Chief Executive Officer of the federal Major Projects Office Dawn Farrell.ETHAN CAIRNS/The Canadian Press
Step right up, and buy your ticket, and take your chances! Mind the spin, and watch for the winners to be named! Anyone can play, but only a lucky few will hit the jackpot.
That ethos is all fine and well for a weekend jaunt to a casino, but it is not a way to reinvigorate industrial investment. Yet, the lottery economy, where Ottawa picks winners and losers, is what currently passes as regulatory reform.
Rather than hack away immediately at the red tape gumming up the review and approval process for industrial development, the Carney government has instead chosen to focus its efforts, and the public’s attention, on its Major Projects Office.
At a superficial level, it seems a grand idea: a one-stop shop to expedite projects deemed to be in the national interest, speeding up review and hastening a desperately needed economic pivot away from overdependence on the United States, as Ottawa targets doubling non-U.S. exports over the coming decade. And, for the 13 proponents blessed by the Prime Minister’s Office, the Major Projects Office is the luckiest of breaks.
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But then there is everyone else, still facing the same snarl of regulations, mandate overlap and bureaucratic inertia that has gummed up economic development. Arguably, the snarl is even more snarled: the more regulatory attention devoted to the lucky 13, the less there is for any other project.
Nutrien Ltd.’s decision two weeks ago to spend up to $1-billion to build an export terminal in Longview, Wash. is a case in point. Up to six million tonnes of potash a year by 2031 will be shipped through that terminal to Asian markets if the investment proceeds. That could have represented a significant step in diversification away from the United States. Instead, the terminal, once built, will mean that U.S. ports ship almost as much Nutrien potash as ports in this country.
The Saskatchewan fertilizer and agricultural giant could hardly have been clearer in flagging that outcome as a possibility. CEO Ken Seitz said in May that regulations, taxes and approval timelines would influence whether the company selected a Canadian or U.S. port. Nutrien has been naturally reticent, but the decision speaks for itself, as a repudiation of the Canadian business environment.
Ottawa is now attempting an emergency intervention with the company, hoping to convince it to change its decision. Transport Minister Steve MacKinnon said he will want to find out “what Canada could have done to make that better” as part of those discussions.
The temptation will be to answer: make Nutrien the 14th lucky winner in the Major Projects Office sweepstakes. That would be the easy, and wrong, answer.
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The right answer entails hard work at broad regulatory reform, and the expenditure of political capital. Mr. MacKinnon could start by ensuring labour peace at ports. Heather Exner-Pivot of the Macdonald-Laurier Institute points out that the transportation minister is already able under the Canada Labour Code to impose binding arbitration to “maintain or secure industrial peace.” The minister should make it clear he will use that power.
The goal of broad regulatory reform should be this simple: the two-year approval timeframe envisioned by the Major Projects Office should be the standard for all major industrial projects, not just those handpicked by the government. That will mean ending duplication with provincial governments and running regulatory processes concurrently rather than sequentially. Most critically, a new mindset is needed that prioritizes economic expansion. The government has, happily, set up Red Tape Reduction Office. Buy it a pallet’s worth of scissors.
There have been some steps in the right direction: the draft agreements between Ottawa, Manitoba and Ontario announced last week are the kind of unglamorous yet critical reform needed.
Corporate taxation needs to be retooled in the same way. The Carney government has carried on the misguided approach of the Trudeau-era Liberals in embracing boutique tax carve-outs for favoured sectors rather than broad-based cuts that benefit all comers.
It’s all part of the current government’s technocratic mindset, a fundamental inability to conceive that decision makers in the private sector might possibly have a better idea of how to place bets on investments than does Ottawa.