www.cer-rec.gc.ca/
Energy Outlooks
International Energy Agency – World Energy Outlook
https://www.iea.org/reports/world-energy-outlook-2025
OPEC – World Oil Outlook
https://www.opec.org/opec_web/en/publications/340.htm
Climate & Economic Context
Insurance Bureau of Canada
https://www.ibc.ca/
Canadian Climate Institute
https://climateinstitute.ca/
Reporting
Reuters – Canada and Alberta announce new west coast oil pipeline to boost exports
https://www.reuters.com/business/energy/canada-alberta-announce-new-west-coast-oil-pipeline-boost-exports-2026-07-03/
Reuters – Canada and British Columbia agreement on oil tanker moratorium and pipeline route
https://www.reuters.com/business/energy/canadas-carney-says-pact-with-british-columbia-maintains-north-coast-oil-tanker-2026-07-02/
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