Is it really a good idea for the government to subsidize a pipeline?

Rachel Doran is the president and executive director of Clean Energy Canada, a think tank at Simon Fraser University.

Ottawa officially designated a proposed West Coast pipeline as a project of national interest on Thursday. During the announcement in Fort McMurray, Prime Minister Mark Carney cited the pipeline’s economic value.

But the government’s huge subsidization of this project – up to 90 per cent of a $40-billion pipeline with ownership split evenly between Ottawa and Edmonton – lays bare a reality unfolding across the world economy: Fossil fuels aren’t just losing to clean energy. They’ve lost.

In fact, the difference is now a trillion-dollar one.

While global energy investment is on track to reach US$3.4-trillion in 2026, around US$2.2-trillion of that amount is set to go toward clean energy: power grids, energy storage, low-emission fuels, nuclear, renewables, energy efficiency and electrification. According to the International Energy Agency, US$1.2-trillion will go to oil, natural gas and coal – and the future will increasingly favour clean energy.

Pipelines aren’t cheap any more, and for good reason

Even in the face of challenging trade and domestic policies from the administration of U.S. President Donald Trump, Wall Street banks earned US$3.7-billion from climate-related loans and bond underwriting in 2025 – more than the US$2.9-billion generated from fossil fuel financing. This is the fourth year running that green bonds outpaid fossil fuel debt.

But while the share of private energy investment going into fossil fuels has slumped from 50 per cent to 28 per cent over the past decade, fossil fuels now receive about as much money from taxpayers through subsidies as they do from private investors, keeping their costs artificially lower.

A number of polls have shown most Canadians support the West Coast pipeline, but that support is conditional, and most say they’re open to changing their mind. A government-funded pipeline, for example, is far less popular than one backed by private investors.

There’s a lesson in the data for environmentalists too: By far the most persuasive argument against the Alberta-B.C. pipeline tested in a recent Angus Reid survey wasn’t about oil spills or climate goals. It was that “Canada should be investing in renewable energy instead.”

Economics of West Coast pipeline in focus ahead of Ottawa major project decision

Independent analysis has called into question the financial viability of this pipeline, and the federal government hasn’t offered much in the way of math, but what we do know is that there will be an opportunity cost. Public dollars and government attention are notoriously finite.

On paper, the clean economy is well represented in Ottawa’s major projects push. Most of the 18 projects and 10 longer-term “transformative strategies” before the Major Projects Office are in clean energy, critical minerals or infrastructure, and the government plans to double the grid by 2050. But this government’s most pressing actions are on the fossil fuel side of the ledger.

The three fossil fuel projects on the list – LNG Canada’s expansion, Ksi Lisims LNG and this week’s proposed oil pipeline to the B.C. coast, together worth about $100-billion – are moving now. The first and so far only project Ottawa has formally listed as in the national interest under the Building Canada Act is an oil pipeline. Much of the clean economy’s biggest project value, by contrast, sits years out.

That’s out of step not only with Canada’s future aspirations, but with present global trends.

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Yes, oil is our biggest export, but its contribution to Canada’s GDP combined with gas was 3.8 per cent in 2025. All told, 56,000 Canadians worked directly in oil and gas extraction in 2025, compared with 108,000 in electric power generation, transmission and distribution, according to Statistics Canada.

What’s more, times are changing – and pipelines take time.

Today’s investments will shape tomorrow’s economy for better or worse. Since shipping disruptions began in the Strait of Hormuz, at least 25 countries have in the last six months introduced measures to further electrify their economies as a hedge against fossil fuel volatility. This is the global direction of travel.

It’s not that this government entirely fails to realize this. Mr. Carney has clearly stated his ambition to make Canada a clean energy superpower. But it gets back to that old saying: Actions speak louder than words. And a dollar – give or take $40-billion – spent on a pipeline is a dollar not invested somewhere better.