Analysts at CIBC Capital Markets say they don’t expect the private sector to take the lead on a new West Coast oil sands pipeline so long as the British Columbia government and First Nations are opposed.
“The requirement to consult with B.C. and Indigenous groups is necessary and logical,” they wrote in a report Friday, a day after the Alberta and federal governments signed a memorandum of understanding (MOU) that made a lot of big infrastructure promises while gutting a decade of federal climate policy.
“The MOU does not contain anything resembling judicial reform and therefore seems to rely on the Building Canada Act and the pre-existing duty to consult Indigenous Peoples to avoid endless legal challenges.”
The federal Building Canada Act, under which the new Major Projects Office was created this summer to speed along “nation-building” infrastructure, remains “untested,” the analysts wrote.
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The constitutional duty to consult First Nations, meanwhile, is “controversial and ill-defined,” they added. Court challenges caused delays for the failed Northern Gateway pipelines to B.C.’s environmentally fragile northwest coast more than a decade ago, and for the Trans Mountain pipeline now shipping oil sands crude to the Vancouver area.
Long Memories and New Opposition
Since Prime Minister Mark Carney and Alberta Premier Danielle Smith signed their MOU Thursday, memories of past catastrophic oil spills have resurfaced and Indigenous opposition to the project has ignited.
“The Exxon Valdez disaster happened more than 36 years ago off Alaska’s coast, but the catastrophic oil spill still looms over plans for a pipeline from Alberta to the northern British Columbia coast,” CBC reports. “Haunting images of seabirds coated in oil, the black slick lapping the once-pristine shores, have become visual shorthand for the consequences of a major spill.”
“There will never be full ecological recovery in Prince William Sound from this,” environmental consultant Rick Steiner, who was one of the first on the scene and later studied the aftermath, told the national broadcaster.
In Indigenous country, meanwhile, leaders of past pipeline battles are preparing for a new fight, while a younger generation gets ready to step up, The Canadian Press writes.
“The First Nations in British Columbia are completely outraged that there was no effort whatsoever made to consult with First Nations that will be impacted by a pipeline project to coastal waters,” Grand Chief Stewart Phillip told the news agency. “We will not stand idly by while governments collude behind closed doors and come up with ludicrous notions of attempting to get yet another fossil fuel pipeline to coastal waters.”
“My ancestors—all the ancestors of every First Nations person here in what is now called British Columbia—have stories about our people having to stand on the front lines, rain or shine,” added UBCIC youth representative Katisha Paul, co-chair the United Nations’ Global Indigenous Youth Caucus. “It’s our responsibility to continue on this journey.”
The continuing problem with the MOU is that “behind the announcement lies a deeper story: one of environmental standards being sidelined, provincial opposition ignored, and Indigenous rights placed at risk,” write White Raven Law lawyers Terri-Lynn Williams Davidson and Elizabeth Bulbrook, in an opinion piece for the Globe and Mail.
The Building Canada Act and its companion legislation in B.C., Bill C-15, “pay lip service to Indigenous consultation, but they stop short of protecting consent or meaningful participation,” the two lawyers say. “Consultation is treated as a procedural box to tick rather than a substantive duty to reconcile and accommodate,” despite a Supreme Court ruling that clarified the matter.
And because the courts have yet to recognize Aboriginal title to marine and ocean territories, they add, “legislation that empowers the federal cabinet to approve offshore terminals, shipping corridors, subsea cables, offshore wind installations or deep-sea mining operations without requiring Indigenous consent creates a jurisdictional vacuum the government is poised to exploit.”
Investors Will Want Subsidies
Against that backdrop, “before any company on our coverage list gets financially involved in a pipeline project as politically charged as this one, we would at least like to see some alignment among Alberta, B.C., and Indigenous groups,” the CIBC report said.
“Recognizing this is unlikely, we would expect some financial incentives to shield any project proponent from legal costs and cost overruns from potentially endless legal challenges.”
The analysts also aren’t banking on oil sands producers ramping up their output immediately, even though the memorandum of understanding spells out that they will not be subject to a federal emissions cap.
“We view a West Coast pipeline as important for economic sovereignty, but believe it will take some time to materialize.”
BMO Capital Markets Managing Director Randy Ollenberger told a panel last week that costs remain a big unknown, and he’d like to see forensic audits to find out why Trans Mountain and the Coastal GasLink natural gas pipeline to B.C. ended up costing so much more than initially planned.
“It’s great to approve a pipeline, but if you’re going to build a $100-billion pipeline to the West Coast, you’re not going to ship any oil in it and producers aren’t going to support it and fill it up,” he said.
“We can’t build these expensive, gold-plated projects that cost billions and billions of dollars more than they should have cost because we’re moving anthills and birds’ nests and digging up bones along the way. We have to have a much more efficient, streamlined process to build these things so that we can be competitive.”
Questioning the Industrial Carbon Price
Former Alberta premier Jason Kenney said he has questions about the costs to industry from some items in the MOU, beyond the pipeline.
He told reporters he worries oil sands economics could be undermined by the industrial carbon price eventually rising to $130 a tonne in addition to the massive capital that would be needed for the Pathways carbon capture and storage project—a condition for the pipeline.
“Texas doesn’t do that. Russia doesn’t do it. Saudi Arabia doesn’t do it. If the Venezuelan heavy crude industry ever comes back in the future under a new government, they won’t be encumbering themselves with those kinds of costs,” Kenney said Thursday after Prime Minister Mark Carney’s address to a Calgary business audience.
“Does this agreement embed costs that make the future Canadian growth of the industry uncompetitive? That remains to be determined.”
Carney’s remarks appeared to hit the right notes for many of those in the room, as standing ovations bookended his speech.
“He’s begun to weave together an answer to a very complex problem,” Trans Mountain CEO Mark Maki told The Canadian Press Friday.
“We wanted Canada to be an energy superpower and this is a big step in that direction.”
Trans Mountain currently provides Canadian oil producers the only meaningful export access to Asian markets via a marine terminal in Burnaby, B.C. Since an expansion came into service in May 2024, 60% of cargoes have gone to Asia—mainly China—with tankers also heading to Washington state, California, and Alaska, CP says.
Ottawa bought the pipeline for $4.5 billion in 2018 after Kinder Morgan Canada walked away from it amid fierce environmental opposition and court challenges. It ended up costing more than $34 billion by the time it started up in May, 2024.
Trans Mountain and two peers—South Bow Corp. and Enbridge Inc.—are now “advising” the Alberta government in its efforts to see a whole new pipeline of up to one million barrels a day built to B.C.’s north coast, CP writes.
The province has committed $14 million to fund early work on an application to the Major Projects Office in the spring, with the goal of derisking it enough to hand it off to the private sector.
Maki said Trans Mountain brings insight into the construction challenges, as well as how to engage with First Nations.
“One of the really important things that the world can learn from the Trans Mountain experience is the importance of early, open, honest, transparent engagement with Indigenous (communities) about the project, what it does, its importance, what it means to them economically.”
This report by The Canadian Press was first published Nov. 28, 2025.
