This week, John Ivison engaged in a discussion with Dr. Heather Exner-Pirot, a senior advisor for the Business Council of Canada, regarding the Carney government’s ambitious plans for nation-building projects. The conversation raised concerns about the feasibility of these projects and the potential for pursuing initiatives that may not be economically viable.

Ivison questioned whether asking provincial premiers to submit projects considered in the national interest could lead to the selection of unfeasible projects. Exner-Pirot expressed cautious optimism, stating, "The tone has markedly improved from the last Liberal government, so there is some optimism. There is a sense that the federal government will be a partner in building things, where, for a long time, we thought they were blocking our ability to build things."

However, she emphasized the need for action, noting, "We actually have to see some action. And we know that Liberal governments are very good at rhetoric and not so great at implementation." Exner-Pirot raised concerns about the federal government’s role in determining which projects qualify as "nation-building" and how public funds would be allocated.

"The direction it’s going is a little concerning, in that they want to have a short list of nation-building projects and they will determine if it’s nation building and use the public purse to fund them in cases where the private sector will not step up," she said. While acknowledging the necessity for government involvement in infrastructure, she stressed the importance of improving regulatory competitiveness.

Exner-Pirot pointed out that many projects could proceed without government assistance if regulatory processes were less burdensome. "The low-hanging fruit is obviously to improve our regulatory competitiveness. We have very restrictive, very burdensome regulatory processes," she stated.

Mark Carney’s goal of a two-year approval process for projects was described by Exner-Pirot as a "great target," but she cautioned, "We should walk before we run. For some of these things, three years also look pretty good."

She highlighted the need for Canada to remain competitive with jurisdictions like Texas to attract investment. "Let’s make sure that our tax system is competitive so that capital actually wants to choose Canada," she said.

Exner-Pirot expressed strong support for nuclear power generation, particularly small modular reactors (SMRs), calling it a significant nation-building project. "We should lead on SMRs. And there are so many strategic reasons for Canada. One is that we have the uranium source. We are the world’s number two exporter and number two producer of uranium," she noted.

When discussing specific projects, Ivison inquired about the priority of a bitumen pipeline. Exner-Pirot agreed with Alberta Premier Danielle Smith’s assertion that a bitumen pipeline could significantly impact economic growth. "There is nothing that will change the economic growth, the GDP, the productivity per capita in this country as much as a bitumen pipeline," she said.

She pointed out the urgency for new pipeline projects, stating, "We’re seeing most of that demand come from Asia, so there is strong demand in global markets for Canadian heavy oil. But it is concerning that we have added this pipeline and we’re already running out of egress."

Exner-Pirot also addressed the need for the British Columbia government to reconsider its opposition to tanker traffic on the West Coast, emphasizing the importance of federal jurisdiction in inter-provincial pipeline matters. "The feds can overturn the oil tanker ban. That’s their jurisdiction. But what proponent really wants to step into a situation where a provincial government is going to use every tool in the toolbox to stop your project?" she questioned.

On the topic of a potential "grand bargain" between Alberta and Ottawa regarding decarbonizing bitumen, Exner-Pirot stated, "It is feasible. The industry itself has proposed carbon capture and also using some solvents to reduce emissions."

She noted that the oil sands have already reduced carbon intensity emissions per barrel by 30 percent over the last 11 years. "If we did this carbon capture, if we did some of the solvent innovations that they’re using, it would actually be below the global average on a life cycle basis," she explained.

Moving to the east, Exner-Pirot expressed skepticism about the commercial viability of Arctic ports, citing the significant investment in the port of Churchill without attracting shippers. "It’s a terrible idea for oil and a very bad idea for liquefied natural gas," she said, emphasizing the short shipping season due to sea ice.

Despite her concerns, Exner-Pirot remains hopeful that Canada can overcome barriers to economic development. "The signs are positive that Canada will finally get its act together and overcome the barriers to economic development because the alternative is stagnation," she concluded.