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By Julio Mejía and Tegan Hill
In his recent speech in Davos, Prime Minister Mark Carney said the world is “in the midst of a rupture.” And while that’s true, the Carney government should focus on what it can control—Canada’s regulatory regime remains onerous, costly and uncertain, deterring investors and undermining the country’s ability to adapt and compete.
Over the past decade, Ottawa has established a policy regime that deters investment in the energy and mining sectors. The impact has been so severe that investment in Canadian mining, oil and gas has plummeted, from $102 billion in 2014 to $53 billion in 2024—a 48 per cent drop (after adjusting for inflation). Consequently, there are fewer resources to build projects, create jobs, expand infrastructure and strengthen Canada’s largest export sector.
Again, Carney is right about the rupture, and in the coming years, these industries may face increased competition as major new players enter the race for investment and global market share.
While it’s impossible to predict the outcome of the latest war in the Middle East, the prospect of political change in Iran could lead to the return of unsanctioned Iranian oil to global markets. The U.S. removal of Venezuela’s socialist dictator Nicolás Maduro was immediately followed by Washington-led meetings with oil executives targeting US$100 billion in private investment to develop the world’s largest proven oil reserves. And President Trump’s pressure on Denmark to cede Greenland to the United States may lead to a deal to exploit Greenland’s oil, gas and critical minerals used to produce semiconductors, military radar, drones and other advanced technologies.
How is the Carney government responding? By clinging to Trudeau-era policies.
For example, Bill C-48 (enacted by the Trudeau government in 2019), bans large oil tankers from ports on British Columbia’s northwest coast, thus weakening the financial case for an oil pipeline from Alberta to the B.C. coast. Crucially, his legislation does not (and cannot) restrict international oil tankers travelling along B.C.’s coast, so it only hurts Canada’s competitiveness. And according to the recent agreement between Ottawa and Alberta, which includes a potential pipeline, any exemption to the ban is conditional on proponents securing private investment for the project. But as long as Bill C-48 remains in place, it deters investors from funding a project lacking guaranteed port access.
Bill C-69, also enacted in 2019, is another case in point. It requires mining, energy and infrastructure project proponents to address subjective criteria, such as any project’s effects on the “intersection of sex and gender with other identity factors.” This highly subjective criteria will, at the very least, likely increase already lengthy approval timelines. According to the Montreal Economic Institute, only one project completed the entire assessment process in Bill C-69’s first five years (and it took three-and-a-half years to do so). For context, in the first five years of the previous assessment system, the government approved 17 projects.
And as if all of that isn’t enough, instead of scrapping these crippling regulations from the Trudeau era, the Carney government has enacted Bill C-5, which grants the federal cabinet (and the prime minister, in practical terms) broad discretion to identify “national interest” projects and fast-track them outside Ottawa’s regulatory framework. The result is an opaque process where firms must persuade a small group of politicians that their proposals align with the expectations of the politicians. That’s not only a recipe for corruption but a deterrent to any investor unable (or unwilling) to curry favour with the prime minister and his cabinet.
Finally, the Carney government is also maintaining other burdensome policies (e.g. methane emissions reduction requirements), which impose massive financial costs on the energy industry. And last December, the Carney government launched a public consultation with an eye on raising the industrial carbon tax, which will hit carbon-intensive industries such as oil and gas especially hard.
The global race for investment and market share in mining, oil and gas seems poised to get more competitive. If Canada wants to capitalize on its natural resource advantages, Ottawa must adopt reasonable, predictable and competitive policies that attract investment rather than drive it away.
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