We need less politicking and more approvals for major energy projects
Canadians increasingly agree that our country’s full economic potential and energy independence will be unleashed only if more nation-building projects are approved — and quickly.
This includes pipelines, which a majority of Canadians in every province — including Quebec — now support. A February SOM-La Presse poll showed support for Energy East in Quebec at 59 per cent (with 22 per cent against). MEI polling done before the trade conflict with the U.S. showed 49 per cent support in Quebec (with 28 per cent against) for building new pipelines to tidewater on either coast.
Canada is long overdue for a project approval process that is swift by default. Importantly, Bill C-5, the One Canadian Economy Act, stipulates that major projects in the national interest will be approved in less than two years. The 20 projects currently languishing in the federal environmental approvals process have, on average, taken much longer than that.
Bill C-5 can potentially override or limit the application of the federal Impact Assessment Act, formerly Bill C-69 (the “no more pipelines bill”), and for good reason: it was ruled unconstitutional in 2023 by the Supreme Court of Canada, which agreed with the Alberta Court of Appeal that the act took a “wrecking ball” to exclusive provincial jurisdiction over natural resources, guaranteed under the Constitution.
However, it’s important to note that the IAA — which ironically was also once promoted as a “one-stop shop” to “speed up the approval of major projects” — has not been repealed, along with other harmful, anti-investment federal regulations, including the Clean Electricity regulations and the oil and gas emissions cap.
Adding to the uncertainty, provinces (and Indigenous rights holders) appear to have a veto under Bill C-5. Initially, Prime Minister Mark Carney suggested that he and certain ministers have the “authority” to unilaterally designate major project approvals and set development conditions. Energy Minister Tim Hodgson said cabinet will not discuss what projects are being fast-tracked until they are “finalized.”
However, when a reporter recently asked Carney, “If there’s a pipeline project you believe is in the national interest, but Quebec or British Columbia don’t want it, are you going to push it through?” Carney answered, “No, we need to have consensus from all provinces and Indigenous peoples.”
By adopting Bill C-5, the federal government is effectively admitting that the current major projects approval system is broken. Let’s unbreak it. Approvals in Canada must be swift by default, not by exception.
Last week, Carney said it was “highly likely” that a pipeline would make its way onto his government’s to-do list of nation-building projects. However, he added that he couldn’t guarantee it, given that proposals must come from the private sector.
Precisely. The now taxpayer-funded TMX pipeline, for example, was previously advanced by Kinder Morgan, before it pulled out in 2018 over increasing federal regulatory and political uncertainty.
It looks unlikely that Bill C-5 will do much to diminish such uncertainty. And entrepreneurs and investors, who spend millions developing project plans, will have to hope that their new mine, pipeline or hydroelectric dam catches the attention of the right Ottawa officials. Only then will they be able to access the faster approval process that Bill C-5 has, in theory, created. All other projects, no matter how beneficial, risk being bogged down in our broken impact assessment process and burdensome regulations.
For the sake of all Canadians, Bill C-5 should be amended so that it doesn’t apply exclusively to a few hand-picked projects. Rapid consideration must be given to all practical projects, including pipelines, that are advanced — or have been advanced — by private companies for solid economic reasons.
Projects that would truly signal economic growth would include a reboot of Energy East and/or Northern Gateway, with approvals to private companies guaranteed by governments. Northern Gateway in particular, cancelled by the federal government in 2015, would provide crucial “first-mover” advantage to Pacific markets.
By adopting Bill C-5, the federal government is effectively admitting that the current major projects approval system is broken. Let’s unbreak it. Approvals in Canada must be swift by default, not by exception.
And given Canada’s lacklustre growth prospects, time is of the essence.
Bronwyn Eyre is a Senior Fellow at the MEI. The views reflected in this opinion piece are her own.