CALGARY — Analysts at CIBC Capital Markets say they don't expect the private sector to take the lead on a new West Coast oil pipeline while the British Columbia government and First Nations oppose it.
“The requirement to consult with British Columbia and Indigenous groups is necessary and logical,” they wrote in a report Friday, a day after Alberta and the federal governments signed a memorandum of understanding on a wide range of energy policy issues.
“The memorandum of understanding contains nothing resembling judicial reform and therefore appears to rely on the Canada Build Act and the pre-existing duty to consult with First Nations to avoid endless legal challenges.”
The federal Canada Building Act, which created a new Major Projects Authority this summer to speed up construction of “nation building” infrastructure, remains “untested,” analysts wrote.
Meanwhile, the constitutional duty to consult with Indigenous peoples is “controversial and unclear,” they added. The lawsuits led to delays in the defunct Northern Gateway project to British Columbia's north coast more than a decade ago, as well as the Trans Mountain pipeline that now carries oil sands oil to the Vancouver area.
“Before any company on our list embraces financial involvement in a pipeline project as politically charged as this one, we would at least like to see some agreement between Alberta, British Columbia and First Nations groups,” the CIBC report said.
“Recognizing that this is unlikely, we expect that some financial incentives will protect any proponent of the project from legal costs and cost overruns due to potentially endless legal challenges.”
Analysts also don't expect oil sands producers to ramp up production immediately, even though the memorandum of understanding states they won't be subject to federal emissions limits.
“We believe the West Coast pipeline is important for economic sovereignty, but we believe it will take some time to get to fruition.”
BMO Capital Markets Managing Director Randy Ollenberger told the commission earlier this week that costs remain a big unknown and he would like to see a forensic audit to find out why Trans Mountain and the Coastal Gas Link pipeline to British Columbia ended up costing so much more than originally 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 move oil through it, and producers aren't going to support it and fill it,” he said.
“We can't build these expensive gold-plated projects that cost billions and billions of dollars more than they should cost because we're moving anthills and birds' nests and digging up bones along the way. We need a much more efficient and streamlined process for building these things so we can be competitive.”
Former Alberta Premier Jason Kenney said he has questions about the costs to industry for some parts of the Memorandum of Understanding that go beyond the pipeline.
He told reporters he was concerned that the economics of the oil sands could be undermined by the price of industrial carbon, which would eventually rise to $130 a ton in addition to the huge capital that would be required for the Pathways carbon capture and storage project – a condition for the pipeline.
“Texas doesn't do it. Russia doesn't do it. Saudi Arabia doesn't do it. If the Venezuelan heavy oil industry ever returns in the future under a new government, they won't burden themselves with that kind of expense,” Kenney said after Prime Minister Mark Carney addressed a business audience in Calgary.
“Does this agreement include costs that will make future growth of the Canadian industry uncompetitive? That remains to be determined.”
This report by The Canadian Press was first published Nov. 28, 2025.
