“Getting major projects built means more jobs, in more regions across Canada, and more opportunities for the next generation of workers. Canada’s regulatory system must be efficient and quicker—it shouldn’t take over a decade to open a new mine and secure our critical minerals supply chains.”

These are not our words, though they could be. They come verbatim from Budget 2024. After almost nine years in office, the federal government is recognizing that slow, opaque, and duplicative regulatory processes are not good for anyone and they need to be fixed. We couldn’t agree more. But the first thing that needs fixing is the government’s credibility on the issue.  

The government’s messaging is evolving on account of a shift in public opinion and a growing sense of frustration that Canada is a difficult place to build major projects. In Budget 2023, the government committed to releasing a concrete plan by the end of 2023 to improve regulatory and permitting processes. That plan was never released by the end of 2023, and the responsibility was punted to a new Ministerial Working Group on Regulatory Efficiency for Clean Growth Projects, led not by usual suspects Environment Minister Steven Guilbeault or Energy and Resources Minister Jonathan Wilkinson, but rather Labour Minister Seamus O’Regan, who has arguably been one of the stronger voices for energy and resource development at the cabinet table. 

Perhaps recognizing the doubters, O’Regan posted on his social media that while “it sounds like just another government committee…this one has teeth.” Whether that will be proven true remains to be seen, but its early work as revealed in Budget 2024 is worth noting.

The government is establishing a Clean Growth Office to “reduce interdepartmental inefficiencies,” “prevent fixation on well-studied and low-risk impacts,” and “reduce redundant studies”; setting targets of five years for completing federal impact assessment and permitting, two years for non-federal projects, and three years for nuclear projects; building a federal permitting dashboard to increase transparency and accountability; and issuing a cabinet directive to drive culture change. 

These initiatives suggest that the government would like to see the wheels of its own bureaucracy turn faster. A risk-averse public sector, unbothered by the mounting regulatory and fiscal costs borne by proponents, has indeed been a big part of the problem, and it’s encouraging to see it acknowledged. 

But the implementation is still lacking.

The main lever that the government controls at a political rather than operational level is the Impact Assessment Act (IAA), also referred to as Bill C-69. The Liberals introduced this sweeping environmental legislation in 2019, despite a chorus of companies warning of its economy-stifling consequences, which have since been borne out. A majority of the provinces, led by Alberta, challenged it on the grounds that it impinges on their jurisdiction. The Supreme Court of Canada largely agreed in a decision in October 2023. 

This forced the federal government to undertake amendments to the IAA to ensure it complies with the Constitution. But it also presented a genuine opportunity to bridge the gap between itself and the provinces and territories and improve the efficiency of the assessment process. Ministerial working groups, permitting targets, and dashboards are fine; but the IAA is where the rubber hits the road in terms of attracting investment and moving major projects along. 

The opportunity has been missed. The amendments proposed for the IAA, announced in April, have been tacked on to the Budget 2024 implementation bill which, by fate or karma, is also numbered C-69. Based on an initial review, it appears the government has done the minimum possible to address the Supreme Court’s concerns, adding qualifiers to its areas of authority, but failing to correct the legislation’s negative impacts on the pace, cost, and efficiency of project approvals. 

The amendments are likely to face challenges again from some provinces, and in the event that a different government is elected in 2025, they will no doubt undergo wholesale revision. Meanwhile, companies and the investor community will continue to wait for clarity and, until they receive it, many will keep their money on the sidelines, or spend it in other countries. Canada can’t wait and should be bold and more intentional in its effort to grow market share and respond to a world thirsty for more Canadian-made energy, food, and critical minerals.  

The business community often says policy uncertainty is a major deterrent to investing in major projects in Canada. In fact, it seems the opposite is the real problem—there is a certainty that the regulatory and permitting process in Canada will be painful and costly and plagued by domestic politicking. In this respect, the amendments provided in C-69 version 2.0 do little to instill confidence that rules for approving and permitting projects in Canada are clearer and better off than what was initially proposed when the Impact Assessment Act came into force in 2019.  

We are seeing improvement in the government’s rhetoric around getting projects built because we are seeing rising expectations in the broader Canadian public to see these changes happen. For example, a recent Nanos Research poll found that two-thirds of Canadians support building new export facilities for natural gas, suggesting that Canadians want to see their country’s influence in the world grow through increased energy production and trade.

The only metric that matters is getting more projects built faster. And the track record right now is not good. The number of energy and natural resource major projects completed in Canada dropped by 37 percent between 2015 (88 projects) and 2023 (56 projects). The ones that get done, like the Trans Mountain expansion pipeline or Site C hydroelectric dam, are often beset by cost overruns and delays. Critical minerals production is down, in many commodities by double digits since 2018. The average time to get from discovery to production for new mines in Canada is now 18 years. 

As we’ve written in the past, much can be done to advance the principle of “one project and one assessment,” ie. reducing the duplication and redundancy inherent in our regulatory system. For starters, the federal government can use its Regional Energy and Resource Tables as places to work proactively with the provinces and territories to develop equivalency agreements over project approvals and restrict its role to permitting in areas of federal jurisdiction. Another option is to fast-track projects where consent and equity and/or benefit agreements with First Nations are already in place.

Because we are now reaching crisis levels, both in economic and supply chain terms, the federal government is taking the issue more seriously than it ever has before in its nine-year tenure. To show that it’s not too little too late, it will need proponents and investors to believe that government ambition can translate into implementation. Rather than saying what they will do, they should start doing what they say.     

In The Weekly Wrap Sean Speer, our editor-at-large, analyses for Hub subscribers the big stories shaping politics, policy, and the economy in the week that was.

The Liberals keep drawing false equivalencies between Israel and Hamas

This week’s petition by the International Criminal Court to issue arrest warrants for Israeli Prime Minister Benjamin Netanyahu and Defence Minister Yoav Gallant for “war crimes” provoked the same kind of false equivalence that we’ve come to expect from the Trudeau government since Hamas’ terrorist attacks on October 7.

While U.S. President Joe Biden rightly denounced the announcement as “outrageous,” the best that Prime Minister Justin Trudeau could seemingly muster was that it wasn’t “helpful.” It wasn’t clear for whom he thought it was unhelpful—the Israeli hostages, Palestinian civilians, or perhaps his own political standing. 

Foreign Affairs Minister Melanie Joly was even worse. She insisted that “all parties”—presumably referring to Israel’s democratic government and Hamas, the terrorist organization that’s committed to its destruction—“make sure that they abide by international law.” 

It was apparently lost on her that while Israel was evacuating 1 million people from Rafah before fully commencing its military operation in the southern part of Gaza, we were once again confronted by the brutality of Hamas in a video released by the parents of seven Israeli female soldiers in which they’re threatened with murder and rape before being taken into Gaza as hostages. 

It reflects a shameful pattern from the Trudeau government. The prime minister and the foreign affairs minister equivocate with procedural banalities while Liberal Members of Parliament are permitted to freelance on different sides of the issue. MP Anthony Housefather can speak in favour of Israel and others like Iqra Khalid, Salma Zahid, and Sameer Zuberi can downplay Hamas’s actions or distort Israel’s. 

There’s a tendency to assume that the government has adopted this double-speak due to caucus dynamics or electoral calculations. I have admittedly thought and said that at various points over the past several months. But I think it both under- and over-estimates the prime minister and his government. 

It underestimates the extent to which the Trudeau government is actually motivated by a recognizable progressive worldview. This isn’t a government merely following the polls. Its left-wing ideas and values fully underpin its governing agenda. 

It overestimates the Trudeau government for the same reason. One wishes that one could attribute the government’s positioning on the Israel-Hamas war to raw politicking. It would still be objectionable of course. But somehow it wouldn’t be as bad if one was convinced that the government knew what was right but was making unprincipled compromises for crass political reasons. 

The reality though is that the centre of gravity on these issues has shifted within the Liberal Party as it has become a more resolutely left-wing party under Trudeau’s leadership. This isn’t merely a consequence of greater representation of Arab and Muslim voices within the party either. One gets the sense that its prevailing views on these matters are now the same ones reflected in certain parts of academia, the student encampments, and the ICC itself. 

They believe that Israel and Hamas are by and large equally responsible for the bloodshed in the region. The latter may be less legitimate and more brutal but it still deserves essentially the same standing as the former. Both sides are ultimately to blame for the long-standing tensions and the current conflagration. 

As I said on this week’s Hub Roundtable, it’s difficult to empathize with those who subscribe to this viewpoint. It’s hard to understand how one could watch the video of the Israeli women and their tormentors and instinctively side with the latter. 

In his remarks at the Manhattan Institute annual awards gala earlier this month, Douglas Murray said that the Israel-Hamas war was an instance in which “a flare goes up and everybody can be seen precisely where they’re standing.” 

Indeed. 

Poilievre hints that income tax cuts could be his signature policy proposal

Last Sunday, Conservative Party leader Pierre Poilievre posted another one of his highly successful social media videos in which he spoke with Harrington, a forklift operator at a warehouse, about the burdens of income taxation and the inherent disincentives that it imposes on work.

The 1:18 minute exchange covered complicated tax policy issues, including the harmful effects of high marginal effective tax rates, but one wouldn’t have even necessarily known it. Their conversation was practical and straightforward. It reflected one of Poilievre’s key political strengths which is his unique ability to translate complex policy ideas into simple language. 

What made this particular video more notable, however, is it ended with something of a policy commitment. Poilievre said, “I will be cutting income tax not just to put more money into your pocket and let you bring more home but to reward the hard work of people like you and Harrington.” 

It’s one of the first times that we’ve heard him say that in a world of fiscal scarcity, he would dedicate scarce resources to lowering personal income tax rates. He didn’t clarify what he rates or by how much, but that he made the comment in conversation with someone who’s probably in and around the median earner suggests that he’ll presumably prioritize reductions to the lowest rate or the second rate, or possible changes to the basic exemption. Lowering the higher rates would not only seemingly conflict with Poilievre’s working-class message, but it also wouldn’t likely affect Harrington’s take-home pay. 

The overlooked pronouncement is noteworthy because even without specific details it tells us something about the fiscal distribution of a Poilievre-led government’s policy agenda. Lowering the first or second tax rate—even by a percentage point or two—would carry a significant fiscal cost. Raising the basic personal amount might even be more expensive. (The Parliamentary Budget Office’s Ready Reckoner provides useful rules-of-thumb on the revenue effects of different tax changes.)

If Poilievre is saying that he’s planning to cut personal income tax rates, what he’s really signaling therefore is the centerpiece of his policy platform will be a signature income tax cut. There will be limited fiscal capacity for other big-ticket promises—especially if the Conservatives remain broadly committed to reducing the deficit and ultimately balancing the budget. In fact, it will presumably require some much-needed “right-sizing” of the federal government to bring falling revenues and elevated spending into balance.  

In this sense, Poilievre’s comment in this short video may prove to be one of the most defining policy pronouncements that he makes between now and the next election. He’s effectively told us he’s going to bet on broad-based income tax cuts. It strikes me as a good bet.

The CRTC kicks the Online Streaming Act can down the road

An underreported political and policy development from earlier this month was an announcement by the Canadian Radio-television and Telecommunications Commission (CRTC) that it is delaying the full implementation of C-11 (Online Streaming Act) until after possibly after a 2025 federal election.

Hub readers will recall that the purpose of the controversial legislation is to extend the Canadian content regime—including its mix of levies and quotas—from traditional broadcasters to online streaming services such as Netflix and YouTube.

Although the legislation received Royal Assent in April 2023, its full implementation has always depended on the CRTC setting out rules and directives on its various provisions. The commission launched its consultations in earnest in Fall 2023 and has released periodical updates on its implementation schedule.

In order to convey a sense of urgency, the federal Cabinet issued a directive in November 2023 that required the commission to “make any changes to its regulatory framework that are necessary for the purposes of the implementation of this Order within two years after the day on which it comes into force.”

The legislation’s provisions concerning the treatment of so-called “Canadian content” on streaming, including its definition and prescribed treatment by the streaming services, are anticipated to be its most contentious. The CRTC initially signaled that it would hold consultations on them in winter 2003-24.

On May 8, however, it released a revised schedule that pushes those consultations into spring 2025 and signals that their implementation won’t come into late 2025 or possibly even later.

This is a big deal for three reasons. First, it means that the consultations will be underway as we head into the scheduled federal election campaign. If one assumes that the legislation is generally unpopular—particularly among younger voters—, the consultation sessions (which are bound to pit online cultural creators and legacy industry representatives) will restore it as a top-of-mind issue and renew debates about its costs and consequences for Canadian consumers as we prepare to go to the polls.

Second, the failure to fully implement the legislation prior to the election will leave outstanding questions about its practical effects on content creators and consumers unresolved. The effect will be that many will continue assume the worst-case scenario in terms of their ability to promote or find online content and the government won’t be in a position to point to actual experience as proof that they’re wrong.

Third, if the Conservatives are elected, it will be easier to repeal legislation that hasn’t yet been fully implemented. It’s one thing to take something away from people. It’s another to get rid of it before there are any so-called “winners.” The CRTC’s implementation delays mean that most Canadians won’t even know if (or when) it’s gone.