Ottawa is giving its blessing for a new pipeline that will link Alberta’s oilsands to the West Coast, tapping the project for a streamlined approval process in the first test of expansive regulatory powers introduced after the 2025 election.

Prime Minister Mark Carney announced on Thursday that the pipeline – now referred to as the Pacific Link – had been officially listed under the Building Canada Act, setting off a one-year clock for the new Major Projects Office to develop a binding conditions document.

That is set to replace the permits the project would require under various laws, including the Canadian Energy Regulator Act, the Fisheries Act, the Species at Risk Act, the Canada Marine Act and Canadian Environmental Protection Act.

It’s the first time the government has listed a project under the Building Canada Act, known also as Bill C-5, and comes as Carney seeks to diversify Canada’s trading partners, setting a target to double Canada’s non-U.S. exports over the next decade.

The government is justifying the move by saying the current pipeline infrastructure is mainly geared towards the U.S. and represents a ‘structural vulnerability’ considering that country is increasing its own crude imports from Venezuela.

Ottawa is also confident there is a strong business case for the pipeline, pointing to Trans Mountain currently running at capacity. It plans on holding a bidding process before making a final investment decision, as a way to mitigate the risk associated with the uncertainty of future demand.

The decision is a major win for Alberta Premier Danielle Smith and could bolster the federalist cause in the province’s upcoming referendum. One of the questions in Oct. 19 vote asks residents if they want a separate referendum on independence.

Carney’s decision will likely further inflame tensions with environmentalists, who have cried foul with his reversal of key planks of the past decade of federal climate policy, including axing the oil and gas emissions cap.

When the project was first proposed in 2025, Ottawa said it would only approve it if there was a private sector backer and buy-in from Indigenous communities. Initial pushback centred on a proposed northern route that would put the pipeline in direct conflict with the feds’ decade-old oil tanker ban. Ultimately, Alberta ruled out that option and announced the pipeline would twin the existing Trans Mountain route that terminates in B.C.’s Lower Mainland.

Canada and Alberta each have a 45 per cent stake in the proposed pipeline, with private-sector pipeline giant Pembina having the remaining 10 per cent.  On Thursday, the federal government said Indigenous communities will be offered a minimum 10 per cent interest.

Government officials estimated the cost for the initial studies and consultations to be at $4 billion. Those are to shouldered by the federal and provincial governments, meaning taxpayers are on the hook if the project eventually hits a snag, either via a lack of enthusiasm from the oil patch or a court challenge.

The government says the pipeline — scheduled to come online in 2032-33 — is projected to export an additional 1 million barrels a day, create 140,000 jobs and generate $20 billion in GDP per year and $100 billion in government revenue by 2060.

Bill C-5 was passed in June 2025, roughly a month after Carney lead the Liberals to victory in that year’s federal election, largely on his promise to steer Canada through the economic turbulence caused by U.S. President Donald Trump’s tariffs.

The bill allows the government to select projects deemed to be in the national importance for a fast-track approval process, handled by the Major Projects Office, headed by former oil and gas executive Dawn Farrell.

Other projects that are currently in line for a designation include the Northwest Territories’ Mackenzie Valley Highway, the Roberts Bank Terminal 2 in Vancouver and a deep nuclear waste repository in Northern Ontario.

More to come…