Tim Sargent: Letter to a minister: How to protect the environment and support economic growth at the same time 

In a departure from past practice, Prime Minister Carney has decided not to issue individual mandate letters to his ministers, leaving each to determine on their own how best to contribute to the government’s agenda and fulfill their responsibilities. In Letter to a minister, The Hub’s new series in collaboration with the Macdonald-Laurier Institute, we will provide each minister with a policy agenda that is bold enough to address the grave challenges that the country faces, but manageable enough to be implemented in a realistic time frame.

The series begins this week with a letter to the minister of environment and climate change.

September 24, 2025
The Honourable Julie Dabrusin P.C. M.P.
Minister of Environment and Climate Change
House of Commons
Ottawa, Ontario

Dear minister,

Congratulations on your appointment as the minister of environment and climate change. You have found yourself right in the middle of passionate debates about how to balance the protection of Canada’s vast and diverse natural environment with the needs of an economy that depends heavily on resource development.

The prime minister has set an ambitious agenda for the new government and has outlined seven key priorities for his mandate. Your department has an important role to play in achieving these priorities, particularly “expediting nation-building projects,” “bringing down costs for Canadians,” and “spending less on government operations.”

Success will require reorienting Environment and Climate Change Canada (ECCC) towards a more focused and outcome-based approach to protecting the environment while supporting economic growth.

In this letter, I offer some concrete advice on how to do this, based on my experience as a deputy minister in the federal government.

Refocusing climate policy

The fight against global warming was an overarching priority for the Trudeau government, and the prime minister has made clear that he remains committed to the long-term goal of net-zero greenhouse-gas emissions by 2050.

However, the previous government’s approach, which relied on onerous regulations and taxes, as well as expensive subsidies, has imposed significant costs on Canadians. It has also provoked a bitter jurisdictional conflict with the provinces. Furthermore, the policies have not led to a meaningful reduction in emissions. As the chart below illustrates, emissions are little changed since 2016 and are well above the 2026 and 2030 interim targets. The commissioner of the Environment and Sustainable Development has been very clear that Canada is not on track to meet these targets.

A new approach to climate policy is urgently required. This new strategy should recognize that reducing emissions is a long-term, international challenge, and that progress depends on technological advancement, not by imposing disproportionate burdens on Canadian consumers and businesses.

Much of the heavy lifting for this new approach will need to be done by your colleagues, particularly the minister of natural resources. His department is best placed to deliver programs that promote innovation in clean energy and ensure a secure supply of cleaner energy sources, such as natural gas, which will allow Canada and the world to move away from emissions-intensive fuels such as coal.

Your department’s contribution should include working with the provinces on more realistic interim targets, while reducing the tax and regulatory burden for Canadians. The rolling back of the consumer carbon tax, implemented before the election, and the recent temporary suspension of the zero-emission vehicle (ZEV) sales mandate are both steps in the right direction, but much more needs to be done:

Develop realistic interim emissions targets. You should sit down with each province and work out realistic targets that are consistent with its economic trajectory. These provincial targets should then be the basis for a national target. Repealing the Canadian Net-Zero Emissions Accountability Act will provide the necessary flexibility to pursue this approach.

Fully delegate industrial emissions pricing to the provinces. The industrial carbon tax—known as the output-based pricing system—imposes significant costs on trade-exposed industries such as steel. Given the huge regional economic diversity in Canada, the best approach would be to have no federal pricing system, but to allow provinces to design their own industrial emissions pricing mechanisms. This will require legislative amendments to the Greenhouse Gas Pollution Act.

Eliminate the ZEV mandate. Canada’s auto sector is in crisis, facing declining production, trade tensions, and low uptake of EVs by consumers. While the recently announced temporary pause of the ZEV sales mandate was welcome, what the industry desperately needs is certainty. You should therefore announce the elimination of the EV mandate. This will not only help our beleaguered auto industry but will also avoid significant cost increases for Canadians buying new vehicles.

Eliminate the clean electricity regulations. These regulations mandate a net-zero electricity system by 2035. They have been harshly criticized—particularly by Alberta and Saskatchewan—as a clear intrusion into provincial jurisdiction over electricity generation. Furthermore, battery storage technology is not at a point where provinces can dispense with natural gas when the wind does not blow and the sun does not shine, meaning not just higher costs for consumers, but also the very real prospect of blackouts. These regulations should be repealed as part of Budget 2026, with responsibility devolved to the provinces, where it constitutionally belongs.

Eliminate the proposed emissions cap on oil and gas. The oil and gas sector is a key driver of our economy, and the world is going to need these forms of conventional energy for many years to come. The currently-proposed oil and gas emissions cap “creates uncertainty, is redundant, will limit growth and unnecessarily result in production cuts, and stifle infrastructure investments.” The focus should be on reducing carbon emissions per unit of output—where the industry has already had considerable success.

Reforming Canada’s environmental assessment system

As the prime minister has recognized, Canada has a major problem with a complex and litigious process for assessing the environmental impacts of major resource and infrastructure projects. While the Building Canada Act will potentially speed up approvals for certain selected projects, assuming it passes legal muster, it is a partial solution that does not address the overall problem of slow project approvals in Canada.

The main legislative culprits for this problem that fall under your authority are the Impact Assessment Act (IAA) and the Species at Risk Act (SARA). Both pieces of legislation intrude into provincial responsibilities (indeed, the Supreme Court of Canada has found sections of the IAA unconstitutional on that basis), leading to duplication and complexity. This makes it easy for well-funded special interest groups to delay and even block projects, even if they are supported by those directly affected.

Unlocking the potential of Canada’s economy, especially its resource sector, will require a wholesale reform of these two pieces of legislation.

Impact Assessment Act:

• Require deference to the “best-placed regulator” who is also the final decision-maker. This will often be the province or territory, except for projects such as pipelines or nuclear power stations, which are clearly in federal jurisdiction. Although the IAA has a provision for substituting a provincial assessment for a federal one, the federal government still makes the final decision, which injects uncertainty and the potential for legal challenge.
• Introduce a “directly and adversely affected” test as the basis for participation in project consultations. This will stop the process from being clogged up by outside groups who have no direct stake in the outcome.
• Legislate a six-month timeframe for project approvals, as requested by Canada’s oil and gas industry.

Species at Risk Act: 

• As with the IAA, reform SARA to allow for maximum delegation of authorities to the appropriate provincial government. This will ensure jurisdictional boundaries are respected: the provinces would have jurisdiction over most wildlife within their borders, except for wildlife on federal land, aquatic species, and migratory birds, where the federal government would continue to lead.

These legislative changes should be combined in a single bill, which could be introduced towards the end of the autumn session of Parliament. It will be important to consult with Indigenous groups as the bill is developed, particularly those with rights and title in areas where development is likely to take place.

Reducing spending

In the past decade, ECCC has expanded massively: overall spending has increased by 132 percent, so that in 2023-24 the Department (including the Impact Assessment Agency) spent over $2.4 billion. This increase was partly driven by a 30 percent growth in the number of employees and a 40 percent increase in operating costs over the past decade.

More troubling, as well as costly for Canadian taxpayers, has been ECCC supplementing its traditional role as a regulatory department with a new role as a major provider of funding, known as grants and contributions, to external stakeholders. This increase in spending is both remarkable and unsustainable: since 2015, spending has grown sixfold to more than $800 million annually.

As you know, the prime minister has been very clear that federal government spending must come down, and you will have already submitted proposals to cut spending by 15 percent over three years.

However, there is considerable scope to go further as you refocus the department on its core federal role. In my view, the department could be cut by an additional 15 percent, for a total reduction of 30 per-cent, and still be able to carry its new, streamlined responsibilities.

This could be done by:

• Cutting grants and contributions by 80 percent, including in the Canada Nature Fund and the Low Carbon Economy Fund, neither of which has delivered much in the way of concrete outcomes.
• Reducing operational spending and headcount each by 20 percent, with a focus on internal back-office functions, where spending is proportionately higher than in most other government departments.

These reductions will result in a leaner and more efficient department that is focused on achieving realistic and meaningful outcomes.

Final thoughts

Some people, including those in your own department, will criticize the recommendations in this letter as well as the steps the new government has already taken. They will argue that the government has abandoned the fight against climate change and will permit any project to go ahead, no matter how damaging to the environment.

However, it is clear that the current expensive and onerous approach is not working for Canadians, and that it often duplicates what the provinces are already doing.

By simplifying federal rules and regulations and by delegating more to the provinces, you can make a significant contribution to strengthening the Canadian economy and reducing costs for businesses and consumers, while at the same time reducing government spending.

While Canadians care deeply about their natural heritage, they also need the economy to grow, the cost of living to be kept down, and their tax dollars to be wisely spent. As minister of ECCC, you have the opportunity to implement a bold agenda that will advance all these goals.

Yours sincerely,

Tim Sargent