Canada's energy sector must plan ahead to avoid the cost overruns that marked the last oil sands boom, analysts at Royal Bank of Canada said, according to a report by The Globe and Mail.

The warning lands as the industry weighs a new round of spending decisions, with RBC arguing that the discipline — or lack of it — in project planning today will determine whether the sector repeats the budget blowouts that plagued the previous oil sands build-out.

Why is RBC raising the alarm now?

The last oil sands boom left a long memory. Mega-projects in Alberta ran massively over budget as operators raced to add capacity, labour tightened, and engineering schedules slipped. RBC's message, as relayed by The Globe and Mail, is direct: the industry has a window to plan capacity, contracting, and sequencing before spending accelerates, and it should use it.

The bank's research desk frames proactive planning as the difference between capturing the current cycle and repeating the previous one. Companies that lock in scope, labour strategy, and supplier terms early stand a better chance of holding capital budgets than those that sanction work into a heated market, the analysts indicated.

What does the last boom's legacy mean for new projects?

Cost inflation is the watch item. When oil sands operators last expanded in force, competing projects bid up the same pool of skilled labour, fabrication capacity, and module construction — and capital estimates moved with them. RBC's caution implies the sector should stage spending and phase decisions rather than sanction a cluster of projects simultaneously.

For operators in the Athabasca, Peace River, and Cold Lake regions, the lesson is sequencing. For service companies and EPC contractors, it signals that early engagement on long-lead equipment and labour agreements could carry premium value if the spending cycle builds.

The analysis is commentary, not a forecast of a specific overrun. It attributes the risk to planning behaviour — what companies do before final investment decisions — rather than to any single project or operator currently on the boards.

Who is saying it, and on what basis?

RBC — Canada's largest bank and a major lender to the country's energy sector — issued the guidance through its research arm, as reported by The Globe and Mail on the paper's energy desk. The bank's analysts cover Canadian oil and gas producers and regularly publish capital-spending and cost assessments for the sector.

Because RBC finances energy projects, its cost-discipline warnings carry weight with both producers weighing expansions and the contractors who would build them. The Globe and Mail report surfaced the recommendations amid renewed discussion of Canadian heavy oil capacity, egress, and the pace of upstream investment.

What should readers watch next?

The watch items are capital budgets and FID timing. If Canadian operators roll out 2025–26 spending plans with phased sanctioning and early procurement lock-ins, they will have heeded the RBC guidance. If several large projects move to sanction on overlapping schedules, expect the cost-inflation dynamics of the last boom — labour competition, scope creep, and revised capital estimates — to reappear in guidance updates.

RBC's bottom line, per the report: the sector knows what the last oil sands boom cost it. The variable now is whether it plans accordingly.