When the Trans Mountain pipeline expansion was first proposed, its cost was pegged at between $5 and $8 billion. Today, with the project finally complete and pumping oil, the tab sits north of $30 billion. That sixfold increase, says Adam Pankratz of UBC’s Sauder School of Business, is a symptom of a deeper problem.
“No private business could ever tolerate that and survive,” he says. “For my students, it’s revealing. They begin to see how poor regulation and a lack of certainty can destroy a project to the point where government had to nationalize it just to see it built.”
A decade of drift
What went wrong? According to Pankratz, the blame lies largely in Ottawa’s corner. “The company behaved very well. It was the government that screwed up — mainly by failing to consult Indigenous people in good faith,” he says. The resulting court challenges, coupled with “very coordinated environmental movements,” produced a decade-long slog of delays, reviews, and shifting goalposts. That paralysis has come at a steep cost.
So far this year alone, the expanded Trans Mountain has generated $12.6 billion in new revenues for the oil sands. “That’s direct royalties,” notes Pankratz. “But those companies also pay taxes. Their workers pay taxes. The communities where they operate benefit.
The effect of having that much more oil moving and that much more activity has massive implications for the Canadian economy.” In other words, Trans Mountain is already proving its worth — despite the hurdles placed in its path.
When politics picks winners
Pankratz sees irony in the federal government’s recent attempt to streamline approvals for major projects. “It’s a massive indictment of Canada’s regulatory process,” he says. “Now we have new programs that open the door for cabinet ministers to cherry-pick projects — not necessarily the best ones, but those that fit some political narrative.
That’s not the kind of certainty investors are looking for.” The pattern repeats itself across the resource landscape. Ottawa talks up the energy transition, but bans oil tankers off the north coast while approving imported oil from places with far worse records. The United States, meanwhile, has built nine LNG export terminals; Canada has managed just one.
The power gap
Then there’s the electrification paradox. “It took decades to get the Site C dam approved and built,” Pankratz points out. “If we want to meet the government’s electric-vehicle mandates, we’ll need at least one more dam that size — probably two or three. Each costs around $16 billion.” The math doesn’t work without a clear, accelerated path for building infrastructure.
Shared prosperity or lost opportunity
Amid these structural failures, Pankratz sees a ray of hope in Indigenous partnerships. “When First Nations benefit from a mine, a pipeline, a forestry project — whatever it is — the province benefits too,” he says. “Do this right and there’s a massive lift in economic activity. It’s a wonderful opportunity for British Columbia that we’d be crazy not to take advantage of.”
The lesson
Trans Mountain’s tortured journey is more than a case study in mismanagement — it’s a warning. A country that cannot build the infrastructure it needs will soon find itself watching opportunity flow elsewhere. The payoff from getting it right, both economically and socially, is already visible in the oil now flowing through that long-delayed pipeline. The question is whether Canada has the will to learn from its own mistakes.
- Now watch Adam Pankratz’s full video interview with Stewart Muir on Power Struggle here: https://www.youtube.com/watch?v=Nj-KgF967AU
- Audio and full transcript: https://ow.ly/eMB350Xizl7
- Power Struggle on X: https://ow.ly/tU3R50UWpVu
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