TD Economics says proposed West Coast pipeline would lift Canada's crude export capacity by nearly 20%

A proposed West Coast oil pipeline would expand Canada's crude export capacity by close to 20 percent, but the economic gains may fall short of official forecasts.  

TD Economics cited government analysis projecting national real GDP more than 0.6 percent higher annually by the 2040s, with Alberta's economy more than 3.5 percent larger. 

TD, in a report, said those projections "may lean optimistic," coming from proponents and governments with a clear interest in advancing development.  

Applying more conservative assumptions, the bank put the steady-state lift closer to 0.3 percent nationally and about 2 percent in Alberta, while adding that the project would still contribute meaningfully to growth. 

Alberta has submitted the roughly 1m-barrel-a-day proposal to the federal Major Projects Office, seeking designation as a project of national interest, with a decision targeted for October 1, 2026. 

TD estimated the line would cost $35bn to $44bn.  

At that volume it would more than double the amount of Canadian oil able to reach tidewater.  

For scale, the Trans Mountain Expansion added about 590,000 barrels a day in 2024, lifting the current total to 890,000, while Enbridge's Mainline moves just over 3m barrels a day. 

The economic case rests largely on market access and price realization rather than new production. 

Asian demand, led by China, would likely dominate throughput in the 2030s, the report added.  

By late 2025 China was importing more than 200,000 barrels a day of Canadian crude, surpassing the US as the top buyer of seaborne volumes.  

Over time the new line could narrow the discount between Canadian heavy oil and the US benchmark by up to US$3 a barrel, TD estimated. 

The bank tempered that outlook, cautioning that Asian oil use is expected to flatten as Chinese demand nears a peak over the next decade amid rapid electric vehicle adoption. 

Canadian heavy barrels will also keep competing with discounted alternatives such as Russian crude. 

The proposed route runs from Bruderheim, Alberta, to a marine terminal at Roberts Bank, British Columbia, following the existing Trans Mountain corridor, with two alignments still under study.  

On ownership, Alberta has signed a non-binding agreement with Pembina Pipeline Corporation, Trans Mountain Corporation and the Alberta Petroleum Marketing Commission to develop the project. 

Pembina's economic interest would be 10 percent through construction, with an option to add up to another 10 percent once the line enters commercial operation, while Trans Mountain and the marketing commission would hold equal shares of the balance. 

Construction could begin as early as late 2027, with a final investment decision by 2028-29 and first oil flows between 2032 and 2034. 

Those timelines hinge on alignment with British Columbia, the resolution of legal and environmental challenges, and the completion of Indigenous consultations. 

TD linked the pipeline's political viability to progress on the Pathways carbon capture and storage project, a parallel oil sands emissions strategy backed by Canadian Natural Resources, Cenovus Energy, ConocoPhillips Canada, Imperial Oil and Suncor Energy, which together account for about 90 percent of Alberta's production.  

Pathways aims to capture at least 16m tonnes of carbon dioxide a year by 2045. 

To support it, Ottawa and Alberta have extended federal CCUS tax credits, reset the industrial carbon price to reach $140 a tonne by 2040, and committed to carbon contracts for difference capped at $1.2bn split between the two governments.