Randall Denley: The Ontario-Alberta oil pipeline proposal isn’t helping

Alberta Premier Danielle Smith speaks at a press conference with Ontario Premier Doug Ford on July 6, 2026. Dean Pilling/Postmedia

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At first glance, Ontario Premier Doug Ford’s new pipeline plan sounds like something good. Rather than relying on routes that pass through the U.S., let’s protect Ontario’s fossil fuel supply by building a pipeline across our own country to supply refineries in Ontario. That would avert the threat of the Americans cutting off Ontario’s supply.

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Dig a little deeper, though, and one quickly discovers that the American threat isn’t much of a threat and the cost of the pipeline that Ford and Alberta Premier Danielle Smith are proposing would vastly exceed any imaginable benefit.

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That’s not the only deficiency in Ford’s Northern Shield Energy Corridor plan, which also proposes shipping Ontario minerals west via the same route. There is no obvious demand for this oil pipeline. Ontario’s oil refineries are not clamouring for a new source of oil and, even if they were, they don’t have the capacity to handle all the proposed flow from Northern Shield.

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Let’s start with the “threat.” Pipelines owned by Canadian company Enbridge supply crude oil, mostly from Alberta, for the handful of Ontario refineries in Sarnia.

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Part of the pipeline crosses U.S. soil and passes under the Straits of Mackinac, a narrow channel that connects Lake Michigan and Lake Huron. In 2020, Michigan Governor Gretchen Whitmer tried to shut down the pipeline over perceived environmental risks. That move was later blocked by a U.S. court, which said pipelines were a matter of federal jurisdiction. The legal dispute is not yet fully resolved, but shutting down the pipeline would be a self-destructive move for Michigan.

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The Americans need Canadian oil and even Michigan is heavily dependent on the Enbridge pipeline, which also supplies most of the state’s propane. The Donald Trump administration has sided with Enbridge. The pipeline is not a factor in the continuing trade dispute with the Americans. Despite Whitmer’s environmental grandstanding, the political risk to the Enbridge pipeline is negligible.

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Enbridge has proposed a $500-million tunnel under the straits to address the governor’s environmental objections.

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The pipeline plan Ford and Smith presented this week doesn’t have a price tag. It’s too early for that, as Ontario is still conducting a feasibility study. So far, the study has cost $11 million and results are expected by the end of the year.

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Nevertheless, one can certainly make a reasonable estimate. For comparison, look at the federal government’s proposed new pipeline to connect Alberta to the Pacific Coast around southern B.C. The projected cost is between $35.2 billion and $43.7 billion for the 1,250-kilometre pipeline. The federal and Alberta governments will cover 90 per cent of the cost.

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The pipeline Ford is championing would be 3,300 kilometres long. Based on the cost of the other pipeline, the Ford pipeline would certainly cost not less than $100 billion, and there is currently no private sector partner offering to back it.

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Ford is apparently quite willing to use Ontario taxpayers’ dollars to pay for his pipeline dream, even though benefits in his own province would be negligible. Ford told reporters this week that “We won’t hesitate to do what the government of Canada and Alberta (are) doing.” In other words, pay almost all the cost.