‘Uncertainty costs money’: Can Canada attract the investment needed to build major energy projects?

Shannon Joseph, chair of Energy for a Secure Future, analyzes the key provisions in the landmark MOU between Prime Minister Mark Carney and Alberta Premier Danielle Smith, including the lifting of the tanker ban, forthcoming changes to the industrial carbon price, and Indigenous ownership requirements. Joseph also discusses Canada’s comparative advantage in its energy self-sufficiency, the shift toward federal-provincial cooperation, and the investment conditions needed to move from political agreements to market-driven infrastructure projects. Energy for a Secure Future is a member of The Hub’s corporate council. You can listen to this episode on Amazon, Apple, and Spotify. Program Summary This is an automated summary. Please check against delivery. Canada’s energy sector stands at a potential turning point as recent political developments signal a shift toward greater cooperation between federal and provincial governments on infrastructure development. The changing landscape reflects a broader recalibration of how the country approaches energy exports, indigenous participation, and economic competitiveness in global markets. Central to this evolution is the reconsideration of regulatory barriers that have historically constrained Canadian energy exports. The oil tanker ban on British Columbia’s west coast has emerged as a focal point of debate, with critics arguing the policy blocks Canadian exports while allowing other international tanker traffic to continue unimpeded. The policy’s implementation occurred with limited consultation and generated divided opinions among various stakeholders, including indigenous communities whose leaders traveled to Ottawa to voice their perspectives. The current political moment represents what some view as the first significant federal-provincial consensus on energy infrastructure in years. This alignment addresses the fundamental challenge of market diversification, as Canada continues to face pricing disadvantages compared to international benchmarks for both oil and natural gas. The country’s heavy reliance on American markets has resulted in persistent discounts that affect economic returns and limit resources available for other national priorities, including environmental initiatives. Indigenous ownership and participation have become cornerstone principles in the new approach to energy development. Both federal loan guarantees and provincial support mechanisms are being positioned to ensure communities along pipeline routes benefit directly from projects. This emphasis on indigenous involvement from the outset marks a departure from previous experiences and reflects lessons learned from earlier infrastructure proposals that faced significant opposition despite having some indigenous support. The intersection of carbon pricing policies with infrastructure development presents ongoing challenges for investment attraction. Canada’s position as the only major energy producer imposing certain carbon pricing structures on its energy sector creates competitive concerns in global markets. Trade exposure remains a critical consideration as companies evaluate whether regulatory frameworks align with the investment signals governments aim to send. The balance between environmental ambition and economic competitiveness continues to shape policy discussions. Uncertainty itself carries economic costs, as investors require higher returns to justify projects with unclear regulatory futures. The simultaneous advancement of revenue-generating infrastructure alongside carbon capture initiatives introduces complexity, as these projects operate under different economic models and face varying levels of market certainty. The sequencing and interdependence of such projects will likely influence their ultimate viability and timeline. Canada’s broader strategic position as an energy-abundant nation with rule of law credentials offers potential for enhanced international influence. The country’s energy self-sufficiency exceeds domestic needs by a significant margin, positioning it as a potential stabilizing force in global energy markets. However, realizing this potential requires demonstrating the ability to complete projects and deliver on commitments to international partners. The shift from interprovincial tensions toward collaborative approaches could reshape Canada’s domestic cohesion and international reputation. Success in building infrastructure through cooperative frameworks involving federal, provincial, and indigenous governments would address longstanding questions about Canada’s capacity to execute major projects.