Energy East and GNL Québec could have redirected $38.4 billion worth of energy products per year to markets other than the United States, according to the MEI

Montreal, March 20, 2025 — The construction of pipelines between Eastern and Western Canada would have helped diversify Canadian export markets and should be considered anew in the context of the U.S. tariff threats, says the MEI in a Viewpoint published this morning.

“Canada’s high level of dependence on U.S. trade is not unavoidable,” explains Gabriel Giguère, senior policy analyst and author of the report. “It is the direct result of years of policy decisions that have delayed or actively impeded major infrastructure projects.”

97 per cent of Canada’s oil exports went to the United States last year. For natural gas exports, the number was 100 per cent.

European and Asian markets, however, are also interested in these resources, as evidenced by recent declarations from Japan, South Korea, Germany and Poland.

Had the GNL Québec project gone ahead, it had been projected to be operational as early as next year.

Based on its transport capacity of 46 million cubic meters of gas per day, its implementation could have diverted 19.4 per cent of Canadian gas exports to Europe, representing $1.7 billion worth of goods per year.

Had the Energy East pipeline project gone ahead, it was expected to have been operational by 2021.

Based on its transport capacity of 1.1 million barrels per day, commissioning of the pipeline could have diverted 27.7 per cent of Canadian oil exports from the United States to Europe, an amount worth $36.7 billion per year.

In the context of the recent tariff disputes with the Americans, asserts the MEI researcher, these projects should be revisited.

“Trump has demonstrated that the U.S. is not as dependable a trading partner as we have long believed, and that Canada needs new infrastructure to increase its resilience,” says Giguère. “Both provincial and federal governments will need to consider this new reality when evaluating new energy transmission projects.”

Canada is the world’s fourth-largest producer of oil, and fifth-largest producer of natural gas.

A SOM-La Presse poll published last month shows that Quebecers are now largely in favour of the return of pipeline projects such as GNL Québec and Energy East.

The MEI Viewpoint is available here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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