Fast-Track System Insufficient to Overcome Canada's Regulatory Hurdles, Report Warns
The Canadian government's new system for expediting select major projects has created a two-tier approval pathway, but this measure alone fails to address the broader regulatory challenges that continue to place the country at a competitive disadvantage for investment. According to a comprehensive report released by the Business Council of Alberta on Monday, while the Carney administration's establishment of a Major Projects Office to fast-track nation-building initiatives was a necessary step, it does not solve the systemic issues plaguing other projects.
"We're Regulating Investment Away"
Adam Legge, president of the Business Council of Alberta, delivered a stark assessment of the situation. "Canada isn't losing investment; we're regulating it away," Legge stated emphatically. "Our regulatory and project approval system has become the single-biggest barrier to attracting capital. The solutions are clear. We need faster and more certain timelines, removal of duplication, and predictable decision-making. If Canada is serious about growth and getting major projects built, the time to act is now."
The report highlights alarming statistics that underscore Canada's declining investment climate. Business investment per worker in Canada has plummeted by nearly 11 percent over the past decade. In stark contrast, the United States has experienced approximately 45 percent growth in business investment per worker during the same period. The authors attribute this disparity directly to Canada's increasingly burdensome regulatory environment.
Regulatory Requirements Skyrocket
Federal regulatory requirements have surged by 37 percent between 2006 and 2021, creating what industry leaders describe as an unpredictable and duplicative approval process. The business council is now calling for a substantial overhaul of project reviews and approvals under both the Impact Assessment Act and the Canadian Energy Regulator Act.
The report outlines several key recommendations aimed at streamlining federal approvals:
- A "one project, one review, one decision" system to ensure projects primarily regulated by provinces undergo provincial rather than federal review
- Firm timelines requiring reviews to be completed within two years or less
- Transferring all federal pipeline project reviews to the Canada Energy Regulator instead of the Impact Assessment Agency
- Quick action to repeal the ban on large oil tankers along British Columbia's northern coast
Industry Leaders Voice Concerns
Alex Pourbaix, board chair for Cenovus Energy Inc. and incoming chair for the Business Council of Alberta, explained the practical challenges facing project proponents. "Currently, particularly for pipeline projects, proponents can go through a multi-year process, investing hundreds of millions of dollars before they understand if their project will have government support," Pourbaix noted. "We have a system that is inherently political, because at the very end of the day, it's not an independent regulator that is putting thumbs up or thumbs down. It is the federal cabinet."
The business council's report represents a significant call to action for policymakers. With Canada's investment competitiveness at stake, the organization emphasizes that piecemeal solutions like fast-tracking select projects will not suffice. What's needed, according to the report, is comprehensive regulatory reform that creates certainty, eliminates redundancy, and restores Canada's appeal to domestic and international investors alike.
