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Canada needs economic growth. A new government should unleash our natural resources sector after a decade of tying it up in green tape
When Pierre Poilievre becomes prime minister, as still seems all but certain even after Justin Trudeau’s exit, he will face acute economic problems: out-of-control spending, massive deficits, ballooning debt and crushing interest obligations, as well as insipid productivity and lagging growth in real GDP per capita. He will need — we will need — faster income growth but without raising taxes. Accelerating the development of Canada’s abundant natural resources is the obvious path, though that means taking on climate alarmists, green lobbyists feeding at the public trough and assorted other rent-seekers. It is a safe bet no Liberal leadership candidate will do that, especially Mark Carney, an official UN climate doomsayer.
One tactical question facing every new government, even one with a massive mandate for change, is: what tough issues should it spend time and political capital on early. One stands out: dismantling Trudeau’s sacrosanct net-zero infrastructure quickly, since it is a precondition to achieving the crucial growth objective.
Poilievre ran for Conservative leader on a plan to develop Canada’s vast energy and mineral wealth so as to bolster the economy, create jobs, attract capital, address western alienation and assist our allies. Recently, he proposed speeding up approvals to build oil refineries, LNG plants, nuclear facilities and hydro power as a win-win negotiating strategy with incoming President Trump.
For a long time, the best Conservatives could hope to do was to neutralize climate change as a political issue, since they would never match Liberal willingness to hurt people to save humanity. For two reasons, that calculus has now changed: the collapse of Liberal credibility generally and the retreat from “net zero” in Canada and across the western world. The widespread retreat follows public rebellion against green policies that undermine affordability, personal agency, employment and corporate competitiveness.
Canadians are now inured to Chicken Little warnings about imminent civilizational collapse. They realize Canada is too small to impact the climate, while the biggest emitters are not doing their part, which is why global GHG emissions hit a record high last year and fossil fuels still represent over 80 per cent of energy consumed. With energy prices soaring, electricity increasingly unreliable and de-industrialization debilitating its economies, Europe is backtracking on its commitments to renewable power, EV mandates and net zero. As for the United States, a complete reversal is coming Jan. 20. Donald Trump, who calls climate change a hoax, will push “drill, baby, drill” to boost prosperity and energy independence.
A new Conservative government will have just as many bad policies to reverse. In 2012, as minister of natural resources, I introduced a streamlined regulatory process of “one project, one review.” When the Liberals assumed power in 2015, they gutted that legislation and introduced a “no pipelines” act deliberately designed to render resource projects uneconomic by increasing the cost, delay and risk of environmental review.
Liberal slow-walking of energy projects kept us from helping our European allies cope with the loss of Russian natural gas after Vladimir Putin’s invasion of Ukraine. It also, perversely, prevented Asia and Europe from substituting Canadian natural gas for much higher-emitting fuels, including coal and wood pellets, thus undermining Trudeau’s over-arching climate goal of reducing GHG emissions. The government basically stuck to its “green tape” strategy even after the Supreme Court judged parts of the assessment act unconstitutional.
Steven Guilbeault, minister of environment and climate change, pushed ahead with an unrealistic EV mandate, an ineffective ban on single-use plastics, and “clean electricity” regulations that will make electricity less reliable and affordable. There is also the oil tanker moratorium, the moratorium on offshore Arctic oil and gas licensing, industrial carbon pricing, and the rejection of the Northern Gateway pipeline. With any luck, Guilbeault’s final radical initiative, a punitive cap on oil and gas pollution, will not make it through Parliament. Though their cumulative impact is devastating to the economy, these initiatives do not reduce global warming in any meaningful amount. Guilbeault nevertheless made clear in a year-end interview with the National Observer that “the team and I … are determined to get as many things as we can out the door before the next election.”
Mainly because the government never mentions them, most Canadians are unaware of the immense harm caused by these policies. But the decline in investment in Canada’s resource sector has been “precipitous,” according to Heather Exner-Pirot of the Macdonald-Laurier Institute.
The number of natural resource projects completed between 2015 and 2023 fell by 36.4 per cent; in value, electricity projects were down 49 per cent and mining, 55 per cent. The result is a staggering $600 billion in lost capital investments — not to mention attendant jobs, incomes, profits and tax revenues. The country simply cannot afford costs that high. The new Conservative government will need to repeal every one of the harmful and dysfunctional policies.
Liberal mis-rule is nearing an end. Soon Canadians will once again be able to benefit from our enormous natural wealth, while their country can rejoin the community of nations as a strong, prosperous and responsible ally.
Joe Oliver was minister of natural resources and minister of finance in the Harper government.
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Originally Published in the Financial Post Here