Is Ottawa turning Alberta’s pipeline into a taxpayer trap?

Carney’s net-zero agenda shouldn’t come at the expense of Alberta taxpayers

The proposed West Coast Oil Pipeline is starting to look less like a private-sector energy project and more like a taxpayer-backed extension of Prime Minister Mark Carney’s net-zero agenda.

The decision by the federal Liberal government to set Sept. 1, 2027, as the final approval date for the proposed West Coast Oil Pipeline (WCOP) is a full eight months later than the Dec. 2026 date Premier Danielle Smith originally requested in her Jan. 2026 letter to Prime Minister Carney.

The eight-month delay appears to be yet another concession by the Alberta government, coming right after Alberta agreed to a carbon price framework rising to $140 per tonne by 2040.

Carney has tied even this Sept. 1, 2027, federal approval date to the construction of the Pathways CCS project, the oil sands industry’s proposed carbon capture and storage network, a project that will likely require additional public financial support to proceed.

Carney’s apparent position of “No Pathways, No Pipeline” demonstrates to me that Ottawa appears to be “calling the shots” here, using pipeline policy to advance its broader net-zero objectives.

I am fully supportive of new pipeline development, so long as it is based on a solid business case, developed by the private sector, and not by governments. But I worry about the high level of taxpayer support likely needed to advance the WCOP and Pathways CCS projects.

At this point, no private sector companies have publicly emerged with a willingness to take on the financing of the $30 billion WCOP, a reality that reflects the scale, cost and political uncertainty surrounding the project.

Pipelines have high capital expenditure requirements, risks of cost overruns and long construction timelines (three to five years). A robust business case must also clearly demonstrate enough oil supply to fill the line. Meeting the expanded level of oil production needed for WCOP will require massive levels of new investment, with some estimates running as high as $150 billion over the next decade, including maintenance and sustaining capital, optimizations, and expansions.

Although the Alberta government claims it will not build the pipeline or incentivize the private sector to build it, some analysts and industry observers believe that the financing structure may eventually need to take the form of a government-led backstop that effectively rebalances risk and reward, through guaranteed returns or by shifting cost risk away from private-sector proponents.

Will the Alberta government take on cost risk over and above a predetermined capital amount, helping the pipeline proponents reach a positive final investment decision? If so, taxpayers could ultimately end up carrying risks the private sector is unwilling to assume on its own.

Back in October 2025, the Alberta government established a Technical Advisory Group (TAG), comprised of industry representatives from South Bow, Enbridge and Trans Mountain, to provide initial advice and recommendations on the proposed pipeline. TAG’s work is being supervised by an Advisory Panel. I think Albertans need to see the advice and recommendations of the TAG now to make an informed decision on the risks and benefits to taxpayers. I am calling on the Smith government to immediately release the work of the TAG.

A rigorous, evidence-based and private sector-led approach to pipeline development is needed to prevent a repeat of earlier costly pipeline episodes to taxpayers. If Crown agencies, such as the Alberta Petroleum Marketing Commission (APMC), the Alberta Indigenous Opportunities Corporation (AIOC) and the Heritage Fund Opportunities Corporation (HFOC), become involved in the WCOP or Pathways CCS projects, there must be a comprehensive business case prepared and presented to Alberta taxpayers.

The pipeline development process must be private sector-driven and private sector-managed and based on the “hard facts on the ground.” It should not be stage-managed by the Alberta government for political purposes.

Lennie Kaplan is a former senior manager in the Fiscal and Economic Policy Division of Alberta’s Ministry of Treasury Board and Finance (TB&F), where, among other duties, he worked on cross-ministry committees dealing with energy issues, including participating on the Clean Energy Strategic Advisory Committee (CESAT) and the 2009-2010 Alberta Competitiveness Review.