Canada linked energy cooperation to tariff relief as Prime Minister Mark Carney reportedly told President Donald Trump he wants to revive the Keystone XL pipeline, with Trump “receptive” and the proposal explicitly tied to easing 50% US duties on Canadian steel and aluminum.
Following the Oval Office meeting, Trade Minister Dominic LeBlanc said both leaders instructed their teams to “quickly land deals on priority files,” steel, aluminum, and energy.
The revived discussion centers on Keystone XL’s original cross-border route from Alberta to the US Midwest. It was a project proposed in 2008, then the State Department under former President Barack Obama denied the presidential permit in 2015 on “national interest” grounds. President Donald Trump then invited a re-application in during his first term and personally issued a new cross-border presidential permit in 2019.
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During former President Joe Biden’s time, the administration revoked that 2019 permit via executive order, citing climate priorities and the same “national interest” reasons, until TC Energy terminated the project in June 2021.
The pipeline’s capacity was then cited at up to 830,000 barrels per day.
TC Energy spun off its liquids business in 2024 as South Bow, which now operates the existing Keystone system and has told media it has “moved on” from the XL expansion. Any reboot would therefore require a new proponent or a policy-driven re-engagement by South Bow.
Alberta remains financially and politically exposed to the file after committing $1.5 billion in equity in 2020 and a $6 billion loan guarantee in 2021 to advance Keystone XL before the US permit was revoked.
That provincial push now includes a separate Alberta-backed proposal to the BC coast. Premier David Eby has dismissed it as a “fictional” project that would cost taxpayers billions, highlighting interprovincial resistance that contrasts with Keystone’s US-focused corridor.
Alberta Premier Danielle Smith is pressing the pedal, warning that if a west-coast line is blocked she will “work with American counterparts… and restart the Keystone XL.”
“And if it doesn’t work, then I guess I’ll have to work with the United States, but then, it is a failure in my opinion. That is a failure of the exercise. The whole reason why we’ve had this recalibration in Canada in the last eight months is because people are nervous that we are too reliant on the United States,” she said in an interview.
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