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Pipeline systems are long-lived, capital-intensive infrastructure. Substantial investments are required to build, maintain, and adapt these systems for the evolving needs of energy markets.
The commodity-specific sections of this publication illustrate that energy markets are affected by a myriad of factors, at times leading to volatility in commodity prices and both short- and long-term changes in the way energy commodities are supplied, transported, and consumed. Changes in energy markets can impact the way that pipelines are used, with some pipelines facing increased demand for service and others facing decreased demand, as circumstances change. Because pipelines are designed to operate over many decades, pipeline companies must make long-term investment decisions despite uncertainty in future energy supply, demand, and market conditions.
Pipeline companies are allowed to charge tolls that can be structured in a wide variety of ways, and in general provide the opportunity to recover capital and operating costs, service debt, and pay a return to investors. This return on investment enables pipeline companies to attract capital to maintain their pipelines and build new infrastructure to meet the market’s evolving needs. Returns on pipeline assets are subject to oversight under the CER’s tolls regulation. In addition, pipeline returns are often supported by long-term contracts,Footnote 1 which provide long-term revenue streams and reduce pipeline volume risk associated with changes in energy markets.
Trends in pipeline financial information of CER-regulated pipeline companies can provide insight into changes in pipeline operations, evolving energy markets, and the ability of pipeline companies to continue attracting capital. Financial information can also help indicate the financial condition of pipeline systems, including their ability to maintain existing infrastructure, fund future investments, and continue providing transportation services safely and reliably under changing market conditions. The following sections review and discuss the financial information of the pipeline transportation system.
A common equity ratio is the per cent of common equity in a company's capital structure.Footnote 2 This ratio is related to a company's financial risk, which is associated with a company's debt level. Holding all other things constant, a higher common equity ratio decreases financial risk by increasing the likelihood of a company being able to meet its financial obligations, including paying down its debt.
Historically, Group 1 company tolls under cost-of-service regulation generally included a deemed common equity ratio and a corresponding allowed rate of return on equity, which is discussed further below. A deemed common equity ratio is a notional capital structure used for rate-making purposes that may differ from a company's or parent company’s actual capital structure. The parent companies of CER-regulated companies often have a variety of businesses consolidated into one capital structure, including non-regulated businesses. The deemed common equity ratio only applies for the assets the CER regulates.
More commonly in recent decades, tolls are set pursuant to negotiated toll settlements. These settlements may or may not expressly identify a capital structure and allowed return on equity. In these cases, the Commission approves the overall settlement as a package.
Where available, the deemed common equity ratios for CER Group 1 pipeline companies from 2016 to 2025 are shown below in Figure 1, ranging from 40% to 50%. These ratios have remained consistent. Most pipeline systems have deemed common equity ratios of 40%, while Trans Mountain System and Enbridge Norman Wells Pipeline have slightly higher ratios at 45% and 50%, respectively. Some of these deemed common equity ratios are explicitly spelled out in approved negotiated toll settlements, whereas others (where no equity ratio was specified when tolls were approved) are as reported by the pipeline company in reporting their financial results to the CER.
None of the deemed common equity ratios for Group 1 companies for the years from 2016 to 2025 were set by the NEB or Commission in a disputed context. The last time the NEB or Commission established a Group 1 company’s deemed capital structure and rate of return on equity outside of a toll settlement was in 2013.Footnote 3
Figure 1: Deemed equity ratio for Group 1 companiesFootnote 4
Source: CER Regulatory Filings – REGDOCS
Text Alternative: This chart displays the deemed equity ratio from 2016 to 2025 for each Group 1 CER-regulated company, where the information exists. The deemed equity ratios for major pipeline companies range from 40% to 50%, with most pipelines at 40%.
As described above, for CER-regulated pipeline companies, an allowed rate of return on equity is sometimes established through either a regulatory process or as part of a negotiated settlement between a pipeline company, its shippers and other parties with a commercial interest in the tolls. As noted above, the last time the NEB or Commission established a Group 1 company’s allowed rate of return on equity outside of a toll settlement was in 2013.
Actual returns on equity earned by pipeline companies may vary for numerous reasons, such as changes in throughput or costs, incentives, or profit-sharing. Actual returns on equity are filed with the CER for most Group 1 companies and are shown in Figure 2. These returns typically range between 5% and 17%.
Figure 2 illustrates that Alliance Pipeline Ltd. (Alliance) has regularly earned materially higher returns on equity for the Alliance Pipeline than the other pipelines shown, ranging from 26.2% in 2016 to 68.3% in 2025 based on a 40% deemed equity ratio. In 2024, the Commission commenced a regulatory process to assess whether Alliance’s tolls remained just and reasonable. Alliance later reached a negotiated settlement with its shippers and interested parties that set out a new toll methodology. The Commission approved the settlement in September 2025, with new tolls taking effect in November 2025.Footnote 5
Another standout in Figure 2 is Trans-Northern Pipelines Inc. (TNPI), which had notably fluctuating returns on equity, with respect to the TNPI Pipeline. Returns on equity were negativeFootnote 6 in some years – down as low as negative 23.1% – and reached as high as 32.6%.
Figure 2: Return on equity for Group 1 companies
Source: CER Regulatory Filings – REGDOCS
Text Alternative: This chart displays the return on equity from 2016 to 2025 for each Group 1 CER-regulated company, where the information exists. Actual returns on equity are shown, with most pipelines having returns on equity within the range of 5% and 17%. Refer to the “Return on equity” section above for a discussion of outliers outside of this range.
Rate base is, in general, the amount of capital investedFootnote 7 in the pipeline minus the accumulated depreciation. This is the amount on which CER-regulated pipeline companies are authorized to earn a return, if they are charging tolls based on cost-of-service. The rate base is impacted by projects such as expansions or new pipelines.Footnote 8 Some pipeline companies do not report rate base and instead report net plant in service, which is similar and represents the original cost of fixed assets less associated accumulated depreciation.
Figure 3 shows the rate base or net plant in service for Group 1 pipeline companies. In general, between 2021 and 2023, the total rate base/net plant in service for Group 1 pipeline companies grew between 3% and 7% year-over-year.Footnote 9 In 2024, the total rate base increased by 80% compared to the previous year, primarily due to the Trans Mountain Expansion Project (TMEP) coming online, as discussed further below. In 2025, the total rate base was $78.0 billion, a modest decrease of 1.8% from 2024.
For liquids pipelines, the largest rate base change since 2021 was seen on the Trans Mountain System, which increased from $1 billion in 2023 to $34 billion in 2025 due to TMEP coming online. The Enbridge Canadian Mainline’s net plant in service and the Keystone Pipeline’s rate base have been declining steadily in recent years. Since 2021, they have experienced decreases of 6% and 9%, respectively. Earlier, the Enbridge Canadian Mainline’s net plant in service grew 54% in 2019, when the Line 3 Replacement Program entered service.
For gas pipelines, the largest absolute dollar change to rate base since 2021 has been on the NGTL System, which increased by over $5 billion (or 37%) due to recent expansions.Footnote 10 The Foothills System increased by $826 million (or 267%) with the Zone 8 West Path Delivery expansion projects.Footnote 11 The Trans Quebec & Maritimes (TQM) Pipeline rate base increased by almost $330 million (or 73%) due in part to the TQM Reinforcement Project and Asset Purchase.Footnote 12 Alliance Pipeline has experienced a steady decline in rate base, dropping 26% from $950 million in 2021 to $702 million in 2025, with overall depreciation of the system and no major projects.
Figure 3: Rate base for Group 1 companies
Source: CER Regulatory Filings – REGDOCS
Text Alternative: This chart displays the rate base/net plant in service from 2016 to 2025 for each Group 1 CER-regulated company. The total value of the rate base/net plant in service for each Group 1 company varies significantly, ranging from $94 million to $34 billion in 2025. As of 31 December 2025, the Trans Mountain System has the largest of any CER-regulated pipeline, with the NGTL System second, and Enbridge Canadian Mainline third.
Pipeline companies generate revenue mainly via tolls collected from shippers. Therefore, revenue directly relates to toll levels and the amount of volume that is shipped.
Figure 4 shows annual revenues for the Group 1 pipeline companies. In 2025, the amount of annual revenues for the major pipelines regulated by the CER totaled about $14 billion, an increase of approximately 38% from 2021.
The NGTL System has the largest total annual revenue at $3.8 billion in 2025, and its revenue has been rising. The Enbridge Canadian Mainline has the second largest total annual revenue at $3.0 billion in 2025, but revenue has generally been decreasing since 2020. Revenues on the Trans Mountain System grew from $417 million in 2023 to $2.9 billion in 2025, due to the Trans Mountain Expansion Project coming online in May 2024. Revenues on the TransCanada (TC) Canadian Mainline have been increasing steadily since 2020, reaching $1.8 billion in 2025.
Figure 4: Revenue for Group 1 companies
Source: CER Regulatory Filings – REGDOCS
Text Alternative: This chart displays the revenue from 2016 to 2025 for each Group 1 CER-regulated company. Revenues for pipeline systems vary significantly, ranging from $54 million to $3.8 billion in 2025.
Credit ratings assess the probability that a debt issuer will meet its obligations and indicate the financial integrity of the rated company. The rating is based on a credit rating agency’s view of the company’s capacity to borrow and ability to meet its financial commitments on a timely basis. For pipeline companies, some of the factors that are considered when evaluating credit risk are regulatory factors, competitive environment, energy supply and demand, and regulated versus non-regulated activities. In Canada, pipeline company credit ratingsFootnote 13 are generally determined by three credit rating agencies: DBRS Morningstar, S&P, and Moody's.
Credit ratings for the major pipeline companies can be found in the CER’s Pipeline Profiles.
Many of the Group 1 pipelines, and some Group 2 pipelines, are owned by three publicly traded companies: Enbridge Inc., TC Energy Corporation, and Pembina Pipeline Corporation. Enbridge Inc., for example, owns several pipelines, including the Westcoast Pipeline, the Maritimes & Northeast Pipeline (77.53% ownership), Enbridge Canadian Mainline, Enbridge Norman Wells Pipeline, Express Pipeline, Southern Lights Pipeline, Enbridge Bakken Pipeline, and Enbridge Line 9. TC Energy Corporation owns pipelines such as Foothills Pipeline, the NGTL System, TC Canadian Mainline, and TQM Pipeline (50% ownership). In addition, Pembina Pipeline Corporation owns certain pipelines, including Alliance Pipeline, Cochin Pipeline, Pouce Coupe Pipeline, and Vantage Pipeline.Footnote 14 This is not meant to be an exhaustive list, but rather to illustrate the material ownership of three major pipeline companies.
In June 2021, the transfer of ownership of the Milk River Pipeline System from Plains Midstream Canada ULC to Milk River Pipeline Ltd. was completed.Footnote 15 The Milk River Pipeline System continues to be regulated by the CER as a Group 2 company.
In February 2024, NOVA Gas Transmission Ltd. was granted leave to transfer all of the facilities that comprise the NGTL System to NGTL GP Ltd. (NGTL GP) on behalf of NGTL Limited Partnership (NGTL LP).Footnote 16
In April 2024, Enbridge Inc. completed the sale of its 50% interest in Alliance Pipeline to Pembina Pipeline Corporation.Footnote 17Footnote 18 The Alliance Pipeline is now owned by Alliance Pipeline Ltd., a wholly owned subsidiary of Pembina Pipeline Corporation.
In October 2024, TC Energy Corporation completed the spinoff of its liquids pipelines business, South Bow Corporation.Footnote 19 South Bow Corporation is the parent company of the CER-regulated Group 1 company South Bow GP (Canada) Ltd., which now owns and manages the Keystone Pipeline. TC Energy Corporation continues to own and manage the natural gas assets.
In November 2024, Westcoast Energy Inc. was granted leave by the Commission to transfer its federally regulated BC natural gas transmission system to Westcoast Energy GP ULC (the general partner) on behalf of Westcoast Energy Limited Partnership (the limited partner).Footnote 20
In July 2025, shipments on the TNPI West Line ceased and it was placed into a deactivated state in accordance with regulatory requirements. See the RPP section for more details on this process.
In January 2026, Imperial Oil Ltd. announced that the Norman Wells operations will end in the third quarter of 2026.Footnote 21 In August 2026, the company confirmed that production had fully ended.Footnote 22
In April 2026, Montreal Pipe Line Limited applied for deactivation of its pipeline from Highwater to Montreal East.Footnote 23 The application is currently being considered by the Commission.
In May 2026, Keyera Corp. (Keyera) closed the acquisition of the Canadian natural gas liquids (NGL) business of Plains All American Pipeline L.P. (Plains L.P.) for $5.3 billion.Footnote 24 Specifically, Keyera acquired the shares of Plains Midstream Canada ULC (a subsidiary of Plains L.P.), which owns NGL pipelines regulated by the CER.Footnote 25
Indigenous Communities are increasingly acquiring ownership of large energy infrastructure in Canada. This growing ownership supports Indigenous economic development opportunities and self-determination while creating opportunities for Communities to play a greater role in the stewardship and governance of energy infrastructure within their territories. Ownership can also provide greater access to project and facility-related information and strengthen long-term relationships between Indigenous partners and project operators within their territories.
Publicly available data shows that since 2021, Indigenous Communities have acquired ownership interests in over 5,000 km of existing oil, gas, and natural gas liquids pipelines across Canada.Footnote 26 These assets tend to generate steady, predictable revenue, which makes them relatively low risk and easier to finance. These types of assets are well suited to loans that support Indigenous Peoples and Communities to purchase ownership stakes. Some of these loans are supported by government loan guaranteesFootnote 27 or other federal and provincial programs that reduce financial risk for lenders.
Indigenous ownership is commonly structured through a consortium or a limited partnership. A consortium brings together multiple Indigenous Peoples and Communities to jointly own a project. A limited partnership is used to clearly define how ownership, financial returns, and responsibilities are shared among participating Communities or Nations.
As described above, certain CER-regulated companies have been approved to reorganize their corporate structures as limited partnerships. This approach makes it easier for multiple Indigenous partners to hold ownership interests in a company, particularly when there are multiple minority owners. For example, in July 2025, 38 First Nations, through the Stonlasec8 Indigenous Alliance Limited Partnership, purchased a 12.5% ownership in a portion of the CER-regulated Westcoast Pipeline.Footnote 28 This was supported by a $400 million loan guarantee from the federal Indigenous Loan Guarantee Program.Footnote 29Footnote 30
