Who foots the bill

Alberta Premier Danielle Smith and Prime Minister Mark Carney have announced a route and a tentative partnership for a new pipeline from Alberta’s oil sands to the British Columbia coast, with taxpayers picking up the lion’s share of the cost.

After an unsuccessful, months-long scramble to line up private investors for the project in the face of an accelerating global shift to cleaner, cheaper renewable energy, Smith and Carney announced that the West Coast Pipeline will be a partnership between the provincial government and federally-owned Trans Mountain Corp., The Canadian Press reports.

A submission package shared by the province put the estimated price tag for the pipeline between $35.2 billion and $43.7 billion, including contingency fees but before factoring in potential cost increases like the monumental, 584% overrun incurred by the last fossil project Canadian taxpayers underwrote, the Trans Mountain pipeline expansion. The chances of recovering those costs are “slim”, the Institute for Energy Economics and Financial Analysis recently warned.

Alberta taxpayers have shelled out $18.3 million so far in planning costs for the new project, the submission package says.

Smith said the pipeline, which is meant deliver more than one million barrels of oil per day, would double oil sands production to eight million barrels per day over the next 10 to 15 years, CBC states. Construction could begin as early as 2027 and end by 2034. “As for who foots the bill,” CBC writes, “Smith said detailed funding and the cost for taxpayers ‘remains to be negotiated’.”

Based on Thursday’s announcement, one independent analyst says public ownership is on track to cover 90% of the cost.

Calgary-based Pembina Pipeline Corp. announced it is joining the project, as well, but with news release language much more tentative and less definite than the Thursday evening announcement from Carney’s office.

A Southern Pipeline Route

After a scheduled Thursday morning announcement was delayed into the evening Calgary time, Smith and Carney stood together in Calgary to announce that Alberta has formally submitted a proposed route to Ottawa’s Major Projects Office, CP says. The pipeline would follow closely along the path of the current Trans Mountain pipeline, running from Bruderheim, northeast of Edmonton, to a terminal in Delta, B.C., just south of Vancouver.

The announcement contained no reference to confirmed buyers for the oil. On Tuesday, in a story unrelated to the Alberta news, Semafor reported that global markets are “awash with oil” as the Strait of Hormuz begins to reopen, driving global prices to the lowest level since the American/Israeli war on Iran began.

Semafor attributes the oversupply to the “twin solvers” of high U.S. exports and low Chinese imports, but other analysts also point to permanent “demand destruction” for both oil and gas as energy-importing countries pivot to supply sources and end uses that are cheaper, quicker to deploy, and not subject to international geopolitics or sudden price shocks.

None of that stopped Smith from taking a victory lap Thursday evening.

“The profits from this pipeline will generate billions in revenues over the coming decades for the provincial and federal governments, and will enrich Indigenous communities that choose to partner with us,” she said.

“This is transformational wealth, an opportunity neither Canada nor Alberta can afford to leave unrealized.”

She added: “We’ve certainly come a long way from talk of phasing out Alberta’s oil and gas, haven’t we?”

Carney said the southern route makes the most sense given the line already exists and serves as the “gateway to the world’s fastest growing markets.”

“This is more than just an accord,” he declared. “It’s also an approach that gives certainty to our businesses to build.”

The Deal for B.C.

Earlier in the day, Carney announced that Ottawa will uphold the ban on tanker traffic along B.C.’s environmentally precarious north coast, as word began to circulate that Alberta would be pitching a new pipeline along the southern route—a prospect that has also set alarm bells ringing. The PM stood beside B.C. Premier David Eby, who has been an outspoken critic of Smith’s pipeline, to announce a wide-reaching deal that featured a number of promises to ease Eby’s opposition.

CBC compares the B.C.-Canada deal to “a week of big trades in the National Hockey League,” reporting that the B.C. premier’s price for muting his opposition to the pipeline included “billions of dollars for new natural resources projects, a tunnel replacement in Metro Vancouver, guarantees on environmental protections, $630 million for child care, and perhaps most importantly to the provincial government, maintaining the North Coast tanker ban.”

Ottawa pledges to take on financial risks for any potential environmental issues and spills should the pipeline be approved, CP writes. It also promises that B.C. will receive financial compensation for having the pipeline run through it.

A statement from Carney’s office lays out the details, including federal commitments to accelerate four liquefied natural gas (LNG) terminals on the B.C. coast and spend $3.9 billion on the new North Coast Transmission Line (NCTL), whose capacity would be devoted largely to powering the LNG projects.

While some climate and energy campaigners decried that part of the deal, Canadian Climate Institute President Rick Smith said the grid investment “will help create a more flexible, reliable supply of electricity, while powering industrial growth and advancing Canada’s clean electricity advantage.” He added that the line “will send more affordable, clean electricity to B.C.’s northwest, while laying the foundation for a clean energy corridor with the Yukon”, reflecting the federal government’s “critical role” in building out regional grids.

Eby said the deal doesn’t force him to support the new pipeline, but he conceded his province wouldn’t fight it in court, CP says.

“That’s why this agreement matters. It ensures that the northern tanker ban stays in place, and it ensures that if the pipeline goes ahead, British Columbians are fairly compensated for the environmental risks we would take,” he said.

Another aspect of the B.C. agreement is for Ottawa to commit $10 billion in infrastructure upgrades at the Roberts Bank Terminal in Delta, the end point for Smith’s pipeline.

Carney didn’t mention the connection when speaking with Eby, but said the upgrades could create $100 billion in trade capacity and add $3 billion to the country’s economy annually.

Alberta’s submission package says the terminal will need to be designed to accommodate large oil tankers and feature two new loading berths. Stand.earth Oceans Campaigner Anna Barford said the impacts of increased tanker traffic on endangered orcas and “hard-won salmon restoration” would make a new pipeline “nothing short of premeditated extinction for the region.”

Close to Agreement on Pathways CCS

Smith and Carney also announced Thursday that they are close to finalizing an agreement with the Oil Sands Alliance for its Pathways carbon capture project. Last year’s sweeping memorandum of understanding between Carney and Smith made the pipeline conditional on the carbon capture deal, and vice versa.

Carney’s office said in a statement that Pathways, “alongside other emissions reductions commitments in this agreement,” would reduce climate pollution from the oil sands by 16 million tonnes per year. Canada’s 2024 National Greenhouse Gas Emissions Inventory placed total emissions from oil and gas at 217 million tonnes, not including the new CO2 output that would be triggered by doubling oil sands production as Smith indicated.

In his response to the announcement, Pembina Institute Executive Director Chris Severson-Baker said nothing in Thursday night’s deal “actually compels the companies to move forward with this project. Indeed, the scale of carbon capture outlined today is already a significantly scaled-back version of the original Pathways project that the companies spent years promoting to Canadians as their way of acting on climate, but which never even reached the application stage.”

(The Pembina Institute is a Calgary-based think tank and unrelated to Pembina Pipeline.)

In an early May op ed, former Suncor executive Martha Hall Findlay, who by her own account spent years of her life trying to push a carbon capture hub forward, advised the government to abandon the plan.

Previously, in its 2026 spring economic update, the Carney government lifted an earlier federal restriction on enhanced oil recovery, which involves injecting captured carbon dioxide into old, declining wells to bring more oil to the surface and make it available for extraction. CCS technology itself has been very slow to launch, with the industry admitting it won’t be ready to scale before 2035. And CCS at its best only captures 20% of the emissions in a barrel of oil, since the remaining 80% enters the atmosphere when it reaches its end user and is burned as intended.

No Business Case for a Pipeline

After their appearance in Calgary, Smith and Carney came under immediate, scathing attack for a project with little in the way of a viable business case.

“Today’s announcement breaks two promises that the federal and Alberta governments have repeatedly made to Canadians—that a pipeline would be privately financed, and would be contingent on oil sands companies reducing their emissions,” the Pembina Institute headlined in its response.

“If this was a smart economic venture; if there was any kind of reasonable return on investment to be made, a private company or companies would have put up the cash,” Severson-Baker said. “Instead, Albertan and Canadian taxpayers will now shoulder the cost of 90% of this project.”

And “let there be no doubt,” he added: “the Trans Mountain Corporation and the Alberta Marketing Petroleum Commission are not private proponents. They are wholly taxpayer-funded Crown corporations.”

In a statement earlier in the day, the director of Pembina’s oil and gas program, Janetta McKenzie, said the prospect of the pipeline generating returns for a private investor “is where things come unstuck. A brand new oil pipeline to the west coast is an expensive, high-risk venture; one that is particularly unappealing given the other lower-risk options available to oil sands companies to increase their export capacity.”

Stand.earth Canadian Oil and Gas Campaign Director Sven Biggs pointed to the billions of dollars Canadian taxpayers poured into the previous Trans Mountain project and agreed that there’s no business case for a new pipeline. “The reason Premier Smith can’t find a pipeline company willing to take on ownership of this misguided scheme is that the financial risks of the project outweigh the rewards,” he said in a release. “So the only way this pipeline will ever get built is if regular Canadians like you and I are forced to pay the costs.”

In the hours after the announcement, some analysts questions how comfortable Pembina Pipeline is with those risks. The release from Carney’s office says the company “will be a private sector investor and will contribute its expertise to the project’s development.” The company maintains it has entered into a “non-binding Heads of Agreement,” a contractual term more similar to a memorandum of understanding than a firm, final contract. Investopedia explains that a Heads of Agreement is just “the first step toward creating a formal deal, and due to its tentative nature can often be renegotiated or reneged.”

While he described the pipeline as “a once-in-a-generation opportunity to advance nation-building energy infrastructure,” Pembina Pipeline President and CEO Scott Burrows cautioned that “our participation will be evaluated through the same disciplined lens we apply to every capital decision. We have approached our involvement in a way that is measured, that preserves our financial flexibility, and that incorporates meaningful protections—so that any participation remains consistent with our financial guardrails and creates durable value for our shareholders.”

The deal “is intended to appropriately align risk and responsibility among participants and includes protection for Pembina related to matters such as cost overruns and returns,” the company release added. “Pembina has full discretion over any final investment decision (FID) for its interest and shall have no at-risk development capital prior to FID.”

Former pipeline executive Dennis McConaghy told CBC he was skeptical of the project after following the announcement. While McConaghy described his career as “actually conceiving these projects and bringing them to fruition”, he recalled that “all those projects had… the private financing available to them. They had bona fide entities—whether they were refiners or producers—that had the financial capacity to make long-term commitments to make those projects financeable.”

With the proposed West Coast Pipeline, he added, “that isn’t evident as yet.”

‘Biblical’ Weather and a Heat Emergency

Climate and energy analysts noted that the announcement coincided with a worsening heat emergency blanketing much of Canada, with many parts of the country facing flooding or wildfires made more frequent and severe by the global warming brought on by burning fossil fuels.

“The ‘biblical weather’ that delayed the announcement made the point for us: climate change itself is a growing source of instability,” Climate Action Network Canada Executive Director Caroline Brouillette said in a release. “Continuing to expand fossil fuel production when Canadians are already living with climate chaos is simply dangerous.”

“As heat waves, wildfires, and flooding endanger Canadian lives—and even disrupt Canada Day—Canadians are united: In wanting climate action and not wanting publicly funded pipelines,” Conor Curtis, head of communications at Sierra Club Canada, wrote in an email to supporters. Some 61% of Albertans don’t want public subsidies for a new pipeline, Curtis added, and two-thirds say the provincial economy is too dependent on oil and gas.

“Burning the exported crude overseas will boomerang back on Canada in the form of extreme wildfires, droughts, and floods,” agreed Thomas Green, senior manager, climate solutions at the David Suzuki Foundation. “People in Canada are paying the price—struggling with affordability and suffering through extreme heat—as this government treats yesterday’s fossil economy as the only economic strategy on the table.”

The West Coast Pipeline proposal “tells Canadians to believe that more fossil fuel infrastructure is compatible with meaningful climate action and that treating Indigenous lands as sacrifice zones is reconciliation,” said Janelle Lapointe, Suzuki’s senior advisor, Indigenous strategy.

“Indigenous Nations are leading some of the most innovative renewable energy and stewardship projects in the country,” Lapointe said. “If the government is serious about building a strong and prosperous future, it should be investing in renewable energy solutions rather than advancing projects that place our lands and waters at a greater risk.”

Portions of this story were first published by The Canadian Press on July 2, 2026.