From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

Bill C-69 (a.k.a. the “no pipelines act”) has added massive uncertainty to the project approval process, requiring proponents to meet vague criteria that go far beyond any sensible environmental concerns—for example, assessing any project’s impact on the “intersection of sex and gender with other identity factors.”

In case you haven’t heard, the Alberta government plans to submit a proposal to the federal government to build an oil pipeline from Alberta to British Columbia’s north coast.

But B.C. Premier Eby dismissed the idea, calling it a project imported from U.S. politics and pursued “at the expense of British Columbia and Canada’s economy.” He’s simply wrong. A new pipeline wouldn’t come at the expense of B.C. or Canada’s economy—it would strengthen both. In fact, particularly during the age of Trump, provinces should seek greater cooperation and avoid erecting policy barriers that discourage private investment and restrict trade and market access.

The United States remains the main destination for Canada’s leading exports, oil and natural gas. In 2024, nearly 96 per cent of oil exports and virtually all natural gas exports went to our southern neighbour. In light of President Trump’s tariffs on Canadian energy and other goods, it’s long past time to diversify our trade and find new export markets.

Given that most of Canada’s oil and gas is landlocked in the Prairies, pipelines to coastal terminals are the only realistic way to reach overseas markets. After the completion of the Trans Mountain Pipeline Expansion (TMX) project in May 2024, which transports crude oil from Alberta to B.C. and opened access to Asian markets, exports to non-U.S. destinations increased by almost 60 per cent. This new global reach strengthens Canada’s leverage in trade negotiations with Washington, as it enables Canada to sell its energy to markets beyond the U.S.

Yet trade is just one piece of the broader economic impact. In its first year of operation, the TMX expansion generated $13.6 billion in additional revenue for the economy, including $2.0 billion in extra tax revenues for the federal government. By 2043, TMX operations will contribute a projected $9.2 billion to Canada’s economic output, $3.7 billion in wages, and support the equivalent of more than 36,000 fulltime jobs. And B.C. stands to gain the most, with $4.3 billion added to its economic output, nearly $1 billion in wages, and close to 9,000 new jobs. With all due respect to Premier Eby, this is good news for B.C. workers and the provincial economy.

In contrast, cancelling pipelines has come at a real cost to B.C. and Canada’s economy. When the Trudeau government scrapped the already-approved Northern Gateway project, Canada lost an opportunity to increase the volume of oil transported from Alberta to B.C. and diversify its trading partners. Meanwhile, according to the Canadian Energy Centre, B.C. lost out on nearly 8,000 jobs a year (or 224,344 jobs in 29 years) and more than $11 billion in provincial revenues from 2019 to 2048 (inflation-adjusted).

Now, with the TMX set to reach full capacity by 2027/28, and Premier Eby opposing Alberta’s pipeline proposal, Canada may miss its chance to export more to global markets amid rising oil demand. And Canadians recognize this opportunity—a recent poll shows that a majority of Canadians (including 56 per cent of British Columbians) support a new oil pipeline from Alberta to B.C.

But, as others have asked, if the economic case is so strong, why has no private company stepped up to build or finance a new pipeline?

Two words—bad policy.

At the federal level, Bill C-48 effectively bans large oil tankers from loading or unloading at ports along B.C.’s northern coast, undermining the case for any new private-sector pipeline. Meanwhile, Bill C-69 (a.k.a. the “no pipelines act”) has added massive uncertainty to the project approval process, requiring proponents to meet vague criteria that go far beyond any sensible environmental concerns—for example, assessing any project’s impact on the “intersection of sex and gender with other identity factors.” And the federal cap on greenhouse gas (GHG) emissions exclusively for the oil and gas sector will inevitably force a reduction in oil and gas production, again making energy projects including pipelines less attractive to investors.

Clearly, policymakers in Canada should help diversify trade, boost economic growth and promote widespread prosperity in B.C., Alberta and beyond. To achieve this goal, they should put politics aside, focus of the benefits to their constituents, and craft regulations that more thoughtfully balance environmental concerns with the need for investment and economic growth.

From the Fraser Institute

By Jake Fuss and Grady Munro

In his recent pre-budget speech in Ottawa, Prime Minister Mark Carney repeated his pledge to make “generational investments” in his government’s first budget on Nov. 4. Of course, “investments” means spending, and the government is poised to run a large deficit and add to the mountain of federal debt. Also in his speech, the prime minister said he “will always be straight about the challenges we have to face and the choices that we must make.” Yet he makes no mention of the risks associated with continued deficit-spending and a ballooning federal debt.

Meanwhile, according to a recent article co-authored by Kevin Page, former Parliamentary Budget Officer (PBO), the Carney government should continue to run budget deficits to benefit “current and future generations” of Canadians. And Page (and co-authors) push back against warnings from the current PBO that the government’s finances are unsustainable—noting that “there is no fiscal crisis.”

And he’s right. Canada does not currently face a fiscal crisis. But the Carney government seems determined to create one.

First, some quick fiscal history. The federal government has run a deficit (i.e. spent more money than it collects in revenue) every year since 2007/08, spanning both Conservative and Liberal governments, meaning it’s been nearly two decades since the government balanced its budget. And over the last 10 years (i.e. the Trudeau era) there’s been no meaningful effort to work towards budget balance.

Of course, deficits produce debt. From 2014/15 to 2024/25, total federal debt has doubled from $1.1 trillion to a projected $2.2 trillion, and as a share of the economy, increased from 53.0 per cent to a projected 70.0 per cent.

Simply put, when government debt grows faster than the economy, government finances are on an unsustainable path that may lead to a fiscal crisis. The last time Canada faced a fiscal crisis was the early 1990s when total federal debt represented more than 80 per cent of the economy and the federal government spent roughly one in every three dollars of revenue collected each year on debt interest. In response to Ottawa’s inability to control its finances, lenders increased interest rates because lending money to Ottawa became a riskier proposition. Things became so dire that the Wall Street Journal penned an editorial arguing Canada had become “an honorary member of the Third World in the unmanageability of its debt problem.”

While Ottawa’s finances today aren’t as precarious as they were back then, a decade of record-breaking spending and debt accumulation has brought us closer to a fiscal crisis.

The Carney government faces significant challenges including the spectre of more U.S. tariffs, a stagnant economy and the need to significantly ramp up Canada’s military spending. Again, despite promising a “very different approach” to fiscal policy than the previous government, the prime minister’s recent speech reinforced expectations that the government will significantly increase spending and borrowing this year and in years to come. Indeed, the PBO recently projected that total government debt will rise to 79.2 per cent of the economy by 2028/29.

When defending this status quo approach, the government and its defenders essentially argue that we can keep running larger deficits because Ottawa’s finances are not in bad shape compared to the past or compared to other developed countries (which is actually not true), and that Canada enjoys a strong credit rating that helps keep borrowing costs down.

But in reality, they also effectively argue that we should continue down a path to a fiscal crisis simply because we haven’t reached the end yet. This is reckless, to say the least. The closer we get to a fiscal crisis the harder (and costlier to Canadians) it will be to avoid it.

To get Ottawa’s finances back in order before it’s too late, the government should reduce spending, shrink the deficit and slow the amount of debt accumulation. Unfortunately, the Carney government appears to be running in the opposite direction.

Jake Fuss

Director, Fiscal Studies, Fraser Institute

Grady Munro

Policy Analyst, Fraser Institute