Prime Minister Mark Carney and Alberta Premier Danielle Smith say the proposed Pacific Link pipeline could open a new phase of oilsands growth, but the project has drawn objections over Indigenous consultation, climate impacts, public financing and its timing ahead of Alberta’s Oct. 19 referendum. The million-barrel-per-day pipeline would run from Alberta to a tanker export terminal on southern British Columbia’s coast. Ottawa designated it a project of national interest on Thursday, making it the first proposal to receive that status under legislation passed last year and placing it in a streamlined review process led by the Calgary-based major projects office.

The designation could allow construction to begin as soon as next September. Smith presented the announcement as evidence Alberta can secure a favourable deal from the federal government. Carney pointed to potential economic returns, saying, “the Canadian taxpayer is going to make a lot of money off this pipeline.” Reaction from political and energy circles was largely positive, while some Indigenous and environmental organizations and Alberta separatists expressed opposition or reservations.

The proposal’s economic prospects depend on whether oilsands companies decide to spend on expanding production. At a news conference in Fort McMurray, Alta., Carney was asked whether the northeastern Alberta city could see another boom. “I wouldn’t use the term ‘boom,'” he said. “I would use ‘sustained growth.’” Carney and Smith said any expansion would unfold differently from the last major boom, which ran from the mid-2000s to the mid-2010s and was accompanied by rising costs, worker shortages and a lack of housing.

Companies have avoided the multibillion-dollar megaprojects common more than a decade ago. Fort Hills, operated by Suncor Energy Inc., was the last oilsands mine built from scratch. After receiving final approval in 2013, it started up in 2018; its cost grew to more than $17 billion from $13.5 billion. More recently, producers have focused on modifying existing operations to extract more bitumen or expanding their current sites instead of starting “green field” developments.

Industry executives have cited limited pipeline capacity, a complicated regulatory system and demanding environmental rules as reasons for restrained investment. Around the time investment slowed about a decade ago, global crude prices also plunged during a supply glut. Prices had little time to recover before the COVID-19 pandemic nearly erased demand. By 2026, the war in the Middle East had exposed vulnerabilities in global energy supply chains and prompted countries to seek stable suppliers. Energy policies introduced under former prime minister Justin Trudeau that oilpatch companies opposed have since been undone, and Pacific Link has advanced a step toward reality, potentially giving oilsands crude greater access to lucrative Asian markets.

“We learned lessons from the past in building infrastructure,” Carney told reporters Thursday. He said mayors were planning for community needs and early participation by First Nations leaders meant “a much broader spread of the economic benefits.” He also pointed to a new phase of technical innovation in the industry. Smith, speaking with autonomous oilsands haul trucks behind her, said companies had found ways to raise production without the same pressure to bring large numbers of people into the region. In the past, drivers of the giant vehicles could earn six-figure salaries and be flown in from elsewhere in Canada to live in work camps for one or two weeks at a time.

Smith said she had discussed possible bridge and road needs with municipal leaders if output rises. She cited possible upgrades to Highway 881, east of the main Highway 63 route north, which passes several steam-driven oilsands sites south of Fort McMurray. “There’s lots of ways that we can partner with the federal government to make sure those key infrastructure projects get built, so we build on a pace that allows us to keep up,” she said.

Andrew Botterill, head of Deloitte Canada’s oil, gas and chemicals practice, said producers are more efficient and aligned than they were 10 or 15 years ago. “They’ve come together as an alliance and really recognize that ‘We’ve got to share labour, we’ve got to be less competitive, we’ve got to find ways that we can do things together and not just drive up costs,'” he said. Oilsands assets are also held by fewer companies than a decade or more ago. Husky and MEG Energy were among former producers that were acquired, while Shell and Total have left the sector or greatly reduced their holdings.

Lance Mortlock, managing partner at EY Canada, raised questions about whether enough workers would be available if several major developments proceed. The potential workforce demand includes Pacific Link and new oilsands projects, as well as mines, transmission lines and hydro dams. “We’re going to need tens of thousands of workers across the country to build this stuff: engineers, professionals, welders, pipe fitters. I’m not sure where all these people are going to come from if we do half the projects that we have the desire to construct,” he said. “So I’m hoping that there’s going to be more conversation about the workforce and more conversation about how do we sequence these things so we optimize the system from a labour force perspective?”

Keith Wilson, co-leader of separatist group Let Alberta Decide, questioned on social media why the announcement came so close to the Oct. 19 referendum and warned about the project’s possible public cost. “That timing deserves scrutiny. It’s Ottawa playing politics to get Albertans to forget about decades of mistreatment and how Canada does not work for Alberta,” he said. Wilson later said he hoped the pipeline would ultimately be built, while pointing to the lack of a majority private proponent. “Taxpayers are now on the hook for the overwhelming majority of the initial ownership interest, while major questions remain about final financing, new B.C. tolls on Alberta oil, shipper commitments and the ultimate cost.” Asked about the referendum’s possible response to the project, Carney said it showed Canada was working, a message Smith also supported. Smith said, “The approach that I’ve seen the government of Canada take is one whether we genuinely want to identify problems and genuinely solve them.”

Both leaders raised the prospect of Indigenous investment and ownership. Carney said the major projects office had received more than 100 submissions from Indigenous rights holders and consulted more than 130 Indigenous communities near or along the route to B.C.’s South Coast. Sturgeon Lake Cree Nation, in a statement posted Thursday, called the announcement a “foregone conclusion” and questioned whether meaningful consultation could take place. “This is treaty land, and that free, prior, and informed consent is not achieved through ‘loan guarantees’ or ‘conditions.’ We are governments and Nations, not investors or stakeholders,” the statement said. The Nation said some First Nations chiefs attended Thursday’s announcement, but their leaders were not invited. It asked Albertans whether they would accept a pipeline through their backyards without consultation or a data centre across the street without a thorough environmental assessment, and why First Nations should welcome the pipeline.

The Union of B.C. Indigenous Chiefs also called the project “toxic.” Grand Chief Stewart Phillip said it had set aside core principles of respect and shared communication and would take up lands in their territories without credible consultation. He said legal action could follow. “We have a duty and an obligation to protect our rights to the fullest extent of the law and we have every intention of doing that. This is not a cakewalk. This is not a ‘gimme.’ This will be hard-fought in the courtrooms, and if necessary, with boots on the ground.” Athabasca Chipewyan First Nation Chief Allan Adam voiced support after meeting Carney a day before the announcement, saying he began with “serious concerns, but left encouraged.”

Carney has said since Pacific Link was proposed that it must be accompanied by the Alberta-based Pathways carbon capture and storage project, which he says would offset increased oilsands emissions. The Pembina Institute, a clean energy think tank, accused the federal government of avoiding its own rules. It argued the pipeline would not “contribute to clean growth and to meeting Canada’s climate objectives,” as required by the Building Canada Act. “Even if the downsized Pathways carbon capture project is one day operational, the new pipeline will substantially increase greenhouse gas emissions from the Alberta oilsands, which are already Canada’s single largest driver of climate change,” said the institute’s Janetta McKenzie. She said Canadians should examine why private companies have declined to invest in a project she described as high-risk and high-cost, adding that a weaker global oil-demand outlook had made its business case impossible to sell to shareholders.

Ecojustice lawyer Margot Venton warned that the pipeline and increased marine traffic could affect the Salish Sea. She said a spill involving crude carriers “would be catastrophic for the entire region.”

Based on reporting by Edmonton Journal and Global News Edmonton.