About Time

On September 16^th, the federal government announced substantial regulatory reform which hasn’t received a lot of press but will have a significant positive impact on our economy. Specifically, the government removed the duplicative Impact Assessment Act (“IAA”) review for specific energy projects. This change is positive for the Canadian economy and especially positive for Alberta. The clearest near-term beneficiaries are large, natural-gas fired generation projects, pipelines and power lines crossing provincial or international borders, offshore renewables, and qualifying in situ oil sands facilities. Projects will continue to undergo regulatory and environmental scrutiny, but without a superfluous IAA review process layered on top.

PM Carney made the announcement ahead of the Canada Investment Summit held earlier this month in Toronto as a positive message to investors that Canada intends to improve the conditions for major-project investment. Importantly, removing the IAA review doesn’t eliminate an environmental review. Hearings, assessments, Indigenous rights and the Crown's duty to consult remain, as do approvals under statutes such as the Fisheries Act and Canadian Navigable Waters Act.

The duplicative and harmful IAA review process was created by the infamous Bill C-69 in 2019 by the Trudeau government. You may recall Bill C-69 referred to as the “No More Pipelines” Bill due to the massive regulatory burden it placed on energy infrastructure projects such as pipelines.

This week’s chart highlights the decline Canada has experienced in terms of our relative industrial competitiveness. We were ranked 5^th globally in 2000 and have fallen to 19^th as of 2023. The increasing federal regulatory burden attributed to the Trudeau government is one of the factors driving this decline. Other factors include taxation, labour costs, and lack of productivity growth due to underinvestment. Removing the duplicative IAA review process from major energy projects doesn’t fix all that ails Canadian competitiveness, but it does send a very positive and very different message from our federal government to global investors.

The change in messaging and priorities from the Trudeau to the Carney government has been very stark indeed. To my knowledge, the shift in tone has been more dramatic from Trudeau to Carney under the Liberal banner than any other successive change in leadership within the same party in Canadian political history. The federal government has moved swiftly from the number one priority being virtue signaling to economic growth and resilience. How much of this shift has been driven by a response to President Trump’s trade policies vs. economic pragmatism and common sense is up for debate.

The term ‘useful idiot’ originates from the Cold War and was first published in the New York Times in June of 1948. It was a phrase adopted by Western political commentators to describe journalists, politicians, and intellectuals who praised Soviet regimes while ignoring human rights abuses. For how long have Canadian politicians been ‘useful idiots’ for the United Sates? When we fail as a nation to build the required infrastructure to diversify our exports to Europe and Asia while selling our products to the U.S at a discount, weakening our economy and tax base, we have nobody but ourselves to blame. It was a massive strategic error to prioritize virtue signaling over building energy infrastructure and it’s unfortunate that it took an attack from our largest trading partner for many Canadians to understand just how ‘useful’ our some of our politicians have been to the United Sates.