Fresh on the job, Mark Carney is facing down a monumental list of challenges. From Trump and his tariffs to national unity and social fracture, the prime minister and his government are dealing with their fair share of pressing issues. Faster economic growth won’t quite solve them, but slow growth will certainly exacerbate them. As Manitoba Premier Wab Kinew says, “the economic horse pulls the social cart.” It’s crucial, therefore, that the Carney government is focused on boosting Canada’s economic growth.
As a first step, Prime Minister Carney should start by recognizing Canada’s economic engine drives right through the West. We have what the world wants—oil, natural gas, potash, minerals (including but not limited to those on the “critical minerals” list), forest products (including bioenergy), food (and not just wheat, but a vast array food products which many Canadians are now discovering as they shop Canadian) and growing sectors like petrochemicals, hydrogen, renewable fuels, medicants (which include nutraceuticals, as well as prescription drugs) and aeronautics (DeHavilland is building out its footprint in Calgary).
How do we stoke the fire in this engine? The answer lies in a policy framework that supports business in getting products to market, respects provincial jurisdiction, and is built collaboratively on those areas where there is constitutional overlap.
The good news is that both the Liberal and Conservative platforms headlined the word “Build.” They weren’t wrong, and, given the high level of public support for both parties, Canadians thought so too.
So, how do we get it done?
First, recognize there has been a cost to our drive to be the global ESG leader, and as Trump dismantles U.S. environmental policies and subsidies, it will only get worse. Those costs come home to Canadians as a stagnant economy—with sluggish wages and job growth. Environmental policies like the Impact Assessment Act, the oil and gas emissions cap, clean electricity regulations, and the West Coast oil tanker ban have cost individual Canadians, communities, and our country not just direct costs but indirect ones like lost income and government revenues. Canadians want responsible environmental stewardship, but it must be balanced against policies and projects that support economic growth.
Second, these policies are, in large part, the result of federal overreach in areas of provincial jurisdiction. The constitutional court challenges launched by Alberta, Saskatchewan, B.C., and others are not just the domain of constitutional scholars and premiers who just like a good dust-up. They arise from federal interference in things they are not responsible for and therefore know little about.
If the Carney government wants to boost economic growth, activating the Western engine will require a reset with the Western provinces to reduce uncertainty, regulatory overlap, and inefficiency. The next step for Ottawa is to back away from these unnecessary and unaffordable laws and regulations, as well as other barriers to growth and investment that have failed to achieve either environmental or economic goals.
Take, for example, the Clean Electricity Standard. After three years of consultations and drafts of clean electricity standards, in an almost unnoticed move in December 2024, the federal government backed down on its 2035 deadline for a net-zero emissions electricity grid. But while the government finally recognized it needed to change its plan, it further needs to recognize that the standard is unconstitutional at its core.
Third, after vacating provincial regulatory space, the federal government can step up to cooperate with the provinces on those big issues like approving new major projects, building infrastructure corridors across provinces to enhance trade within Canada, and expanding our exports beyond the U.S., to name a few items on the federal-provincial agenda. Just because an issue is important across the nation does not mean that it is an issue of national concern to be unilaterally addressed by the federal government.
To continue the clean electricity example, the provinces have taken actions to achieve their goals in ways that are consistent with the diverse nature of their resource endowments, geography, and system choices, and they are cooperating with their neighbours where it makes sense. This is an important lesson for the Carney government.
It’s early days, but the prime minister will need a new vision for federal-provincial relations, and there is no shortage of examples of what does and does not work. What is clearly not effective are endless court challenges to federal regulations. These are long-standing deterrents to successful cooperative federalism that end with the Supreme Court providing answers to ongoing jurisdiction battles.
To build big things, both orders of government need to bring all their expertise, experience, and understanding of local, regional, and national context to the table—to work in collaboration with each other and industry to build the big things that will drive prosperity for all Canadians.
