Markets 
U.S. President Donald Trump says he is looking to revive the the Keystone XL pipeline expansion project as part of trade talks with Canada, and after agreeing to pause new tariffs of up to 50 per cent on some Canadian goods for three days while officials try to reach a deal.
Trump made the announcement in a post on his social media platform, Truth Social.
This also comes after Trump in April signed an order granting a cross-border permit to a project that would revive parts of the Keystone XL pipeline.
The Keystone XL pipeline project has gone through years of off and on updates based on changing U.S. administrations. Several experts say the Keystone expansion is still economically viable, but faces many challenges.
“Trump’s post merely says the two countries have a deal while intimating that the Keystone XL pipeline is back on,” said Derek Holt, vice president and economist Scotiabank in a statement.
“We’ll see about that, given a guarded industry toward the pipeline that has moved on given the wild unpredictability of successive U.S. administrations, the long project timelines and the varied competing interests.”
The Canadian section of the Keystone XL pipeline is mostly already completed, with the U.S. connection still outstanding, but businesses and governments have mostly pivoted focus to other pipeline projects.
Specifically, Trans Mountain is working with Ottawa, along with the Alberta and B.C. governments to build a new oil pipeline to the West Coast to reach international markets, which is being fast tracked through the federal government’s Major Projects Office.
“Whatever Keystone XL might be coming out of the ground from President Trump may be nothing more than what’s already in place. It’s really hard to understand what he’s doing other than trying to take credit for something,” says Richard Masson, former CEO of the Alberta Petroleum Marketing Commission.
“I think it’s very much political, but the other thing is Canada put on the table the idea that we’re going to build a million barrel a day West Coast pipeline, and that would divert a lot of production away from the U.S.”
Prime Minister Mark Carney says Canada and the United States are “moving towards an agreement” that preserves “the Canadian advantage,” shortly after U.S. President Donald Trump said they had a “very fair” trade deal.
“We are now moving towards an agreement that reinforces that Canadian advantage, including by securing the best terms in each of Canada’s most important strategic sectors and providing greater certainty about our future trading relationship,” Carney posted on social media on Wednesday.
The Keystone XL pipeline proposal dates back to 2008, when a joint partnership between TransCanada and ConocoPhillips sought to expand the pipeline framework to allow for a quicker route to bring crude oil from Alberta to refineries on the U.S. Gulf Coast.
Get breaking National news
Get breaking Canada news delivered to your inbox as it happens so you won’t miss a trending story.
The proposal went through several years of environmental reviews and faced growing opposition and legal hurdles, including from U.S. politicians, environmental groups, land owners and Indigenous communities that wound up delaying the project.
In 2015, then-U.S. president Barack Obama rejected Keystone XL, and effectively ended the project under his presidency without formally revoking the permit.
Trump, in his first term, revived the project in January 2017 by signing an executive order, and then granted a presidential permit in March 2019.
The Alberta provincial government then committed $1.5 billion to fund the project in March 2020 and construction of the Canadian leg of the pipeline began later that year.
In January 2021, former president Joe Biden revoked Keystone XL’s presidential permit, which halted U.S. construction.
The Canadian leg of the Keystone XL pipeline has been almost entirely completed to this day, with the U.S. portion still mostly incomplete.
TC Energy has since spun off its Keystone XL pipeline ownership into a new company known as South Bow Corp., which manages the current infrastructure and future proposals.
South Bow is a private-sector company, meaning Carney may not be able to single-handedly revive Keystone XL in partnership with the U.S. and Trump.
Global News sent a request to South Bow for a comment regarding the potential revival of the Keystone XL project, but did not receive a response by publication.
Carney reportedly proposed the idea of reviving Keystone to Trump when they met in October 2025.
A spokesperson for South Bow told The Canadian Press at the time that the company was not privy to those discussions between Canada and the U.S. but it “is supportive of efforts to find solutions that increase the transportation of Canadian crude oil.”
“We will continue to explore opportunities that leverage our existing corridor with our customers and others in the industry,” Solomiya Lyaskovska wrote in a media statement in October 2025.
An oil pipeline from Alberta’s oilsands to the U.S. Gulf Coast could potentially send Canadian oil to the U.S. and international markets faster than a future West Coast pipeline, but it could also undermine the federal government’s strategy to diversify away from the U.S. as a main trading partner — including for oil.
“It would be a priority, which is why it was proposed twice before and had commercial support twice before, each time being killed by the U.S. So yeah, there’s a lot of evidence that says, relatively speaking, sending oil to the U.S. is the best economic choice. The problem has been, can you count on the U.S. to be a reliable customer?”
Economics professor with Concordia University, Moshe Lander, says Keystone XL could potentially be a cost effective bargaining piece for Canada in these negotiations.
“It should be fairly easy from the Canadian side because there’s not a lot that Canada needs to do to bring it on board. It’s a minimal investment at this point,” says economics professor Moshe Lander of Concordia University.
“If the Americans want to make this a reality, I don’t think that Alberta is going to say, ‘I don’t think it’s a good idea’ — they’d be willing participants in it. So I think it is fairly easy that if you can get concessions out of Trump on other areas, then fine, let’s have a Keystone pipeline.”
But Lander says he’s cautious about the details of this potential deal and if Canada would be giving up something else as a result, especially because the U.S. would have more work to do and more money to pay to finish the remaining portion of the pipeline.
“The danger that I would see is, does Trump then ask Canada to pay for it? We’ve seen that type of philosophy before,” he says.
“Would Canada be willing to stump up, effectively, American investment to try and make sure that they can get their way on other aspects of the trade deal? And you could certainly see Trump trying to use that as leverage, if not to get Canada to pay for all of it, certainly a portion of it.”
The long term financial viability of any pipeline is also difficult to guarantee for any business or government because long-term demand for oil is expected to fall, and past proposals, including Keystone XL, have faced costly delays in the past.
“There’s a lot of uncertainty, a lot risk, and of course, the longer term demand for oil is also not especially rosy,” says Amy Janzwood, assistant professor of political science at McGill University.
Janzwood also said she is skeptical that many companies have an appetite to invest a significant amount of capital given the uncertain outlooks for oil demand, as well as potential legal risks and lengthy permitting processes, and that companies like Trans Mountain are prioritizing expanding oil output using current infrastructure.
“So there’s, I think, big questions, both in the short term and the long term, about the demand for oil and whether or not producers are going to be willing to expand production to fill a new pipeline.”
– with files from Global News’ Uday Rana and the Canadian Press
Read the full article here
