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By: Julio Mejía and Elmira Aliakbari
In late September, the Carney government approved the Tilbury liquefied natural gas (LNG) terminal expansion, accelerating the approval process by accepting British Columbia’s environmental assessment in place of a separate federal review. While Ottawa framed the decision as evidence that it can move major energy projects forward, discretionary, case-by-case approvals are no substitute for repealing the Trudeau-era policies still hampering large infrastructure projects, and the energy sector in particular.
During Trudeau’s tenure, Ottawa implemented policies that made it costlier to build, produce and refine oil and gas in Canada, and harder to get it to market. Consequently, between 2015 and 2024, investment in Canada’s oil and gas sector plummeted from $55.5 billion to $35.7 billion—a 35.7 per cent decrease. While other major oil-producing countries kept increasing investment to build infrastructure, explore for new reserves, and replace aging wells, Canada moved in the opposite direction.
Yet Ottawa isn’t just clinging to that regulatory environment—in some cases it’s adding to the burden.
For instance, the Carney government recently doubled down on Trudeau-era policies that drive up the cost of energy projects, including stricter methane rules expected to cost tens of billions of dollars. And last May, Ottawa and Alberta reached an agreement to raise the industrial carbon tax to $140 by 2040. None of Canada’s major competitors for oil and gas investment, including the United States, impose a similar burden on carbon-intensive sectors. Indeed, a recent study found that the industrial carbon tax will increase the cost of producing energy in Alberta such that the province is uncompetitive with energy-producing U.S. states.
Meanwhile, Bill C-48 remains in place, banning large oil tankers from loading or unloading at ports from the northern tip of Vancouver Island to the Alaska border. Given the law doesn’t (and cannot) restrict international tankers travelling that same coastline to and from U.S. terminals in Alaska, it only prevents Canada’s large-scale crude oil exports from ports in northwest B.C., such as Prince Rupert—North America’s closest port to Asia, with sailing times up to three days shorter than from other West Coast ports.
Bill C-69, the federal assessment process that became known as the “No More Pipelines Bill,” is another example. While Ottawa recently removed in-situ oil sands projects and fossil fuel power plants from the federal assessment process, many major energy projects remain subject to it and must still address subjective criteria, such as their effects on the “intersection of sex and gender with other identity factors,” making outcomes less predictable for project proponents.
Rather than creating a competitive, predictable assessment process for all projects, the Carney government has introduced rules that let selected projects bypass the rules everyone else must follow. For example, Bill C-5, enacted in 2025, grants the federal cabinet—and, in practical terms, the prime minister—a temporary five-year power to designate “national interest” projects and fast-track them outside the ordinary regulatory framework. Now, Ottawa is proposing Bill C-39, making those discretionary powers permanent and expanding them, allowing cabinet to designate entire “Regions of National Interest,” where certain projects could be considered pre-approved and fast-tracked through the regulatory approval process.
This measure doesn’t just open the door to political favouritism by pushing companies to seek approval from a small group of politicians; it also increases uncertainty by leaving investors facing an unclear and highly discretionary, politicized process. Simply put, Ottawa is gradually creating a regime where companies with cabinet’s backing can leapfrog their competitors and escape the Trudeau-era system.
Tilbury LNG may now move forward, but companies weighing their next projects still face many of the investment-killing policies from the past. Canada urgently needs a consistent, competitive regulatory framework that allows full use of its natural assets and sets clear and predictable rules for anyone looking to invest.
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