CIBC analysts cast doubt on private sector taking on new B.C. pipeline any time soon

Prime Minister Mark Carney, right, signs an MOU with Alberta Premier Danielle Smith in Calgary, Alta., Thursday, Nov. 27, 2025. THE CANADIAN PRESS/Jeff McIntosh

CALGARY — Analysts at CIBC Capital Markets say they don’t expect the private sector to take the lead on a new West Coast oilsands pipeline so long as the British Columbia government and First Nations are opposed.

“The requirement to consult with B.C. and Indigenous groups is necessary and logical,” they wrote in a report Friday, a day after the Alberta and federal governments signed a memorandum of understanding on a wide range of energy policy issues.

“The MOU does not contain anything resembling judicial reform and therefore seems to rely on the Building Canada Act and the pre-existing duty to consult Indigenous Peoples to avoid endless legal challenges.”

The federal Building Canada Act, under which the new Major Projects Office was created this summer to speed along “nation-building” infrastructure, remains “untested,” the analysts wrote.

The constitutional duty to consult First Nations, meanwhile, is “controversial and ill-defined,” they added. Court challenges caused delays for the defunct Northern Gateway project to B.C.’s north coast more than a decade ago, and for the Trans Mountain pipeline now shipping oilsands crude to the Vancouver area.

“Before any company on our coverage list gets financially involved in a pipeline project as politically charged as this one, we would at least like to see some alignment among Alberta, B.C. and Indigenous groups,” the CIBC report said.

“Recognizing this is unlikely, we would expect some financial incentives to shield any project proponent from legal costs and cost overruns from potentially endless legal challenges.”

The analysts also aren’t banking on oilsands producers ramping up their output immediately, even though the memorandum of understanding spells out that they will not be subject to a federal emissions cap.

“We view a West Coast pipeline as important for economic sovereignty, but believe it will take some time to materialize.”

BMO Capital Markets managing director Randy Ollenberger told a panel earlier this week that costs remain a big unknown, and he’d like to see forensic audits to find out why Trans Mountain and the Coastal Gas Link natural gas pipeline to B.C. ended up costing so much more than initially planned.

“It’s great to approve a pipeline, but if you’re going to build a $100-billion pipeline to the West Coast, you’re not going to ship any oil in it and producers aren’t going to support it and fill it up,” he said.

“We can’t build these expensive gold-plated projects that cost billions and billions of dollars more than they should have cost because we’re moving anthills and birds’ nests and digging up bones along the way. We have to have a much more efficient, streamlined process to build these things so that we can be competitive.”

Former Alberta premier Jason Kenney said he has questions about the costs to industry over some items in the MOU beyond the pipeline.

He told reporters that he worries oilsands economics could be undermined by the industrial carbon price eventually rising to $130 a tonne in addition to the massive capital that would be needed for the Pathways carbon capture and storage project — a condition for the pipeline.

“Texas doesn’t do that. Russia doesn’t do it. Saudi Arabia doesn’t do it. If the Venezuelan heavy crude industry ever comes back in the future under a new government, they won’t be encumbering themselves with those kinds of costs,” Kenney said after Prime Minister Mark Carney’s address to a Calgary business audience.

“Does this agreement embed costs that make the future Canadian growth of the industry uncompetitive? That remains to be determined.”

This report by The Canadian Press was first published Nov. 28, 2025.

Lauren Krugel, The Canadian Press