Alberta Premier Danielle Smith and Prime Minister Mark Carney signed a memorandum of understanding in November.Jeff McIntosh/The Canadian Press
Jackie Forrest is the executive director of the ARC Energy Research Institute and co-host of the ARC Energy Ideas podcast.
Canada Day is a time to enjoy our great outdoors and for reflection. While there is plenty for the country to worry about this year, there is also room for optimism.
The worries are well known: Uncertainty around the USMCA free-trade agreement, sluggish economic growth, separation referendums and growing government debt. But here is the case for optimism: Alberta’s West Coast oil pipeline application is expected to head to the federal government’s Major Projects Office on Thursday and join two major West Coast LNG export facility applications already referred to the MPO and deemed projects of national interest.
For more than a decade, Ottawa has offered lukewarm support for expanding the country’s oil and gas production and export pipelines. In contrast, the pipeline application, which came out of an agreement between Ottawa and Alberta, is a strong signal that our country is ready and willing to act. And signals matter.
For years, Canadians were blind to the costs of heavy reliance on the United States export market. Today, that overdependence is glaringly obvious. It has limited our influence, sovereignty, wealth and negotiation leverage. It has caused deep price discounts for Canadian oil and gas at times, costing the country billions of dollars per year in industry revenues, royalties and taxes.
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Canada’s lack of tidewater exports is also costing our allies. At the G7 meeting in Évian, France, the leaders’ statement addressed the need to diversify their energy supply routes and reduce their dependence on oil and gas shipped through the Strait of Hormuz, saying: “We welcome the potential for Canada to deliver significant additional capacity to the global markets in the coming years.” Think about that. The G7 could have named any number of oil- and gas-producing countries to source their supply, but they pointed to Canada.
The G7’s shout-out to Canada is not surprising. The world is fraught with geopolitical and geographical chokepoints. On both counts, Canada is advantaged. We are a stable, secure source of energy, trusted to not use our exports as a tool of political influence. Canada also has a geographic edge in terms of a shorter shipping distance to Asia, and without potential bottlenecks like the Strait of Hormuz or the Panama Canal. A case in point: Interest from German buyers in contracting natural gas from Canada’s West Coast. The German state-owned company SEFE (Securing Energy for Europe) signed a long-term contract for West Coast LNG in May. Dusseldorf-based Uniper, another energy provider in Germany, signed a letter of intent to purchase Canadian gas in June. Even though the British Columbian coast is a long way from Germany, stability and our unobstructed shipping route are making Canada attractive.
The G7 and other countries are closely watching Canada’s ability to deliver on growing its energy supplies, especially given the track record of slow progress in building energy infrastructure in Canada. This time Canada is signalling the intention to move quickly. Alberta and Ottawa are targeting the new West Coast oil pipeline to be in a position to start construction by September, 2027, or about 14 months from now. Compare that to the abandoned Northern Gateway project, which was six years in review only to be cancelled. To Canadians and our allies this new fast-track approach signals something the country has not shown in over a decade: The will to deliver, and in reasonable time frames.
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Beyond strengthening Canada’s oil and gas prices and diversifying trade, these export projects will help with another problem: Sluggish Canadian economic growth. LNG facilities and oil pipelines rank as some of the largest capital projects in the country. They can meaningfully boost economic growth through the tens of billions of dollars spent on construction and expanding and maintaining oil and gas production. Their continuing export revenue that will stretch out for many decades is another economic booster.
The changing tone in Ottawa is already providing a return. Since Mark Carney was sworn in as Prime Minister, ARC has calculated that the collective market capitalization of publicly traded oil and gas producers in Canada has grown by more than $100-billion, materially outpacing the performance of their U.S. peers who were up only modestly over the same period. Industry veterans long believed that Canadian oil and gas companies suffered a federal-policy discount, as the result of unfavourable rules that stopped growth and increased costs. The appreciation of value in Canadian oil and gas producers since March, 2025, seems to confirm a change in that perception.
Foreign investment coming back is another proof point. After nearly a decade of foreign companies exiting the Canadian oil patch, the tide is turning. Shell’s blockbuster $22-billion acquisition of ARC Resources in April is one of the largest deals in the history of the oil patch. If the country can deliver on expanding its export capacity, the Shell deal will not be the last one, especially given the G7’s statement about wanting more Canadian energy.
The West Coast oil pipeline is far from guaranteed: The application faces real hurdles, and its ultimate success is still uncertain. A final investment decision on the two large LNG projects being shepherded by the MPO has not been made yet. But we do know one thing, signals matter. Ottawa’s interest in this pipeline is a clear signal to Canadians and to our allies that Canada means to get its oil and gas to tidewater and seize the opportunity before the country.