By Martin Ignasiak and Heather Exner-Pirot, March 10, 2025
Canada is in a chaotic and unprincipled trade war initiated by what has historically been its most-reliable trade ally, and it’s being combined with aggressive threats of annexation. Ensuring Canada’s future sovereignty and economic prosperity requires the development of critical infrastructure connecting our producers of natural resources to our coasts, from which alternative markets, hungry for our resources, can be supplied.
Unfortunately, private capital is loathe to invest in the infrastructure projects required to accomplish this critical objective. Those who previously tried are still recovering from the wounds inflicted upon them. In the case of Enbridge’s Gateway or TC Energy’s Energy East, they dedicated years, and significant capital, to advancing projects that ultimately died due to a lack of support from political leaders. Private capital similarly abandoned the Trans Mountain Expansion (TMX) because of Canada’s dysfunctional regulatory processes and weak rule of law, which allowed a province and municipality to frustrate a project that the Government of Canada had declared in the national public interest.
Canada’s unpredictable and overly complicated regulatory processes have cost Canadians tens of billions. TMX had to be completed under government ownership and the resulting cost overruns were unprecedented. Nevertheless, in less than a year, it has proven its business case, unleashing new government revenues that can be used to support things like health care and education. For decades, Canadians will benefit significantly from the massive royalties and taxes generated by the export of oil that TMX allows for. But it could have generated billions more had it not been for the unnecessary and costly delays caused by our impossibly difficult to navigate regulatory regimes.
Our regulatory regime is also preventing us from meeting our greatest national priority, diversification of our trade partners. As confirmed by Enbridge CEO Greg Ebel, private capital will not invest in the major linear infrastructure Canada needs until we fix our regulatory regime.
He is right. Parliament needs to end the debate: major linear infrastructure that facilitates trade of our natural resources and energy is in the public interest. Whether it’s pipelines, transmission lines, rail, or any other interprovincial project that enables trade, investors need to know that Canada’s regulatory regime will focus on how, not if, their project will be allowed to proceed.
Parliament can restore investor confidence and attract the capital we need by immediately passing an act declaring certain transportation corridors in the national public interest. These “Trans-Canada Corridors” would facilitate the construction of pipelines, transmission lines, and other linear infrastructure required to facilitate market access. Consistent with best planning practices, these would be sufficiently wide to provide flexibility for detailed routing decisions, while co-locating linear infrastructure to mitigate impacts.
The specific routes of the corridors must provide competitive points of access to our coasts from which we can access global markets. Potential corridors could head north, to Churchill in Manitoba or Grays Bay in Nunavut, or from the Ring of Fire in Ontario south to existing transportation networks. Other corridors that will help investors access markets should be brought forward.
An obvious corridor route is the one previously proposed by Enbridge for its Northern Gateway Pipeline, or something close to it. Federal regulators and Cabinet already found this route to be in the national public interest. If it was in the public interest before our biggest trading partner declared a trade war, it’s surely in Canada’s national interest now.
Our regulatory regime should not be considering if these projects should go ahead – we already know they should. Instead, our regulatory regime needs to focus on how they should go ahead. That’s why we propose Parliament immediately pass a Trans-Canada Corridors Act (TCCA). A declaration by Parliament, being supreme in law, that these corridors are in the national public interest, would serve to re-focus our regulatory regime and consequently, help diversify our trade markets.
In addition, the TCCA should remedy several of the misguided principles that our current regulatory regime is built upon. One of these is a distrust of industry experts (see for example the 2017 Final Report of the Expert Panel for the Review of Environmental Assessment Processes), resulting in an inherent adversarial approach to proponents. This distrust resulted in the establishment of the Impact Assessment Agency of Canada (IAAC) to review projects that were previously the responsibility of expert regulators like the Canada Energy Regulator (CER), creating unnecessary duplication and complexity.
The TCCA would eliminate this overlap and confirm that the CER is responsible for the environmental assessments and regulation of interprovincial pipelines and transmission lines. Eliminating the role of the IAAC when projects are already subject to review by the CER or other federal regulators will help convince investors that Canada is serious about regulatory reform.
Second, the TCCA must immediately restore the scope of assessments to what they were intended for, namely identifying impacts on the environment and human health, as opposed to a myriad of other social and cultural issues. The scope of “impact” assessments has become far too broad under the Impact Assessment Act (IAA), resulting in lengthy delays, significant additional costs, and unpredictability. The Supreme Court of Canada also determined it to be unconstitutional.
An examination of broad social issues relating to “the intersection of sex and gender with other identify factors” and a project’s contribution to the highly subjective principle of “sustainability” may be interesting academic exercises, but they are irrelevant to the issue of whether a proponent’s proposed project design appropriately mitigates any potential effects on the environment and human health. Project reviews need to once again focus on the critical issues of environment and human health, with special consideration of Indigenous rights. This will immediately result in more efficient, timely, and predictable regulatory reviews.
Finally, the TCCA must be advanced in combination with efforts to eliminate misguided and arbitrary legislation that prevents Canada from effectively engaging in global trade of its resources. The Oil Tanker Moratorium Act, for example, is incompatible with developing new corridors and diversifying exports of oil.
By declaring certain Trans-Canada Corridors in the public interest, eliminating the role of the IAAC where it is duplicative and redundant, restoring the scope of assessments to what truly matters, and eliminating dubious legislative roadblocks to trade, a TCCA would go a long way to convincing investors that interprovincial projects can be built in Canada.
The final objective of the TCCA must be to provide investors with confidence that Canada is effectively and proactively managing its obligations with Indigenous groups who may be impacted by any development within one of the Trans-Canada Corridors.
The TCCA could establish a new office focused on managing Canada’s relationships with Indigenous people along the Trans-Canada Corridors. The CEO of this office must have the legal authority to negotiate on behalf of Canada and have direct access to, and support from, the highest officials in government. The federal government should appoint to this position a capable individual with a proven record in management and engagement with Indigenous communities on linear projects.
This new office (some version of an Indigenous Consultation Office (ICO)), must have at its disposal the tools necessary to work with all Indigenous groups potentially impacted by future projects proposed in any of the designated Trans-Canada Corridors. The ICO should focus on two critical mandates during consultations with Indigenous groups:
- Collect Indigenous traditional knowledge and establish which Indigenous territories may be impacted by projects proposed in the Trans-Canada Corridors. This provides proponents with the initial information they need to carry out their delegated consultations with impacted Indigenous groups. This also helps to identify, early on, reasonable accommodations that may be required in areas considered highly sensitive or culturally significant. Properly sized corridors will leave room for an efficient detailed route through the pathway, while providing sufficient flexibility to make reasonable accommodations.
- Follow through on initiatives intended to engage and benefit Indigenous communities, and ensure robust frameworks are in place to facilitate equity positions in projects that impact them. The ICO should take proactive steps to develop the framework and coordinate participation to facilitate industry involvement.
An ICO must be appropriately empowered, staffed, and financed so that it can efficiently and proactively work with Indigenous groups along the designated Trans-Canada Corridors. The TCCA will provide the ICO with the tools necessary to implement best practices from across the country, resulting in the most sophisticated and effective consultation and accommodation processes. An ICO, as the Crown’s representative, could ensure that Canada’s consultations with Indigenous groups are respectful and meaningful, while recognizing that the consultation isn’t about if the infrastructure should be built, but how do so in ways that uphold Indigenous rights and impart meaningful economic benefits.
Previous federal governments have advanced many of Canada’s most important infrastructure through legislation. The Trans-Canada Highway Act of 1949 and the St. Lawrence Seaway Authority Act of 1954 advanced the construction of critical infrastructure that has incredibly benefited all Canadians by opening trade routes and market access. The TCCA would pave the path for another round of critical infrastructure that will benefit Canadians for generations.
Given what Enbridge, and companies like it, have been through, Ebel’s insistence on real regulatory reform before he risks hundreds of millions of shareholder’s money is entirely reasonable. The TCCA would be a great start to demonstrate Canada’s commitment to fixing our regulatory regime. We need to get started right away if we are going to stay competitive in today’s changing world.
Martin Ignasiak is the head of Energy Regulatory Practice at Bennett Jones. Heather Exner-Pirot is the director of Energy, Natural Resources, and Environment at the Macdonald-Laurier Institute.