Pipeline projects to the coasts could generate billions of dollars of economic benefits from access to new markets, shows the MEI

• Oil exports outside the United States grew from around three per cent to 14 per cent due to the Trans Mountain pipeline expansion.

Montreal, March 26, 2026 – Canada has considerable energy potential, but the regulatory framework and political decisions restrain the development of the infrastructure needed to make the most of this potential, maintains the MEI in an Economic Note published this morning.

“The global demand for Canadian energy is very real, and new infrastructure has already demonstrated its benefits,” says Gabriel Giguère, senior policy analyst at the MEI and author of the publication. “It is urgent that governments remove the regulatory obstacles that obstruct the construction of new energy infrastructure.”

Before the expansion of the Trans Mountain pipeline, non-U.S. exports of Canadian oil represented around three per cent of total oil exports. Since the expansion was completed, in May 2024, this proportion has risen, hitting 14 per cent in the fourth quarter of 2025. In terms of value, non-U.S. oil exports grew from $4 billion in 2023 to $14.2 billion in 2025, according to Statistics Canada data.

This diversification also led to a reduction in the price spread between Western Canadian Select (WCS) oil and West Texas Intermediate (WTI) oil, according to data from the Alberta government. This gap went from US$19.82 in the 18-month period that preceded the completion of the Trans Mountain pipeline capacity expansion to US$12.52 for the 18 months that followed, a reduction of 37.5 per cent. With total exports of 2.3 billion barrels of oil between June 2024 and November 2025, the total additional revenue due to the reduction of this gap is estimated at over US$16.7 billion.

“The reduction in the spread means that it is becoming possible to approach the full value of our resources, which helps Canadian firms, but also increases government revenues,” points out Mr. Giguère.

In terms of natural gas, Canada’s first liquefaction terminal began operating in Kitimat, on the West Coast, in mid-2025. Before this, all Canadian natural gas exports wee destined to the United States. By the fourth quarter of 2025, non-U.S. exports already made up seven per cent of all gas exports. Indeed, in January 2026, according to the Canada Energy Regulator, liquefied natural gas exports hit their highest level yet, which shows the strong potential for growth.

Canada: A Stable Partner

The international demand for Canadian energy is booming, points out the researcher.

Since the start of the war in Ukraine, countries like Germany, Poland, Greece, and Japan have expressed their interest in Canadian liquefied natural gas. More recently, in February 2026, India indicated its interest in importing Canadian energy of all kinds. The country also wants to increase the share of natural gas in its energy basket from around 6 per cent to 15 per cent.

“The conflict in Iran highlights the importance of reliable energy suppliers, and it would not be surprising for countries like South Korea and Japan to want to purchase additional Canadian energy,” says Mr. Giguère. “To fully benefit from this situation, the construction of oil and gas pipelines and liquefied natural gas terminals must be accelerated, and we need to stop repeating the errors that led to the cancellation of such projects.”

The federal government has signed a Memorandum of Understanding with Alberta to signal its political will to build a new oil pipeline to the West Coast. Moreover, the Marinvest gas terminal project, on Quebec’s North Shore, could increase the share of non-U.S. natural gas exports by around 20 percentage points at full capacity.

“The federal and provincial governments must not limit themselves to saying the right things when it comes to market diversification; they have to set up the necessary conditions for this diversification to happen,” concludes the analyst.

You can read the MEI Economic Note by clicking here.

***

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.

— 30 —

Interview requests
Florence Plourde
Manager, Communications
Cell: 418-670-5939