Ontario and Alberta governments should not moonlight as energy companies on taxpayer dime

Premier Doug Ford and Alberta Premier Danielle Smith recently unveiled their proposal for a pipeline that would carry oil from Alberta to Ontario. Thanks to federal policies, private-sector companies are unwilling to invest in the project. More on that in a moment.

The 3,300-kilometre pipeline proposal, called the Northern Shield Energy Corridor, would transport crude oil from Hardisty, Alberta to Sarnia, Ontario, home to several refineries. Such a project is long overdue. Canada relies heavily on Line 5, an existing cross-border pipeline that moves western Canadian oil from Alberta through Michigan’s Straits of Mackinac to refineries in Sarnia. More than half the crude oil used in Ontario and roughly two-thirds used in Quebec pass through Line 5, which also feeds the refining system that supplies jet fuel to airports in Toronto, Montreal and Quebec City. For years, Michigan’s governor has tried to shut down Line 5 citing environmental concerns, which would disrupt energy supplies to Canada’s most populated provinces.

The Ford/Smith proposal has no construction timeline, official cost estimate or private investors, but Ford wants the Ontario government to own and fund the project, and his government has already begun consultations with Indigenous communities and launched an $11 million feasibility study due by year’s end. Taxpayers have seen this movie before.

In 2018, the Trudeau government bought (i.e. nationalized) the Trans Mountain pipeline, which runs from Alberta to British Columbia, for $4.5 billion from Kinder Morgan, a private energy company, after years of regulatory delays and political opposition in B.C. In 2024—12 years after Kinder Morgan submitted the project for federal approval and five years behind the initial completion target—the pipeline came online, with final costs ballooning to $34 billion (again, paid for by taxpayers).

Clearly, no government—of any political stripe, at any level—should force taxpayers to buy another pipeline. Instead, the Carney government should remove unnecessary barriers to private investment.

Take the assessment process for energy projects. In 2019, the Trudeau government enacted Bill C-69, which added subjective criteria—including the impact on the “intersection of sex and gender with other identity factors”—to federal reviews of infrastructure projects including pipelines. The process has become so convoluted that project approvals take longer than ever. In the law’s first five years, only one project completed the full assessment (taking three and a half years) compared to 17 approvals in the same time span under the previous system.

Then last year, rather than reforming this approval process, the Carney government enacted Bill C-5, which granted the federal cabinet—in practice, the prime minister—the power to fast-track projects it deems to be in the “national interest.” Since then, despite identifying at least 15 projects for fast-tracking, the government has not approved any project for faster approval. Project proponents also warn this new process could invite more legal challenges over Indigenous consultation, adding further delays. And this new concentration of power in the hands of the prime minister and his cabinet increases the chances for corruption. Put simply, Ottawa has made approval reviews more subject to political whim than clear rules—hardly a recipe for attracting investment to Canada.

Finally, the Carney government has also doubled down on Trudeau-era policies that drive up the cost of energy projects including stricter methane rules expected to cost industry tens of billions of dollars and a rising industrial carbon tax that raises the cost of transporting, processing and producing oil and gas in Canada—a burden many competing oil producing countries don’t share.

Governments in Canada—including the Ford and Smith governments—should not moonlight as energy companies. To help realize energy projects including a much-needed pipeline form Alberta to Ontario, Ottawa must create a policy environment that attracts, rather than repels, private investment.