Pipeline delays impose ‘demonstrable’ cost to Canada’s economy: Scotibank
CALGARY — Delayed oil pipeline construction is causing a steep discount for Canadian crude prices that is costing the economy roughly $15.6 billion a year, according to Scotiabank.
“Pipeline approval delays have imposed clear, demonstrable and substantial economic costs on the Canadian economy,” said bank chief economist Jean-Francois Perrault in a report Tuesday.
The discount, however, is expected to ease through the year as more rail capacity becomes available to ship oil, bringing the expected cost to roughly $10.7 billion or 0.5 per cent of GDP for 2018 and then to $7 billion or 0.3 per cent of GDP a year until more pipeline capacity comes online.
The costs of the discount are increasing as delays continue for all three major proposed oil pipelines to export more oil from Western Canada, including Kinder Morgan’s Trans Mountain expansion, Enbridge’s Line 3 replacement, and TransCanada’s Keystone XL.