It’s time for Quebec to get on board with Canada’s pipeline projects

President Donald Trump’s provocations–including the pending threat of sweeping tariffs–have led to renewed debate about what Canada can do to diversify trade and protect itself from such threats. One logical way is to build the infrastructure necessary to export its natural resources to other markets around the world. Yet a major obstacle in the past has been a mix of tepid support and outright opposition from some provinces for such pipeline construction–including most notably in Quebec.

In the face of Trump’s antagonism that will need to change. Yet this week when asked about the possibility of pipelines being built in Quebec, Premier François Legault hinted that though the conditions may change in the future, there might still be no “social acceptability” for such projects at present. It was interesting to note that his full remarks were rather equivocal, rather than the firm rebuttal that has been widely reported online. Still, one would expect him to show more support at this critical moment for Canada’s economy.

The sudden realization that we are in a national emergency has put many previously verboten policy ideas into urgent focus, from finally fixing our interprovincial trade problems to reviving much-needed energy infrastructure projects. That urgency has apparently yet to reach the Quebec Premier, even though polling commissioned by MEI has consistently shown that a plurality, if not an outright majority of Quebecers are in favour of such projects.

Yet Canada as a whole must come to grips with the new reality facing it: we can no longer rely on our biggest and closest ally to remain a reliable free-trading partner.

Of course, it is natural and good for two allied countries like Canada and the United States, which share a border thousands of kilometres long, to trade intensely with each other. Producers and consumers on both sides of this border have long benefited from their close interconnectedness.

Yet, overreliance on one country as a destination for a whole category of exports—say, energy—is asking for trouble. And trouble is just what Canada is facing now.

Trump’s promise of 25 percent tariffs on Canadian goods and a 10 percent tariff on Canadian energy should certain conditions not be met still looms. While Canada has been granted a 30-day delay, the underlying threat remains as long as Trump continues to find utility in using tariffs as an economic weapon. Setting aside the issues of whether or not Trump’s conditions have some merit and how much Americans themselves will suffer from such tariffs, the fact remains that Canada’s federal government should never have put our country in such a vulnerable position.

Imagine a world in which our abundant energy resources, instead of flowing almost exclusively south to the United States, flowed east and west to Europe and Asia. Imagine helping our allies wean themselves off Russian oil, or transition more rapidly from coal to natural gas.

That alternative reality, along with its geopolitical and environmental benefits, is one in which the federal government had not given the energy sector the cold shoulder over the past decade.

It’s clearer than ever that Canada’s energy sector needs to diversify its export markets. To do that, the federal government needs to streamline its drawn-out and overly complicated assessment process in order to woo back potential investors.

Since 2015, investment in the construction of extraction or pipeline transportation facilities in Canada has shrunk from $56.8 billion to $42.9 billion last year—a 24.4 percent drop. This is especially troubling given that the energy sector represents 7.7 percent of our GDP.

While investment dwindles here, the industry is soaring abroad. Globally, investment in upstream oil and gas production grew from $481 billion in 2015 to$603 billion USD in 2024.

Why the disconnect? Investors point to factors such as uncertainty about environmental regulations, regulatory duplication and inconsistencies, and the cost of regulatory compliance as reasons for Canada’s less favourable investment climate.

The federal Impact Assessment Act (IAA) is a big part of that. In the five years since its adoption, only one project, Cedar LNG, has been approved, and that process took three and a half long years. In contrast, during the first five years under the previous regulatory regime, 17 projects were assessed and approved.

Had the IAA process for Cedar LNG respected the legislated timeline of under one and a half years, the project might be up and running by 2026 instead of the currently anticipated late 2028. But at least it is going ahead, promising to eventually export Canadian natural gas to Asian markets.

Mercifully, the Trans Mountain Expansion came online in 2024, increasing Canada’s non-U.S. oil exports from about 2.5 percent of total exports to about 6.5 percent. Every little bit helps.

It’s too bad so many other energy infrastructure projects have fallen through in recent years, though. We could really use the Northern Gateway Pipeline, the Energy East Project, and GNL Quebec’s Énergie Saguenay project right about now.

It’s not as though politicians and bureaucrats are enacting the wishes of the population, either. In a recent MEI poll, 61 percent of Canadians were in favour of building new pipelines to ports in B.C. or Eastern Canada in order to access markets in Europe and Asia. Over three-quarters (76 percent) realize that the federal government’s impact assessment process is too long, and almost as many (71 percent) are concerned about the negative impact of cancelling $150 billion in energy projects in recent years.

It’s clearer than ever that Canada’s energy sector needs to diversify its export markets. To do that, the federal government needs to streamline its drawn-out and overly complicated assessment process in order to woo back potential investors.

Specifically, Ottawa needs to a) return to a permitting process that focuses on compliance with clear environmental standards; b) adopt a strict 18-month limit for the entire process, with penalties if this timeline is not respected; and c) automatically recognize provincial assessments that have already been conducted and approvals already granted, instead of duplicating the process at the federal level.

As our temperamental neighbour to the south threatens to take its ball away and go play in its own sandbox by itself, our other allies are clamouring for reliable energy. We should try to help them out sooner rather than later.

This necessitates building pipelines from coast to coast to coast so we are never caught this flat-footed again. Canada’s very existence is at stake. It’s time Quebec politicians got the memo.

Daniel Dufort is President and CEO of the MEI. The views reflected in this opinion piece are his own.