Energy East and GNL Québec could have redirected $38.4 billion worth of energy products per year to markets other than the United States, according to the MEI
A new study by the Montreal Economic Institute shows Canada missed out on nearly $40 billion a year in energy exports by failing to build two major pipelines.
The report says the Energy East and GNL Québec projects would have reduced Canada’s reliance on the United States as a sole energy customer. In 2023, the USA accounted for 97 per cent of the country’s oil exports and 100 per cent of its natural gas exports.
“Canada’s high level of dependence on U.S. trade is not unavoidable,” said Gabriel Giguère, a senior policy analyst and author of the report. “It is the direct result of years of policy decisions that have delayed or actively impeded major infrastructure projects.”
Energy East was cancelled in 2017 and would have transported oil from Alberta to refineries in Eastern Canada, allowing exports to reach European markets. The report estimates the project could have diverted 27.7 per cent of Canadian oil exports away from the U.S., representing $36.7 billion annually.
GNL Québec, a liquefied natural gas (LNG) project, was rejected in 2021. Had it proceeded, it could have been operational as early as next year, with the capacity to redirect 19.4 per cent of Canadian gas exports to Europe, valued at $1.7 billion annually.
The report argues that the projects should be reconsidered amid escalating U.S. tariff threats and increasing global demand for Canadian energy.
“Trump has demonstrated that the U.S. is not as dependable a trading partner as we have long believed,” Giguère said. “Canada needs new infrastructure to increase its resilience.”
Recent statements from countries like Japan, South Korea, Germany and Poland indicate strong international interest in Canadian energy resources. According to the report, expanding into these markets would reduce Canada’s exposure to shifting U.S. trade policies.
The report also points to a shift in public sentiment. A recent SOM-La Presse poll suggests that a majority of Quebecers now support revisiting the Energy East and GNL Québec projects.
Despite the potential economic benefits, Giguère cautions that current federal policies, including the government’s emissions cap, make new projects difficult to pursue.
“Both provincial and federal governments will need to consider this new reality when evaluating energy transmission projects,” he said.
Canada is the world’s fourth-largest producer of oil and fifth-largest producer of natural gas, yet nearly all of its energy exports are funneled to the United States. The Montreal Economic Institute says new pipelines could change that, providing access to European and Asian markets while strengthening Canada’s energy security.
A number of political pundits suggest pipelines and energy resources will be a major topic of the current federal election.