Why Was the Northern Gateway Pipeline Cancelled?

What Was the Northern Gateway Pipeline?

Northern Gateway was a proposed pipeline project in Western Canada, consisting of two pipelines stretching 1,177 kilometres between Alberta and the West Coast. The $7.9 billion project included ^[1]:

• A western-flowing pipeline with a capacity of approximately 525,000 barrels of oil per day for export off the coast to buyers in Asia and the U.S.
• An eastern-flowing pipeline that would carry about 193,000 barrels per day of natural gas condensate
• The construction of a new marine terminal for oil exports in Kitimat, B.C.
• An estimated $300 billion in economic activity for Canadians over its lifetime ^[6]
• Support from 80% of Indigenous groups along the path of the pipeline ^[5]

Top 3 Lessons Learned from Northern Gateway’s Failure

What can Canadians learn from the Northern Gateway’s failure that will help us get future pipeline projects built?

#1 - A Majority of Indigenous Groups Supported the Project

Canada’s federal government approved Northern Gateway in 2014 after rigorous consultation with affected Indigenous communities.

The level of government consultation with First Nations was arguably the most extensive of any natural resource project up to that point in Canadian history ^[5]. Apart from the government, Northern Gateway’s proponent also engaged in its own extensive consultation process. As a result, the pipeline won widespread support from Indigenous communities along its route, reaching 80 per cent.

But like all other pipeline projects in Canada over recent years, Northern Gateway was mired by legal challenges from opponents. The most notable court case was decided in June 2016, where the Federal Court of Appeal, in a split decision, quashed the pipeline’s approval, sending it back to federal cabinet for review.

According to the Court’s decision, a re-do of Indigenous consultation was all that was needed to move the project forward as part of an appeal and would take only four months to complete ^[3].

Despite four out of five Indigenous communities supporting Northern Gateway, the federal government decided that the pipeline was “not in the public interest” - although the facts showed otherwise.

Many Indigenous groups were devastated by the government’s decision ^[8]. More than 30 out of the 42 bands along the pipeline’s route were looking forward to sharing in its construction and long-term benefits ^[8].

#2 - The Rule of Law Should Be Respected

After a decade of planning and more than $500 million in spending on initial regulatory steps, Northern Gateway’s cancellation was a major blow to First Nations who supported the project ^[8].

According to Indigenous leaders, the pipeline’s cancellation was more of a political decision, not one “acting in the best interests of Canadians.” There was also a lack of consultation from the federal government with communities that supported the project ^[8]. Many bands considered legal action against the government for rejecting the project without proper consultation ^[8].

With approval in 2014, the federal government’s decision in 2016 should have been consistent with the pipeline’s extensive original regulatory evaluation process, showing the world Canada is a reliable jurisdiction in which to invest.

Canada needs to revive timely regulatory processes that provide investors with a level of certainty that their projects will be approved. It is hard to imagine that any company would spend half a billion dollars on a project if there were dire risks involved with the regulatory approval.

Examples like Northern Gateway and Energy East will make it difficult to attract major capital investors to build pipelines in Canada, unless significant regulatory changes occur.

#3 - Canada is Left Behind While Other Nations Benefit

Northern Gateway opponents ran an extensive campaign against the pipeline, pressuring elected leaders to cancel it outright through various means, such as public protests. These groups made many polarizing claims, suggesting that the project was “not needed” ^[9] or that it would result in a “catastrophe” on land or off the coast despite Canada’s exemplary record on pipeline safety.

They couldn’t have been more wrong. Today, global oil demand continues to hit new record highs – growing by nearly 9 million bpd since the federal government rejected the pipeline in 2016.

Canada could have supplied more energy to the world via Northern Gateway, but instead chose to cede oil market share to other jurisdictions abroad - missing out on immense economic benefits in the process.

Oil Demand Growth Since 2016

Since the cancellation of Northern Gateway, global oil demand has grown from 95.7 million bpd (mbpd) in 2016 to 104.46 mbpd in 2024 ^[4]. Several projections expect global oil demand to grow even further over the decades to come.

Obstructing Canadian pipelines like Northern Gateway has done nothing to stop global oil consumption growth. Instead, shutting down these projects has weakened Canada’s export-based economy over the long haul while ceding massive economic opportunities to other jurisdictions abroad.

If built, Northern Gateway would have helped insulate Canada from U.S. tariffs, making our economy stronger and less reliant on our largest trading partner.

Canada Needs a New Northern Gateway

Canada now has an opportunity to either revive Northern Gateway or develop a similar project to help diversify our international export markets and strengthen our economy over the long term.

With a struggling economy and productivity crisis on our hands, it’s time for Canadians to build new pipelines and maximize the value of our natural resources. Canada’s future prosperity depends on it.

We must work together to secure our own economic future.

Expediting ports, pipelines, roads, and railways allows us to maximize the diversification potential of our mining, energy, forestry and food production.

Let’s take control of our future economic security. pic.twitter.com/ZvgfjOTTpX

— Canada Action (@CanadaAction) February 5, 2025

SOURCES:

_{1 - https://www.cbc.ca/news/canada/british-columbia/majority-of-aboriginal-communities-sign-on-to-northern-gateway-1.1145847}

_{2 - https://natural-resources.canada.ca/our-natural-resources/energy-sources-distribution/fossil-fuels/pipelines/energy-pipeline-projects/northern-gateway-pipelines-project/19184}

_{3 - https://www.oktlaw.com/northern-gateway-approval-quashed/}

_{4 - https://www.statista.com/statistics/271823/global-crude-oil-demand/}

_{5 - https://www.fraserinstitute.org/commentary/northern-gateway-pipeline-and-purpose-duty-consult}

_{6 - https://globalnews.ca/news/1381229/facts-and-figures-on-the-northern-gateway-pipeline/}

_{7 - https://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/145744/index.do}

_{8 - https://financialpost.com/commodities/energy/we-are-very-disappointed-loss-of-northern-gateway-devastating-for-many-first-nations-chiefs-say}

_{9 - https://financialpost.com/commodities/energy/canadian-oil-producers-plead-for-northern-gateway-approval}