The Pacific Link pipeline ‘opens new markets in Asia, which will help us double our non-U.S. exports over the next decade,’ says Natural Resources and Energy Minister Tim Hodgson. / TWITTER PHOTO
The proposed Pacific Link pipeline could break ground as early as September 2027, creating 140,000 jobs and opening new Asian markets for Canadian oil, Prime Minister Mark Carney announced. But a leading economist warns that rising costs, labour shortages and construction delays could challenge the project's ambitious timeline.
“This is Team Canada at work,” Carney said at a press conference in Fort McMurray, Alta., alongside Premier Danielle Smith, as the federal government officially designated Pacific Link a project of national interest.
The 1,200-kilometre pipeline from Bruderheim, Alta., to Delta, B.C., would transport an additional one million barrels of oil daily to Asian markets, reducing Canada's dependence on the United States, which currently receives 90 per cent of Alberta's oil.
Ottawa estimates the project will cost between $35 billion and $43 billion, generate $20 billion in annual GDP and $100 billion in government revenue by 2060, with completion expected in 2032-33.
Patrick Bryden, Global Head of Research at the Scotia Growth Institute, called the designation a “flashing green light” for investors.
“The signal to the global capital markets is that Canada is open for business, and that we can build big things, and we can do it effectively and responsibly,” Bryden told The Hub's Alberta Bureau Chief Falice Chin on the Growth Lens podcast.
However, Scotia's modelling suggests significant uncertainty around costs and timelines.
Its base-case scenario projects construction beginning in fall 2028, costing $44 billion and finishing in 2034. An optimistic scenario puts costs at $35 billion with construction beginning a year earlier, while a downside scenario sees costs reaching $66 billion and completion slipping to 2037.
Bryden cited the Trans Mountain expansion's massive cost overruns as a cautionary example. Labour shortages, extreme weather, environmental requirements and competition from other major projects could drive expenses higher.
Scotia estimates approximately $350 billion in capital spending on major projects through 2045, with annual investment peaking near $40 billion in 2028 and 2029.
“That means there'll be very significant demand for trades, materials, equipment,” Bryden said.
Indigenous participation will also be critical. Ottawa says consultations have involved more than 130 Indigenous communities, while Pacific Link is expected to offer eligible Indigenous communities at least 10 per cent ownership.
Meanwhile, Ottawa has committed $10 billion to expanding Roberts Bank Terminal and $1.2 billion to marine protection and safety initiatives, including conservation, Coast Guard capabilities and Indigenous stewardship.
Carney said the government aims to establish project conditions by September 2027, while prioritizing Canadian steel, workers and suppliers.
Bryden said securing long-term commitments from oil producers, competitive shipping tolls and clear financial responsibility for overruns will ultimately determine commercial viability.
Despite those challenges, he believes the opportunity is substantial.
“It's a big industry. It creates a lot of jobs. It can create a lot of productivity and prosperity, and I think we can do that in a responsible manner.”
