MONTREAL — A new report raises significant concerns about the feasibility of reviving a liquefied natural gas (LNG) export project in Quebec’s Saguenay region. The report, released by the advocacy group Investors for Paris Compliance, suggests that the project would be costly and likely unprofitable. This comes as economic pressures from the U.S. reignite interest in new pipeline developments across Canada.

Demand for LNG in Europe has dropped by 18 percent between 2022 and 2024, and Canadian exports may struggle to compete in Asian markets. Renaud Gignac, an economist and senior adviser for the group, stated, "Investing in infrastructure that will be very expensive and likely won’t be profitable will weaken our economy rather than strengthen it."

The report highlights that LNG production is projected to grow by 40 percent from 2024 to 2028, primarily driven by projects in the United States and Qatar. However, Gignac warns that demand is not expected to keep pace with this growth. He noted, "This is significant. What this means is that the profitability of any new project is compromised because we risk seeing downward pressure on prices."

A previous project aimed at transporting natural gas from Western Canada to an export terminal in Saguenay was canceled in 2021 due to environmental concerns and public opposition. Despite this, Quebec Premier François Legault has recently indicated a willingness to consider pipeline development, emphasizing the need to reduce the province's reliance on energy exports to the U.S.

The advocacy group also pointed out that inflation could inflate the project’s cost to over $33 billion, with public funding likely necessary. Gignac remarked, "These are considerable investments that mobilize public capital and labour as well. When you direct resources to this type of project, you make choices, and we believe there are options that could be more profitable in the long term, for both public and private investors."

The report comes amid ongoing discussions about the implications of U.S. President Donald Trump’s threats to impose tariffs on Canadian exports. This has sparked a public debate regarding the viability of a trans-Canadian pipeline for shipping oil or gas overseas. Both Prime Minister Mark Carney and Premier Legault have weighed in on the need to reassess pipeline projects.

Gignac noted, "As initial panic subsides following the Trump administration’s tariff threats, a calmer analysis of the East Coast LNG projects shows that they carry significant risks for potential investors and taxpayers."

While the report does not specifically address the potential revival of the Energy East pipeline project, which was abandoned by TransCanada in 2017, Gignac believes the findings would be similar. He stated, "There is an imminent forecast of peak demand."

Gignac views the revival of pipeline projects as "a false solution" for enhancing the resilience of the Canadian economy. Instead, the group advocates for alternative strategies to stimulate economic growth, such as integrating provincial electricity grids and mining critical minerals essential for the electrification of transportation.

However, the group's support for mining has drawn criticism from some environmentalists. Gignac acknowledged, "Mining is certainly not without environmental impact. So we will also have to look at the most responsible ways to extract these minerals and bring them to market."

Additionally, the report identifies the federal government’s plans to construct a high-speed train linking Quebec City, Montreal, and Toronto as a promising initiative.