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by Yogi Schulz
Prime Minister Carney wants Canada to become an energy superpower. It’s a worthy goal because Canada has rich, undeveloped energy resources. Most Canadians happily endorse his goal because it achieves these benefits:
- Economic growth and prosperity for Canadians.
- Reduce the adverse consequences of American tariffs.
- Additional tax revenue that reduces the mountain of Canadian public debt.
- Improved energy security and reduced cost for Canadians in Eastern Canada.
- Improved energy security for Canada’s international energy customers.
- Alternative energy supply options for NATO allies to replace Russian energy.
- Greenhouse gas (GHG) reductions that occur when Canadian high ESG energy replaces other energy sources.
However, Canada can achieve these benefits only by overcoming multiple self-inflicted impediments, including those described below. Adam Legge, the president of the Business Council of Alberta, says “those who speak against further resource development and export in Canada are, frankly, speaking against the prosperity and well-being of Canadians.” Please lobby your Member of Parliament to eliminate these impediments to help Canada escape its economic doldrums.
Indeterminate regulatory approval processes
The current regulatory environment for approving significant resource development, administered by the Impact Assessment Agency of Canada (IAAC), is complex, expensive, and unpredictable. The concerns with the IAAC approval process include:
- Vagueness of the assessment criteria.
- Overreach into provincial jurisdiction.
- Questionable inclusions of various intervenors that cause lengthy delays.
- An overemphasis on environmental impacts related to climate change.
- Ministerial discretion that can extend process timelines.
- IAAC approval is still subject to further federal government review and approval.
These issues create uncertainty for investors and hinder economic development.
Greg Ebel, the CEO of Enbridge Inc., a major crude oil pipeline operator, recently noted that Enbridge is channelling most of its investment into the United States due to Canadian regulations. Ebel has publicly advocated for changes to Canadian policies, such as simplifying regulations and speeding up reviews of resource development projects, to encourage more investment in Canada.
For Canada to achieve energy superpower status, the regulatory project approval processes must become simpler, cheaper, faster, and more predictable. The federal government’s new One Canadian Economy Act is designed to break through the regulatory bottlenecks. Unfortunately, the act only applies to a few projects deemed to be in the “national interest.”
Federal legislation blocking energy development
Alberta Premier Danielle Smith has reminded all Canadians that the following federal legislation is blocking development required to achieve energy superpower status:
- Bill C-69, also known as the “No New Pipelines Act,” subjects resource development projects to an expensive and indeterminate regulatory approval process.
- Bill C-48, the Oil Tanker Moratorium Act, bans tankers off the BC coast. It doesn’t reduce the slim risk of a tanker accident. Some proponents of the ban forget that the TransMountain crude oil pipeline has operated for over 60 years without a single tanker spill.
- The proposed oil and gas emissions cap. In reality, it’s a production cap.
- The proposed Clean Electricity Regulations (CER). The regulations increase electricity prices significantly by restricting GHG emissions, for a modest environmental benefit.
For Canada to achieve energy superpower status, the federal government must remove these legislative impediments. The federal government has offered no hints that it is considering these removals.
Fantasy climate change actions
Canada’s federal government continues to pursue its aggressive target of achieving net-zero greenhouse gas (GHG) emissions by 2050 to address climate change. This target is likely a fantasy.
Prime Minister Carney has spoken about “decarbonized crude oil” as a worthwhile strategy for the oil and gas sector to significantly reduce its GHG emissions to help meet the net-zero target. The Prime Minister is likely hoping that the producers will contribute financially to the proposed $16.5 billion Pathways Alliance carbon capture project. The federal government believes it has made a generous subsidy offer. However, the producers don’t think they should pay for anything because no other jurisdiction has asked the industry to pay for any part of such a project.
Carbon capture is a fantasy in most cases because it materially increases operating costs, thereby undermining Canada’s competitiveness.
For Canada to achieve energy superpower status, the federal government must scale back its climate change goals to a target that is achievable at an affordable cost. The recent pause in the Electric Vehicle (EV) sales mandate may signal that the federal government has come to realize its ambition is not feasible.
Ambiguity around indigenous consultation
Various Supreme Court of Canada decisions have defined indigenous consultation in considerable detail. Nonetheless, some Indigenous leaders choose to interpret consultation in a way that amounts to Indigenous people holding a veto or requiring their explicit approval over resource development projects where they have standing. The geographic locations of likely Canadian resource development projects, combined with outstanding Indigenous land claims, mean that Indigenous people have standing on virtually all proposed projects.
In summary, the rights of the Indigenous peoples, as part of the resource development process, are defined by the following:
- The IAAC regulatory assessment, which must consider “the rights of the Indigenous peoples of Canada recognized and affirmed by section 35 of the Constitution Act, 1982.”
- The Supreme Court of Canada, which established a constitutional “duty to consult and, where appropriate, accommodate” Indigenous peoples.
- Landmark Supreme Court decisions, which further shaped the details of what “duty to consult” entails.
For Canada to achieve energy superpower status, it must accomplish the following:
- Respect the consultation rights of the Indigenous peoples.
- Challenge the attempts by some Indigenous peoples to extend their rights to a veto over development.
- Settle some Indigenous land claims.
The responses of some Indigenous leaders to the federal government’s new One Canadian Economy Act are not encouraging.
Provincial opposition
The Minister of Energy, Tim Hodgson, recently told the Senate that a pipeline would ‘need the support of the jurisdiction you build through,’ thereby making a complex project approval situation even more fraught.
For Canada to achieve energy superpower status, the federal government must exercise its authority over the approval of interprovincial infrastructure projects and not allow provinces or other stakeholders to usurp that authority.
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