West Coast Pipeline MOU: A good first step, but major hurdles remain, says MEI
Montreal, November 27, 2025 – The memorandum of understanding just signed by Prime Minister Mark Carney and Premier Danielle Smith shows that Ottawa is open to new pipelines, but more political courage will be required to make it come true, warns the MEI.
“This marks a clear change to Ottawa’s long-standing hostility to pipelines, and is a significant step for Canadian energy,” says Gabriel Giguère, senior policy analyst at the MEI. “However, Premier Eby and some First Nations group remain adamantly opposed to any such project, which could threaten to make any new pipeline project a pipedream.”
The memorandum of understanding paves the way for new pipeline projects to the West Coast of British Columbia. The agreement lays out the conditions under which such a pipeline could be deemed of national interest and thereby, under Bill C-5, circumvent the traditional federal assessment process.
Adjustments to the tanker ban will also be made in the event of such a project, but solely for the area around the pipeline.
The federal government has also agreed to replace the oil and gas emissions cap with a higher provincial industrial carbon tax, effective next spring.
Along with Premier Eby, several First Nations groups have repeatedly said they would reject any pipeline crossing through to the province’s coast, meaning they could put hurdles to development.
Mr. Giguère points out that a broader issue remains unaddressed: investors continue to view Canada as a high-risk environment due to federal policies such as the Impact Assessment Act.
“Even if the regulatory conditions improve for one project, what is Ottawa doing about the long-term uncertainty that is plaguing future projects in most sectors?” asks the researcher. “This does not address the underlying reason Carney has to fast-track projects piecemeal in the first place.”
Last July, the MEI released a publication on how impact assessments should be fair, transparent, and swift for all projects, not just the few favoured by Ottawa under Bill C-5.
As of July, 20 projects were undergoing impact assessment review, with 12 in the second phase, five in the first phase, and three being assessed under BC’s substitution agreement. Not a single project is in the final stages of assessment.
In an Economic Note published this morning, the MEI highlights the importance of the North American energy market for Canada, with over $200 billion moving between Canada and the United States every year.
Total contributions to government coffers from the industry are substantial, with tens of billions of dollars collected in 2024-2025, including close to C$22 billion by Alberta alone.
“While it’s refreshing to see Ottawa and Alberta work collaboratively in supporting Canada’s energy sector, we need to be thinking long-term,” says Giguère. “Whether by political obstruction or regulatory drag, Canadians know that blocking investment in the oilpatch blocks investment in our shared prosperity.”
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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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