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‘Canada isn’t losing investment; we’re regulating it away’
By This Story and More by Meghan Potkins Here
Ottawa’s new system for fast-tracking select major projects creates a two-tier path for approvals that still leaves Canada at a competitive disadvantage for investment, according to a new report released by the Business Council of Alberta.
The report, released Monday, argues that the Carney government’s move to expedite certain nation-building projects through a Major Projects Office was a necessary step — but one that fails to solve the regulatory challenges facing others.
“Canada isn’t losing investment; we’re regulating it away,” said Adam Legge, president of the business council, who called the federal regulatory and project approval system “the single-biggest barrier” to investment in Canada.
“We’ve now seen that no one is willing to invest in Canada because no CEO will stand in front of their board and say, ‘I don’t know if this project will be approved — even if regulators say yes — because politicians may come in and say no later.’
“No one will risk that capital or time and money.”
The report noted that business investment per worker in Canada has fallen by almost 11 per cent in the last decade, while in the United States it has grown by about 45 per cent over the same period.
It points the finger squarely at federal regulatory requirements which the authors say increased by 37 per cent between 2006 and 2021.
The business council is urging a major overhaul of project reviews and approvals under Canada’s Impact Assessment Act and the Canadian Energy Regulator Act.
The report recommends a suite of changes aimed at making federal approvals faster, more predictable and less duplicative. Key among the proposals is a “one project, one review, one decision” system to ensure projects primarily regulated by provinces are reviewed provincially, not by the federal government. It also calls for firm timelines, including two years or less to complete reviews.
There are several recommendations desired by the energy industry, including that all federal pipeline project reviews be led by the Canada Energy Regulator, rather than the Impact Assessment Agency.
It also called on Ottawa to act quickly to repeal the ban on big oil tankers along the northern coast of British Columbia.
Currently, particularly for pipeline projects, proponents can go through a multi-year process, investing hundreds of millions of dollars before they understand if their project will have government support, said Alex Pourbaix, board chair for Cenovus Energy Inc. and incoming chair for the business council.
“We have a system that is inherently political, because at the very end of the day, it’s not an independent regulator that is putting thumbs up or thumbs down. It is the federal Cabinet,” he said.
Pourbaix said the energy sector isn’t asking to be “let off the hook” when it comes to protecting the environment or working with Indigenous communities, but instead is looking for predictable timelines with the “least possible late-stage political interference.”
Under current federal rules, the federal environment minister or Cabinet make a final determination at the end of the full impact assessment process, sometimes after years of study and review.
The report argues the political decision should come much earlier, through a two-stage process that would require politicians to make an initial, conditional call on whether a project is in the public interest. Final approval — including conditions and mitigation requirements — would then rest with the regulator responsible for the project.
Moving that decision upfront would help reduce uncertainty for investors, Pourbaix said.
Pourbaix previously was an executive at TC Energy (formerly TransCanada Corp.) when that company was trying to advance the former Keystone XL and Energy East pipeline projects. TC took a roughly $1-billion loss in 2017 after cancelling Energy East amid regulatory delays and shifting market conditions.
“If the answer was no, it sure would have been nice to know that three months in instead of four years in,” he said.
The Business Council of Alberta, which is composed of CEOs and founders from the province’s major firms and industries, said it hopes to see Ottawa seize the current moment to improve Canada’s competitiveness.
However, many of the recommendations outlined in its report are likely to be opposed by environmental groups and some Indigenous communities who have complained that faster approvals could mean weaker environmental oversight.
Industry and business leaders gathered in Calgary on Monday for the report’s release praised the Carney government’s efforts to fast-track key projects, but said the measures don’t go far enough to address Canada’s investment challenges.
Legge said Ottawa does not need to repeal Bill C-69, the Impact Assessment Act, to make meaningful changes — but it also cannot simply “tinker” at the margins.
“They’re still looking at it from a political palatability standpoint, not an investment capability standpoint,” he said.
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