Canada risks billions without real regulatory reform

Fast-tracking a few projects hand-picked by Ottawa won’t save Canada’s economy

Interview requests

Canada’s regulatory system is broken, and Bill C-5 won’t fix it.

Passed in June, Bill C-5 (the Building Canada Act) is Ottawa’s latest attempt to speed up approvals for major resource and infrastructure projects. It allows the government to fast-track projects it deems in the national interest. But the fast lane is open only by government exception. For everyone else, the approval process remains as broken as ever.

We have been down this road before. The Impact Assessment Act, passed in 2019, was billed as a way to simplify the process. Yet in its first five years, only one project—Cedar LNG—was approved. At the federal level, approvals ground to a halt.

Today, 20 projects are stuck in the federal impact assessment system. Twelve are in the second phase, five remain in preliminary planning, and three are moving through a separate process that accepts provincial assessments. Of the 17 in the main federal stream, not one has reached the final stages.

The numbers tell a sobering story. In 2015, Natural Resources Canada’s major projects inventory was valued at $711 billion. By 2023, it had fallen to $572 billion. Adjusted for inflation, that should have been $886 billion. The $314-billion shortfall represents thousands of well-paying jobs, billions in tax revenue, and fewer funds for the health care, education and infrastructure Canadians depend on.

And it isn’t just energy projects. Mining proposals that could supply critical minerals for electric vehicles and renewable technologies have stalled. Infrastructure needed to strengthen supply chains sits in limbo. Manufacturing and industrial investments, which support middle-class jobs across the country, face the same uncertainty.

Meanwhile, other nations are moving ahead. Global upstream oil and gas investment climbed nine per cent in 2023 and is set to rise another seven per cent this year. Countries like Japan, South Korea and Germany, eager to reduce dependence on Russian energy, have sought long-term supply deals with Canada. Instead of seizing the opportunity, Canada has not acted, leaving competitors to fill the gap.

When international partners bypass Canada, the impact is immediate: jobs, investment and revenue flow elsewhere. Our global reputation as a reliable economic partner is in tatters, and opportunities that could have strengthened our economy vanish.

Bill C-5 acknowledges there’s a problem. But by offering a shortcut only for projects Ottawa hand-picks, it treats the symptoms rather than the disease. If the government truly wants to restore Canada’s economic dynamism, it must reform the approval system itself, so that speed and certainty are the rule, not the exception.

The first step is setting firm deadlines. Under Bill C-5, assessments for national interest projects must be completed within two years. That standard should apply across the board, with an 18-month goal. Endless delays and political pauses must end; investors cannot wait years for a “maybe.”

Equally important is respecting constitutional boundaries. Federal reviews should focus only on federal responsibilities such as navigable waters and fisheries. Duplication with provincial processes adds cost and uncertainty. Where a province has already conducted a credible review, Ottawa should accept it without delay.

The scope of assessments must also remain focused. Reviews should address measurable environmental impacts, not expand into subjective factors that complicate and prolong the process. For example, attempting to measure how a project intersects with sex and gender may be well-intentioned, but it is so subjective that it adds uncertainty and delay. Canadians want meaningful environmental protections, not lengthy studies that often have little bearing on whether a project is viable.

Some will say Bill C-5 is a start. But if Canada wants to compete globally, modest measures will not be enough. Other countries are moving quickly to attract capital. Without sweeping reform, Canada will continue to bleed opportunities and watch prosperity slip away.

Canadians deserve a system that is stable, transparent and efficient. They deserve the jobs and revenues that come with responsible development. And they deserve a government that makes prosperity the norm, not an exception reserved for the projects it chooses to favour.

The Building Canada Act is a tacit admission that Ottawa knows the system is broken. But without real reform, it risks becoming just another missed opportunity. Canada cannot afford to let another $314 billion slip through its fingers.

Krystle Wittevrongel is director of research at the Montreal Economic Institute, an independent public policy think tank with offices in Montreal, Ottawa and Calgary.