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Economic Viewpoint

Trans Mountain Expansion: What’s the Impact on the Canadian Economy?

August 21, 2024
Marc-Antoine Dumont, Senior Economist • LJ Valencia, Economic Analyst

The Trans Mountain Expansion pipeline officially started operations on May 1, 2024, and spans 1,150 kilometres from Edmonton in Alberta to Burnaby in British Columbia. At full capacity, it will nearly triple the capacity of the old conduit from 300,000 barrels per day (bpd) to 890,000 bpd.

This should result in higher oil production in Canada over time and a subsequent reduction in the WTI–WCS spread. As 95% of Canada’s crude oil exports go to the United States, this new route to the West Coast will also allow Western Canadian producers to reduce their dependence on US refineries.

However, using this newly available export capacity will likely take years. As such, the uptick in June’s crude oil exports is probably mostly due to an inventory drawdown rather than an increase in production, meaning the strength in recent exports may be unsustainable. As a result, the impact of the new pipeline on real GDP should be moderate in the near term and well below the Bank of Canada’s ambitious growth projections.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.