Adam Pankratz: Canada’s real economic enemy isn’t Trump. It’s the Liberals' regulatory overkill |
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Adam Pankratz: Canada’s real economic enemy isn’t Trump. It’s the Liberals' regulatory overkill
Industry leaders are sounding the alarm on self-inflicted rules killing investment and productivity
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The government of Canada needs to stop talking and start listening to what industry leaders are saying loud and clear: Canada’s main economic problems aren’t Donald Trump and the United States, they’re self-inflicted overregulation that’s stifling Canadian innovation and productivity. Bashing the United States might benefit Mark Carney politically, but it does nothing to solve our homegrown economic problems.
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Speaking in the Financial Times, representatives of Canadian industry explicitly identified our regulatory system, not Trump tariffs, as the real culprit of Canadian economic gloom. Derek Nighbor noted that overburdensome environmental regulations are “a productivity and competitiveness killer, driving away investment,” while Enbridge, a pipeline company, noted that “changes in policy and (the) regulatory environment need to happen,” before any further investment will happen on a new pipeline.
Adam Pankratz: Canada’s real economic enemy isn’t Trump. It’s the Liberals' regulatory overkill Back to video
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This regulatory burden has been the bête noire of Canadian industry for over a decade now. The examples are many. The highest profile was surely the Trans Mountain Pipeline (TMX) fiasco, which forced the government to take over the project as no private business would touch it anymore following years of unnecessary delays and shifting regulatory goalposts.
At least TMX got built. In many cases, the result of over-regulation is simply companies walking away or no economic activity. Canada allegedly wants to be a leader in critical minerals. Well, try getting a new mine permitted these days. Permitting a mine in British Columbia will easily run you 12 to 15 years. That’s an intolerable length of time for capital to sit in the hopes that environmental, First Nation, or general government opposition to such projects doesn’t fully jeopardize approval.
The results are there in the numbers. From 2015 to 2024, more than $1 trillion left Canada in search of better returns in other countries. While there are hopeful signs that capital might be slowly coming back, we have to get out of our own way in much more of a hurry.
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Sadly, in Canada’s Spring Economic Update, there is no news or urgency. Indeed, it is difficult to see what the actual difference is between the current government’s economic vision and that of the government it replaced. There is no new path forward, but rather a rehash of big spending promises, anemic growth projected at 1.7 per cent, and a dubious sovereign wealth fund, which is actually just more borrowing with a fancy name. What has changed? Not much.
It has been well known for years that Canada’s problem has been a lack of productivity. One might think, then, that we would focus all our efforts on our most productive industries: the resource sector. Sadly, we can’t really even take that seriously.
The Carney Liberals will point to their Major Projects Office as an indicator of their success here, but all their announcements thus far should be taken with a grain of salt. Of the projects thus far announced, none of them truly classify as “new.” They are all, by and large, projects which, against all odds, and often against government support, managed to stay afloat and fight their way through the torturous Canadian regulatory system.
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Having done so, the government is now belatedly (perhaps) making their lives a little less miserable and claiming to have “fast-tracked” them. Okay, good. But that’s not the same as turbocharging investment and fixing the real problem: overregulation and top-down dictates, rather than a streamlined regulatory system and a government that gets out of industry’s way.
Again here, Carney acolytes will likely point to the Enbridge gas pipeline expansion, which was just announced. This is a positive development, notably as the project will see First Nations with a 12.5 per cent equity stake in the project. However, the expansion application — note expansion only, not a new pipeline — was filed in May 2024. Essentially, the government is taking a victory lap for doing its job. Perhaps that’s now our standard in Canada: government doesn’t fully stymie development and growth, so it’s time to pop the champagne after we get over our initial shock that anything happened at all.
Canada is staring down the barrel of economic stagnation. The reason, which has been clear for a while, is overregulation and a government that can’t seem to get out of the way of private industry investment decisions.
Our government needs to focus on regulation reduction, not flashy headlines. Words are nice, but as His Majesty King Charles reminded us in Washington this week, actions are what really matter. The economic prosperity of Canadians hangs on those actions, which are thus far lacking. It’s time for the government to move.
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