Why investors still don’t trust Canada’s pipeline promises

Posted on January 15, 2026 by admin

Canadians have seen this movie before. A federal announcement is rolled out with solemn language, carefully staged optimism and the promise of progress, only to dissolve under the weight of reality. The recent memorandum of understanding between Ottawa and Alberta on energy infrastructure fits that pattern all too well.

On paper, the MOU signals cooperation. In practice, it exposes the deeper problem facing the country: a federal government that appears to substitute symbolism for leadership and process for outcomes. That is not leadership. It is choreography.

At its core, the agreement is meant to revive confidence in Canada’s ability to move major energy projects forward, including pipelines and associated infrastructure. Yet nothing in the MOU alters the policies that drove investors away in the first place.

Carbon pricing continues to escalate. Net-zero commitments remain intact. Regulatory uncertainty persists. British Columbia remains openly hostile to new pipelines. And every project must still navigate a highly politicized approval process that has repeatedly failed.

The skepticism voiced by industry veterans is not ideological. It is rooted in experience. Canada has approved major pipeline projects through established regulatory channels only to see them cancelled following political decisions. Northern Gateway was one such example. Keystone XL was another. Investors were told approvals mattered until they did not. That history matters. Capital has a memory.

When private-sector proponents look at the current landscape, they do not see clarity. They see risk layered upon risk. A MOU does not override legislation. It does not bind future governments. It does not neutralize provincial opposition. It does not compensate for policies that make projects uneconomic before a shovel ever hits the ground.

In that sense, the agreement may expose how far Canada has drifted from normal governance. In the past, governments set the rules, regulators assessed projects and industry built them. Today, even discussing a pipeline requires political side deals, new bureaucratic offices and symbolic gestures designed to manage headlines rather than outcomes.

The creation of a National Project Office illustrates the problem. Instead of simplifying the process, it adds another layer, another gatekeeper, on top of an already cumbersome system. However capable the individuals involved, the signal is unmistakable: projects increasingly no longer advance because they meet regulatory standards, but because they survive political negotiation. That shift has consequences.

Canada’s hydrocarbon energy sector remains one of the country’s largest sources of employment, investment and export revenue. Yet it is treated as a political liability rather than a strategic asset. The result has been what many analysts describe as a decade of stagnation, declining competitiveness and a steady outflow of capital to jurisdictions where rules are clearer and commitments are credible.

The contrast with the U.S. is particularly stark. While Ottawa tightens carbon constraints and raises costs on domestic producers, Washington is moving in the opposite direction, easing regulatory burdens in the name of competitiveness and energy security. Canada is asking its industries to run uphill, against policy and geography, while its closest competitor makes it easier to invest and build. That is not environmental stewardship. It is economic self-sabotage.

Leadership requires making choices and owning their consequences. If the federal government believes its net-zero targets justify constraining oil and gas development, it should say so plainly and accept the economic trade-offs. If it believes hydrocarbon energy exports are essential to national prosperity, then policy must align with that objective. What does not work is attempting to hold both positions simultaneously while expecting the private sector to absorb the contradictions.

Ultimately, Canadians will judge this agreement not by its language but by its results. Will a new pipeline be built? Will private capital return? Will timelines shorten rather than stretch into decades? Or will this MOU join a growing list of announcements that promised momentum but delivered delay?

Leadership is not about managing impressions. It is about setting a direction and creating the conditions for others to act. Until Ottawa resolves the conflict between its climate rhetoric and its economic responsibilities, no amount of symbolism will restore trust or growth.

Canada does not lack resources. It lacks national leadership. And no memorandum of understanding can substitute for that.

David Leis is President and CEO of the Frontier Centre for Public Policy and host of the Leaders on the Frontier podcast.

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