Trans Mountain Expansion's Impact is a Good Lesson for Canadians Concerned About Our Economic Future

Trans Mountain Expansion's Impact is a Good Lesson for Canadians Concerned About Our Economic Future

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Trans Mountain Pipeline’s Positive Economic Impact is a Good Lesson for Canada

After 12 long years, the Trans Mountain Pipeline Expansion (TMX) finally crossed the finish line. It was a nail-biter, that’s for sure.

At times, it wasn’t clear that the pipeline would finish construction. Opposition campaigns against TMX were well-coordinated and funded, with little regard for the facts. Numerous court challenges, regulatory delays, and obstructive protests threatened to stall or even cancel the project outright.

But now that TMX is operational, Canadians see just how impactful the pipeline has been on the economy – and how it is living up to promises that energy development obstructionists said wouldn’t happen.

Let the TMX be a clear example for Canadians of how major natural resource developments, like pipelines, can significantly improve our economic prosperity while supporting resource security and strengthening our position as a go-to energy supplier.

#1 - Maximizing the Value of Our Resources

Trans Mountain Pipeline Expansion is maximizing the value of Canada's natural resources

By providing more shipping capacity to tidewater, the TMX has improved Canadian oil producers' access to global pricing dynamics and reduced the oil price discount, helping to maximize the value of our energy resources.

According to Charles St-Arnaud, Chief Economist with Alberta Central, TMX reduced the price differential between Canadian oil - also known as Western Canada Select (WCS) - and the U.S. benchmark price of West Texas Intermediate (WTI) by about USD $8 per barrel. By the end of 2024, this translated into CAD $10 billion of extra revenues for Canadian producers [1].

Previous estimates of the oil price discount’s adverse impact on the Canadian economy showed our country was losing billions. Scotiabank, for example, projected losses of up to $15.6 billion per year [2], while the Canada Energy Regulator (CER) said that not building new pipelines would cost the Canadian economy $240 billion between 2016 and 2040 [3].

In 2023, Canada exported approximately 81% of its oil production or 4 million barrels per day (bpd) [9], almost all of which went to the U.S.

Fetching a higher price for every exported barrel quickly adds up for the Canadian economy to the tune of tens of millions of dollars a day.

#2 - Contributing Massively to Economic Growth

Apart from the extra several billion dollars yearly that will now be generated in Canada due to a narrowing of the oil price discount, the TMX has left a lasting impact on the Canadian economy.

Soon after the pipeline began operations, the Bank of Canada predicted a 0.25 percentage point increase in second-quarter economic growth from the new pipeline – more than the entire province of British Columbia over the same period, at 0.23 percentage points [3].

Like renowned Canadian economist Trevor Tombe said in The Hub: “That is no small move for a nearly $3 trillion economy.”

To outperform an entire province is incredible to say the least, and even so, despite B.C.’s own recent economic challenges.

#3 - Invaluable Job & Business Opportunities

Trans Mountain Pipeline Expansion is Creating Invaluable Job & Business Opportunities

The TMX project has benefitted Canadian and Indigenous families in several ways, as shown by the pipeline’s latest facts and figures:

  • Nearly 38,000 people have worked on the pipeline expansion, including nearly 3,670 Indigenous people [5]
  • During TMX construction, Indigenous peoples represented 10% of workers hired [4]
  • Over 20% of TMX construction contracts were spent with Indigenous contractors, resulting in more than $6 billion in spending with Indigenous businesses and partnerships between 2016 and 2024 [4]
  • An estimated $11 billion was spent on wages during TMX’s construction and an additional $3.7 billion is expected to be spent on operations through 2043 [6]
  • Upon completion, 440 long-term direct jobs will be created by the pipeline for operations over the first 20 years [6]
  • TMX is expected to generate a total of $5.7 billion in tax revenues over the next two decades [6]
  • TMX had reached benefit agreements with dozens of Indigenous communities along its route, valued at more than $600 million [6]

The question remains: given TMX’s enormous economic impact, how many more economic opportunities would have been created for Canadian families if the Northern Gateway and Energy East pipelines had been built?

At this point, we can only imagine, but prior estimates pegged the Northern Gateway’s total economic impact at $300 billion over its lifetime.

#4 - Building Up Our Communities

Natural resource projects provide local communities with many benefits, including long-term support through various grants, donations, and volunteerships.

The TMX pipeline’s benefit agreements with local municipalities, for example, have allocated over $16 million to communities [7], which include:

  • Funding for emergency response equipment in Kamloops
  • Improvements to recreational facilities in Hope
  • Donations to help assist addiction programs in Chilliwack
  • Support for educational programs in Indigenous communities
  • Training and equipment for local fire departments in several B.C. municipalities
  • Contributions to local food banks to support those in need

The examples above are just a few of many showing how TMX has profoundly impacted local communities. In 2024, TMX supported 139 organizations and local community initiatives, contributing about $620,000 in financial assistance and in-kind donations.

#5 - Opening Up New Markets for Our Resources

Trans Mountain Pipeline Expansion is opening up new markets for Canadian energy

The Trans Mountain Pipeline Expansion has helped boost Canadian oil exports to Asia, allowing Canada to diversify its oil market beyond the U.S. and fetch a higher price for our oil. To date, China, India, Brunei, South Korea, Japan, and the United States have all bought shipments from the TMX, showing the demand for Canadian crude abroad is alive and well.

The pipeline is also reducing flows off the U.S. Gulf Coast, where, historically, Canadian oil has been sold by the Americans to buyers abroad. For example, as of September 2024, China had bought 8.24 million more barrels of Canadian crude since TMX began operations, including 11.6 million more barrels off the B.C. coast and a reduction of 3.35 million barrels via the Gulf [11].

U.S. imports of Saudi oil have also hit a four-year low as Californian refiners turn to the TMX pipeline for feedstock [10], bolstering North American energy security.

Narrowing the oil price discount, exporting more oil from our shores, and enhancing regional energy security is a win-win-win for Canada. 

Canadians Wins When Major Projects Like TMX Get Built

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The Trans Mountain Expansion is a powerful testament to how major natural resource projects can transform Canada's economic landscape. From narrowing oil price differentials to contributing more to economic growth than an entire province to opening up new markets for our resources, TMX demonstrates the profound impact of seeing these critical projects through to completion.

As Canadians, we are fortunate to possess a vast wealth of natural resources that can drive our economy forward and usher in a brighter, more prosperous future for our families.

The success of TMX serves as a clear reminder that we must continue to develop our energy, forestry, mining, and agriculture sectors to secure our economic future and empower our communities and generations to come.

Maximizing the value of our natural resources through projects like the Trans Mountain Pipeline Expansion is the smart thing to do.

SOURCES:

1 - https://www.cbc.ca/news/canada/calgary/trans-mountain-pipeline-expansion-tmx-revenues-st-arnaud-1.7434823

2 - https://financialpost.com/commodities/energy/a-self-inflicted-wound-pipeline-delays-to-cost-canadian-economy-15-6b-in-2018-says-scotiabank

3 - https://thehub.ca/2024/04/30/trevor-tombe-the-trans-mountain-pipeline-was-worth-every-penny/

 4 - https://www.canada.ca/en/department-finance/news/2024/11/remarks-by-the-deputy-prime-minister-at-the-standing-committee-on-natural-resources-regarding-the-trans-mountain-expansion-project.html

5 - https://www.transmountain.com/past-project-tmep

6 - https://www.canadianenergycentre.ca/a-matter-of-fact-the-trans-mountain-expansion-is-good-for-canada/

7 - https://www.transmountain.com/tmep-benefits

8 - https://www.transmountain.com/news/2025/trans-mountain-community-investment-2024-year-in-review-creating-stronger-communities

9 - https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2024/market-snapshot-almost-all-canadian-crude-oil-exports-went-to-the-united-states-in-2023.html

10 - https://www.pipeline-journal.net/news/us-oil-imports-saudi-arabia-hit-near-four-year-low-refiners-turn-tmx-pipeline

11 - https://www.bnnbloomberg.ca/business/international/2024/09/16/canadas-new-oil-pipeline-tilts-flows-to-asia-away-from-us-gulf/