As the United States retreats from being a unipolar power, the prevailing global order is at a crossroads. For Canada, it’s time to start thinking about what comes next and what it means for Canadian policy. The Hub is running a new essay series to grapple with these seismic changes and offer a new clear-headed direction for Canadian foreign policy.
If Donald Trump’s tariffs remain mostly a threat, or are quickly resolved once they are in fact implemented, this tiff may counterintuitively have the potential to be one of the best things that has happened for Canadian prosperity and unity in a long time.
The visceral reaction to President Trump’s threat of so-called “economic warfare” has forced Canadians to take a hard look at our productivity challenges in general and high dependence on the U.S. market in particular. This has already generated political commitments from nearly every corner to break out of the malaise that has held us back from realizing our potential.
Following through could save Canada from economic devastation and boost our sovereignty; failing to make meaningful changes like those listed below will not only harm us but also risks fracturing the federation.
Premiers are committing to break down internal trade barriers, which is certainly overdue and could boost our GDP by billions. Economist Trevor Tombe has estimated the boost from eliminating them entirely could be higher than the 3 to 4 percent GDP contraction expected if the tariffs do materialize. Despite the sharp change in tone from our premiers, however, we should not expect all the jurisdictional turf involved in these provincial barriers to be ceded.
Fortunately, there has been a strong shift in tone in another critical area: streamlining regulations on major infrastructure projects that extract our resources and transport them east-west.
Across the political spectrum, and even in Quebec, there is suddenly a great deal of life in what seemed a moribund area of economic opportunity. As politicians and their economic advisors now desperately scan Canadian industries for means of boosting our productivity, hostile policies holding back resources—especially oil and gas—stand out.
In the last few months, many have come to realize that oil and gas is Canada’s largest industry by far, but that we take a significant discount from being dependent on selling to one customer. As talk about shutting off those energy sales built up, many also came to realize how dependent central and eastern Canada are on the U.S. because Canada has not prioritized energy independence.
Arguments that some of us have been making for years around the role Canada should play in meeting the demand for LNG in Europe and Asia are also finally getting through.
These breakthroughs are welcome, but as the major parties head into what suddenly appears to be an imminent election, Canadians need to demand more than platitudes.
Here are ten concrete proposals that will make clear to domestic and international investors that we are serious about boosting our productivity and becoming a resource superpower.
1. Repeal openly hostile measures
These include the West Coast tanker ban (C-48), 35 percent emission cuts for oil and gas by 2030, net-zero electricity regulations and electric vehicle mandate by 2035, and the “greenwashing” gag law (C-59).
2. Commit to making Canada an LNG superpower
Nothing Canada can do to reduce emissions comes close to displacing the growth of coal in an electricity-hungry Asia with our LNG. Nothing Canada does in foreign policy has as much muscle behind it as getting LNG to our European allies. They would also bring prosperity to both our East and West.
3. Start building a Northern Corridor
With a mainline from Prince Rupert to the “Ring of Fire” and spurs to the north and east, nothing would transform Canada into a resource superpower more than a northern corridor. It would include an added rail line, easement for pipes, trucking routes, and possibly power lines to link the hydro centres in central Canada with B.C. All the regulatory hurdles would be smoothed out in such a corridor, and the resource potential of the people and resources of the north would finally be unlocked.
4. Empower true partnerships with Indigenous communities
The federal government recently adopted a version of Alberta’s very successful Indigenous Opportunities Corporation, which backstops loans so Indigenous groups can be full partners in infrastructure projects, instead of “a problem to be managed.” The $5 billion federal cap is only slightly larger than Alberta’s $3 billion and should scale up with demand. Most of Canada’s resource opportunities are in regions with Indigenous communities eager to improve their prosperity, and willing to help model resource extraction and transportation in ways that benefit them long-term.
5. Use expediting powers in a revised Impact Assessment Act (IAA/C-69)
The IAA should be a blueprint for success not a scarecrow for investors. Among many changes, the 300- and 600-day review timelines must be cut significantly. Provisions in the existing IAA (especially section 37) to demand extremely short timelines for environmental and other reviews must be used aggressively when projects are deemed in the national interest.
6. Regulatory sandboxes
To avoid work stoppages, the government can put regulators on-site to mitigate issues with practical steps and document those that cannot be fixed quickly.
7. Injunctive relief
Whether under the regulatory sandbox model or separately in a revised IAA, projects in the national interest should be insulated from court-directed stoppages. Compensatory damages would still fully apply, but activist lawfare cannot be used to balloon project timelines and costs.
8. Use ministerial authority
Both the species at risk and migratory bird acts give the Environment minister the power to prevent projects from being held up for incidental impacts. TMX was plagued by delays from things as minor as a bird setting up a nest near a worksite alongside the Yellowhead highway. There is a common-sense balance that must be struck.
9. Defer to provincial assessments
When site-specific projects like mines or refineries are supported by a province experienced in regulating them, the federal government should not apply the IAA; duplication is eliminated by using the substitution power.
10. Dedicate federal funds to northern prosperity and energy security
A northern corridor will be expensive to establish, as would be an oil pipeline to eastern Canada. These (unlike tens of billions to foreign companies for battery plants that may not materialize) are nation-building projects on par with our first transcontinental railroad. While many projects (i.e. critical mineral mining or LNG plants) mostly just need government to get out of the way, if we want Canada to seize this moment and lay the groundwork for our security and prosperity in the coming decades, some projects will come with a hefty bill.
Conclusion
While the costs for a corridor are worth debating, streamlining regulations, committing to LNG, and empowering Indigenous communities are clearly part of what is needed to meet this moment of economic peril. We can no longer be dependent on the U.S. to be Western Canada’s main energy customer and Eastern Canada’s main energy supplier.
We can also no longer afford to pretend that our highly productive energy and mineral resources are not in strong demand around the world, or that they are too “dirty” for us to lean in to. Western Canadians have felt entirely marginalized by this kind of naïve attitude toward the resource sector. If the recent dawning of clarity about its value and potential dissipates as quickly as it arrived—or worse, if the West’s energy sector is made to bear undue harm in a trade war—separatist sentiment will surge.
Political leaders are more focused on prosperity and unity than we have seen in our lifetimes. Given all that is at stake, Canadians must demand not only that it be the focus of this election, but also that the next government fully follow through.
To view this commentary as it was published on The Hub website, please click here.