PROCESSWEST Magazine Online

Ottawa may have made things worse: think tank

Don Horne   


The new review process for industrial projects unveiled by Ottawa risks hurting the Canadian economy’s competitiveness even more by creating greater uncertainty among investors, points out one Montreal think tank, adding that the energy sector is already going through a difficult period.

The abandonment of the Energy East project and the recent complications surrounding the Trans Mountain project in Western Canada were already sending the wrong signal to investors, says MichelKelly-Gagnon, President and CEO of the MEI.

“We are less and less competitive,” cautions Kelly-Gagnon. “Investors are already starting to turn away from Canada in favour of the United States. Now, this structural change adds an extra layer of uncertainty that will push them away even more.”

Recently, the Minister of Environment and Climate Change announced a series of new rules applicable to companies wanting to invest in Canada to develop major projects.


Even though a new agency will be charged with evaluating all impacts, the minister will retain the right to give the green light, or not, to certain projects. This discretionary political power to reject a project on a purely arbitrary basis creates uncertainty for potential investors.

Indeed, the MEI showed last October in a Research Paper that the fall in oil and gas investment and the abandonment of projects, like the Energy East project, was already at risk of accelerating in Canada due to the erosion of our competitiveness compared to the United States in terms of regulations and taxes.

“These new rules are just a bunch of wishful thinking and contradictory objectives that do nothing to reassure those who want to invest in the country,” states Kelly-Gagnon. “The government must absolutely remedy the situation, and soon. Because for the moment, the message could not be clearer: Do not come here to do business.”

The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.



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