Chatham House: Carney'nin boru hattı kumarı vergi mükellefleri için riskli

Why Carney’s pipeline gamble is a bad bet for Canadian taxpayers

Why Carney’s pipeline gamble is a bad bet for Canadian taxpayers Expert comment jon.wallace 13 August 2026 Tensions with the US and Alberta are leading Prime Minister Carney to back new oil and gas infrastructure. Smoothing the path to electrification would be a better use of public funds. Since taking office in January 2025, Prime Minister Mark Carney has steered Canada’s energy policy away from reducing emissions towards increasing fossil fuel exports. Some would argue that he had little choice. The Canadian economy is under pressure amidst the trade war launched by the administration of President Donald Trump. Carney took office with a mandate to de-risk Canada from the increasingly hostile United States, which buys over 90 per cent of Canada’s crude oil exports, and practically all its natural gas exports. Additionally, the prime minister had to address a significant domestic issue: relations between Ottawa and Alberta, the province responsible for three-quarters of Canadian oil and gas production, had become increasingly toxic. But Carney’s pivot may backfire, for one simple reason. The new markets Canada is relying upon for export growth will not buy imported oil and gas forever. And they may reduce their consumption sooner than anticipated. Pouring taxpayer money into export infrastructure, largely to the benefit of foreign companies, doesn’t de-risk Canada’s economy. It risks swapping dependence on the US for other uncertain foreign markets. Export focus Carney is seeking to diversify the customer base for Canadian oil and gas away from the US by increasing the capacity for seaborne exports from Western Canada. In July, Alberta and Ottawa agreed a new east-to-west oil pipeline, projected to carry 1 million barrels a day (b/d) of crude, following the route of the existing Trans Mountain pipeline. Officials expect operations to begin in 2033 or 2034. The pipeline, along with major liquefied natural gas (LNG) infrastructure already under development in British Columbia, has been fast-tracked through the newly created federal Major Projects Office. Related work The Climate Briefing: Climate change, energy and geopolitics Significant public spending has been dedicated to the task, on the grounds that what is spent will be returned to the public purse many times over in royalties, tax receipts, and economic growth. The new oil pipeline is expected to cost between 35 to 44 billion Canadian dollars (C$), of which most is set to be borne by the public, as was the case with the Trans Mountain pipeline expansion. Meanwhile federal and provincial support for the LNG drive is expected to reach C$4 billion by 2031. And new tax breaks incentivizing oil and gas production have also been introduced. The government calls these projects ‘nation-building’. But foreign companies and investors will be among the primary beneficiaries. LNG Canada is a joint venture of Shell, PETRONAS, PetroChina, Mitsubishi Corporation and the Korean Gas Corporation. Ksi Lisims LNG, a proposed export terminal in British Columbia, is set be built, owned and operated by wholly-owned subsidiaries of Texas-based Western LNG, according to reports and government documents. Indeed, nearly 60 per cent of Canada’s oil and gas production is owned by American private equity. Of course, the export strategy dovetails with a domestic political imperative. The Albertan independence movement saw surging support during the tenure of Carney’s predecessor, Justin Trudeau. Carney will hope that by supporting major new investments that benefit the province’s energy industry, and by weakening climate policies, he can neutralize the threat of secession. Flawed logic There would be a clear economic, political and geopolitical logic to Carney’s strategy – if taxpayers could be assured of robust, long-term demand for Canada’s oil and gas in new markets. But that looks uncertain. Canada is pinning its hopes on Asia: giants like China and India; and fast-growing Southeast Asian nations like Indonesia, Thailand and Vietnam. Indeed, in 2018 the International Energy Agency (IEA) predicted that electricity generated by gas in Asia would have grown by 547 TWh by 2025. In 2018 the IEA predicted that electricity generated by gas in Asia would have grown by 547 TWh by 2025… in fact, it grew by a mere 17 TWh. But in fact, it grew by a fraction of this, a mere 17 TWh. And the outlook today is not encouraging. Wood Mackenzie estimates that only 15 GW of 53 GW of gas-fired electricity generation capacity planned in Southeast Asia for 2030 will be delivered, due to volatile gas prices, financing shortfalls, and equipment shortages. It is true that the Strait of Hormuz shock has put a premium on reliable oil and gas supplies. But the crisis has also incentivized importing nations, which include most in Asia, to insulate themselves against future shocks, including through renewable energy and electric transport. In 2018, the IEA estimated solar generation in Asia would grow by 465 TWh by 2025. Instead, it grew by 1,333 TWh. The growth in sales of electric vehicles (EVs) has been no less impressive. In China, the largest importer of oil, most new cars sold are already electric. EV sales in Southeast Asia more than doubled in 2025. Solar panels and batteries destroy demand for gas. EVs do the same for oil. Falling demand means falling prices. Carney’s fossil fuel plans therefore expose Canadian taxpayers to risks of value erosion and stranded assets that could cost Canada 30 per cent of the sector’s total value under a fast-paced energy transition scenario. The PM should not expose the Canadian taxpayer to such risk. It is certainly not justified solely by the prospect of Albertan secession, with just 18 per cent of Albertans supporting separation according to one recent poll. Carney should instead channel public investment into a much safer bet: electrification. Competitive advantage According to Natural Resources Canada, Canada has the lowest-cost residential power (2024), the second lowest-cost industrial power (2024) and the second highest share of non-emitting electricity generation (2023) in the G7, thanks to a high share of hydro and nuclear power generation. Affordable electricity makes the country attractive to energy-intensive growth industries like EV manufacturing, critical minerals mining, green hydrogen production and AI data centres. Montreal, for example, has cheap hydro rates (6 cents per kWh) and attracted C$1.7 billion in AI-related foreign direct investment between 2018 and 2024. Canada’s low emission power mix is also a strategic advantage as markets like the EU increasingly price carbon on imported goods. But future gains will be limited if Canada does not properly invest in its fragmented, costly and unreliable electricity grid. Investing in electrification Carney’s government is aware of the problem. A National Strategy for an Electrified Canadian Economy launched in May plans to double Canada’s electricity system infrastructure to accommodate rapidly growing demand. The federal government has limited jurisdiction over electricity systems. That means that provincial utilities must lead the way in investing in the new grid, which will require an estimated C$1 trillion by 2050. Under current arrangements, these investments will be recovered as levies added to electricity bills. The risk to meeting the Canadian electrification challenge is therefore that significant upfront investments translate into higher prices for citizens and industry, undermining the case for electrification. The federal balance sheet should be used not to underwrite new pipelines, but to ‘smooth’ these predictable electrification costs. A Powering Canada Forward Fund, as proposed by the Canadian Climate Institute, would hold electricity prices steady for consumers as provincial utilities invest in the grid. As the system expands, and as more electricity is consumed, the public investment could be gradually repaid by a growing customer base. This approach would use public funding smartly to ensure that the costs of tomorrow’s grid are not disproportionately borne by today’s consumers. Federal support should also prioritize connecting provincial grids. Canada trades more electricity with the US than it does between provinces. Improving interprovincial transmission will enable Canada to capture more of the value of its energy system domestically, while still exporting surplus power to the US. Electrification offers a double comparative advantage: cheap, low-carbon power that is independent of Asian and US markets and of benefit to all of Canada – including Alberta. Securing this will require investing in the nation-building infrastructure of the future, not that of the past.