As published in The Globe and Mail
There are defining moments in the life of any government, and Prime Minister Justin Trudeau has reached one now. Facing a dearth of investment in Canada’s energy industry and a chorus of complaints that Ottawa is ignoring the plight of Western Canada’s resource industries, the federal government is moving forward with two highly controversial pieces of legislation and will soon pronounce on the future of a critical piece of the country’s energy infrastructure.
Bill C-69, the government’s rewriting of the mandate and operations of the National Energy Board and the Canadian Environmental Assessment Agency, is an enormously consequential piece of legislation. It fundamentally changes how major energy, resource and infrastructure projects are reviewed in Canada.
Many of us believed from the outset that the bill as introduced was flawed. We feared it would place too many obstacles in the path to approval for major projects that can be significant drivers of economic growth and opportunity.
Given the broad scope and potential impact of C-69, achieving a consensus among industry and other stakeholders on amendments was never going to be easy. As an organization that represents major players in the energy and resources sector with diverse interests, we have worked in good faith diligently over the past several months to help broker a solution.
We said from the beginning that the aim should be a review process that is predictable and timely, one that results in judicially resilient decisions that provide assurance to private investors and the public.
The Senate sent the bill back to the House of Commons with an unprecedented number of amendments – more than 200. Environment Minister Catherine McKenna has indicated the government is willing to consider only a small number of the substantive changes suggested by the Senate.
The bill as amended is better, and in particular addresses some flaws in the previous legislation that hindered the ability of the mining industry to move forward expeditiously with needed investments. But overall, it falls short of what was required to win the broad support of the energy sector. For that reason, we cannot endorse it.
The government is also signalling its intention to implement Bill C-48, imposing an oil tanker ban on the northern coast of British Columbia. It plans to ignore pleas from the premiers of Ontario, Manitoba, Saskatchewan, Alberta and the Northwest Territories not to proceed with this ill-considered move. The government argues that the bill merely formalizes an existing policy. Still, it is hard not to view this development as a slap in the face to Canada’s oil sands industry, since oil tankers regularly and safely navigate extensive stretches of Canada’s coastline, as well as the St. Lawrence River.
There is one more pivotal decision to come for the federal government. It must render a verdict on the TransMountain pipeline expansion (TMX), which has been delayed while the government completes the tasks required by last year’s Federal Court decision. The ability to deliver oil to customers beyond North America is critical to ensuring that Canadians receive full and fair value for their resources. Equally important, TMX would generate additional government revenues that support Canadian social programs. The fact that a growing number of Indigenous communities wish to become equity owners of TMX – giving them more control over their economic destiny and enhancing their quality of life – underscores the project’s importance. It is time to get moving.
Time will tell whether the government got the balance right on C-69, but the oil and gas sector is already suffering an investment chill. Given the level of opposition to the bill in that sector, it is hard to believe that this legislation will help.
The bill’s supporters insist it will do nothing to stop important projects from going ahead. If experience bears that out, we may one day look back and say the government acted appropriately. But the onus is now on the government to show that the bill actually does what it is supposed to do: establish a project review and approvals process that enables trade, strengthens our resource industries and allows all Canadians, including Indigenous Canadians, to share the benefits of responsible economic development.