TD Report Cautions Against Overly Optimistic Pipeline Growth Estimates

A new oil pipeline to the West Coast would boost Canada's and Alberta's GDP, according to a recent report from TD Economics. However, the economists warn that government estimates may be overly optimistic.

The report states that if built, the pipeline could increase Canada's GDP by 0.6% by the 2040s and Alberta's by 3.5%. However, using more conservative assumptions, the estimated growth could be lower at 0.3% nationally and 2% provincially.

The pipeline, to be developed by Crown-owned Trans Mountain Corp., is expected to cost between $35 billion and $44 billion, with the federal and provincial governments shouldering 90% of the costs.

The economists note that Asia's willingness to absorb Canadian oil barrels reflects a diversification strategy aimed at securing stable supply from non-Middle Eastern sources. However, they caution that Asia's oil use is expected to flatten over time due to increased electric vehicle adoption and a shift towards cleaner energy.