By Bob Weber

Prime Minister Mark Carney’s Major Projects Office is now six months old, just a baby in government years. But those gathered around the newborn’s crib already have plenty of ideas on how they’d like the infant to grow up.

Some look for an umpire—a neutral agency that simply evaluates big proposals and advises cabinet. “I hope they want someone who’s there to call balls and strikes,” Andrew Leach, an energy and environmental economist at the University of Alberta, told The Energy Mix. He said the MPO’s role should be to advance such projects, but also to ensure proponents have covered the environmental and consultation bases.

“You want someone in the room that when a company comes in and says, ‘Our project’s just not moving forward,’ (asks) ‘Have you done the work right?’”   Others want something more activist, pushing projects that further decarbonization, such as linking interprovincial electricity grids. “It needs to be a ramp up for renewable energy projects,” said Mark Kalegha, energy finance analyst at the Institute for Energy Economics and Financial Analysis. “Interconnectedness seems to be on their priority list and the MPO is able to help with the regulatory hurdles.”

A giant lab on regulatory reform would be welcome, say some. “What we’re hoping comes out of the Major Projects Office is learnings on how to accelerate reviews and processes without denuding them or making them any less stringent,” said Fernando Melo, public affairs director with the Canadian Renewable Energy Association (CanREA). “I’ve been out to many a project site where you ask, ‘How many permits are you filing?’ and the answer comes ‘Oh, five or ten’ … And I go, ‘One field.’”

Others expect it to serve an overall policy goal. “They’ve been focused on resources and infrastructure, in particular, trade facilitating infrastructure,” said University of Calgary economist Trevor Tombe. “That, to me, really speaks to the priority on trade diversification that the government has laid out.”

And some will be grateful if the whole thing doesn’t just turn into another deadening layer of lobbyist-ridden government bureaucracy. “

It does signal to investors that (their proposal) won’t be one of those Canadian proposals that takes 12 years. That’s the generous side of it,” said Heather Exner-Pirot, senior fellow at the Macdonald-Laurier Institute. But she asks, if excessive regulation is the problem, why not just reduce regulation?

“They’ve listed all these regulations that the MPO can bypass—why don’t they work on fixing those if they can be bypassed safely?”

But all say that attempts to assess the MPO’s direction need context. The office is just one part of a policy package aiming to reduce Canada’s dependence on increasingly unreliable United States trade, boost the country’s economic self-reliance, and move its economy toward a low-carbon future—all at once.

“Just as important, if not more important than the major projects themselves, is the policy,” said Janetta McKenzie, oil and gas director at the Calgary-based Pembina Institute. She said industrial carbon pricing, methane regulations, clean electricity regulations, and federal investment tax credits are just as big an influence on where investment goes as anything the MPO does. “

If the goal is to build a future-proofed Canadian economy that is more resilient to ongoing geopolitical shocks and volatility, then the investment signals need to be strong,” McKenzie said.

The Signals So Far

The signals, so far, haven’t been encouraging for climate goals. The federal government has junked consumer carbon pricing, tossed oil sands emissions caps, and weakened EV sales mandates. Tough economic times have proved tough for environmental policy, too, said Leach.

“Once people became convinced, rightly or wrongly, that Canadian environmental policy was the source of all their woes, there wasn’t much ground there left for the PM. “Voters are very keen on environmental policy as long as it doesn’t cost them anything.”

For example, the memorandum of understanding now being finalized between Alberta and Ottawa includes a promise of industrial carbon pricing—but also support for a new pipeline, which a Pembina analysis concluded would increase Alberta’s carbon emissions even if that oil was “decarbonized” through capture and storage.

Leach said national security concerns may now support the project. “All our pipelines in the U.S. are subject to a presidential permit the president can revoke at any time at our expense,” he said. “It’s still a conversation that’s in a dark corner, so to speak, but it’s a conversation we should be having.”

A Pipeline Full of Obstacles

But any new line faces considerable obstacles.

There’s neither a route nor a proponent, and the increased production needed to fill one would require massive upstream investment.

The MOU signed between Alberta and the feds rules out public financing, but former Alberta energy minister Sonya Savage recently told a CBC podcast that without public support a private proponent is, at best, highly unlikely.

Still, there may be a financial case to be made, suggested Leach, pointing to 2010, when pipeline bottlenecks forced producers to discount Canadian oil. If that happened again, the discount would now be on roughly twice as much oil.

“This is the math that people miss,” he told The Mix. “Even if you said this (pipeline) would reduce the differential by a buck, that’s four million barrels a day, 365 days a year times 15 years. (The investment) doesn’t look terrible.” Price, he said, is far more important than sheer volume.

But Canada will likely need to reduce that discount and squeeze out every petrodollar it can, and sustain it over a longer haul that may not be realistic. Before the current war launched the price of oil, it was languishing around $60 a barrel, with most experts predicting further falls. That market is likely to eventually return once the U.S.-Iran conflict ends. When the missiles stop flying, so will the value of oil.

Diversified Trade Could Boost Climate Goals

But the Carney objective of diversifying Canada’s trading partners could also advance climate goals. The projects currently before the MPO suggest at least some emphasis on clean energy, with wind power and minerals critical to electrification in the mix.

There’s also a proposal to link electricity gids in northern British Columbia and the Yukon.Climate and energy transition advocates say that is exactly the sort of thing the MPO should be doing to move Canada towards electrons and away from molecules.

“The more we integrate provinces and (make them) able to call on each other’s resources, it’s going to be better,” said CanREA’s Melo. “Having more connectivity will help enable greater decarbonization of the grid.”

In fact, grid ties are probably the only electricity-related projects big enough to appear on the MPO’s “nation-building” agenda. Solar panels and wind farms are also regulated provincially, putting them outside the MPO’s purview.

“The barriers to renewable penetration of electricity generation are provincial policies,” said the University of Calgary’s Tombe.

Trade diversification could provide another decarbonization prod. Canada will have to meet the environmental standards of those it seeks to trade with. Europe, for example, implemented its carbon border adjustment program in January. The policy imposes a tariff on imports of carbon-intensive products such as steel, cement, and energy that don’t meet EU standards. Melo said if Canada wants to play in those markets, it will have to comply.

“With the Canadian government’s stated goal of 50% of exports reaching alternative markets— the European Union, Japan, and China, which everyone forgets has an industrial carbon price— there’ll be more and more demand that the goods they import have low-carbon attributes built in.”

Weighing the Consequences

It’s unlikely that Mark Carney, once the UN’s special envoy on climate action, has forgotten the need to reduce carbon emissions. But he’s a central banker, too, used to weighing consequences of action against each other.

“The end game is going to be overall policies on consumption and overall policies on production,” Leach said. This may mean a little water in the wine of carbon cuts. Rather than absolute targets—the meeting of which has failed dismally—Canada may instead focus on simply being better than our competitors, some analysts say.

“Sustainability includes financial sustainability,” said Exner-Pirot. “The goal is not to kill Canadian production, but to make it better. Trying to square the circle involves making Canadian products competitive on carbon intensity, aiming for the good rather than the perfect.”

The Carney government must now make tough choices in the face of a new world order different than the one we were told to expect, Tombe said. “Reality has just thrown a few curve balls at Canada.”

“I do not see the government having abandoned any consideration at all about climate objectives,” he added. “But it also keeps in mind other criteria like trade diversification, economic and productivity growth … (Government) could achieve a lot more if it was singularly focused on climate goals. But it is not. It is balancing lots of objectives.”

The MPO itself has offered few clues as to its direction and intent. Although CEO Dawn Farrell is a longtime fossil energy executive who shepherded the controversial Trans Mountain pipeline expansion project, she has a non-partisan and even-handed reputation. Still, in testimony last fall before a Senate committee, she spoke approvingly of the carbon intensity of Canadian LNG. She also suggested a new oil pipeline to the west coast would have climate benefits, since much if that oil is used to make components for electric vehicles.

Some other senior staff bring past background in renewable energy and in reconciliation with Indigenous communities, but staffers have provided little information about where the office is going. Federal officials have told The Mix that Farrell maintains close contact with Carney and his senior staff, and that “all the major calls” will be made by the Prime Minister’s Office.

It’s early days for the MPO and the baby is barely walking. Where its first steps take it will be determined as much by the paths other policies have opened for it as its own inclinations.

But like any infant, observers broadly agree that it will take a while to mature. A $3.3-trillion economy does not turn around overnight.

“This process of diversifying trade, of boosting investment and growth, is going to be a multi-year, potentially multi-decade road that we’re on,” Tombe said. “We’re only at the very, very beginning. There’s so much left to do and so many unanswered questions still that need resolving.”

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By Justina C. Ray and Dave Poulton

Over the summer, the Canadian government announced that it’s setting up a Major Projects Office to identify and fast-track projects deemed to be in the national interest. The projects under consideration are spread across Canada and focus on mining, power generation and port expansions.

But each update to the list throws a spotlight on a persistent gap in Canada’s planning processes. The federal government has signalled it wants to see these projects move quickly — but without a clear way to help ensure they proceed without sacrificing the climate resilience, biodiversity or community trust that Canadians also value.

For example, the government has signalled interest in expanding the Port of Churchill, Man., with new shipping, road, rail and energy infrastructure to support expanded Atlantic access for Prairie industries.

These facilities would introduce industrial activity into Arctic and sub-Arctic ecosystems that have seen little prior disturbance and are already stressed by rapid climate change. The siting and design choices will be critical — raising questions about how early ecological risks are being weighed.

What Canada needs alongside its list of major projects is a principled, transparent sequence of steps that governs how those projects are planned and assessed.

Without such a strategy, the focus centres on pushing the project through. And planners and policymakers fail to consider those early, fundamental questions about ecological risk, or whether the location and design make sense in the first place.

Adopting a well-established mitigation hierarchy, as outlined in our recent report, can help Canada avoid the tangled and dysfunctional outcomes we see again and again in current planning and assessment processes.

In this context, mitigation refers to the full set of tools available to deal with environmental impacts, applied in a clear sequence or hierarchy: first avoiding impacts where possible, then minimizing those that remain, then repairing damage on site, and only as a last resort compensating for residual losses elsewhere.

Step 1: Avoid harm with early-stage planning

Too often planners focus only on reducing impacts after basic design decisions are made. This leaves decision-makers boxed into weaker options than if they had first asked what could be avoided — and it can be far costlier as late-stage fixes mean redesigns, deeper ecological damage and heightened conflict.

Effective planning requires backing up and taking in the big picture. What comes into view is a sweep of globally important, largely intact ecosystems — places that anchor our climate, support communities and sustain wildlife and their movements.

That means the first step in any sensible hierarchy is to steer development away from places like sensitive peatlands, areas important for biodiversity, cultural keystone places and headwaters that sustain vital watersheds.

Early-stage planning enables the most important questions to be asked: Is the proposed option the best means of meeting the need, or do lower-cost or less damaging alternatives exist? Are projected ecological, climate and community impacts supported by evidence of commensurate economic and social outcomes?

Answering these questions well depends on strong baseline information about ecosystems and communities — something too often missing at the outset, causing delays while data is gathered.

Governments can begin closing this gap by strengthening the evidence base needed to inform projects before they advance. This includes support for sustained regional ecological monitoring, Indigenous and community knowledge programs and fuller use of strategic and regional impact assessments. All of these measures can identify cumulative effects and landscape-level priorities and provide shared information for planning across entire regions.

Delivering on the Liberal commitment to “map Canada’s carbon and biodiversity-rich ecological landscapes … to enable a more holistic ecosystem approach to conservation, carbon accounting, and project development” would substantially advance and improve early-stage planning. Integrating existing data held by public agencies, private proponents and consultants would further clarify environmental strengths and vulnerabilities.

Step 2: Minimize harm that cannot be avoided

Only after fully considering ways to avoid impacts should the focus shift to minimizing unavoidable damage. This is where design and operational choices matter: adjusting scale, routing, timing and methods to reduce a project’s footprint and its effects.

In ecologically intact regions — places where human pressures have not yet reached levels that compromise core ecological functions — minimization also means confronting growth-inducing impacts head-on by limiting new access, managing roads and corridors and regulating the pace and scale of development to prevent cascading cumulative effects.

Done properly, minimization protects ecological function and reduces long-term environmental, social, and financial liabilities for proponents.

Step 3: Remediate to make impacts temporary

Once all feasible steps for minimization have been taken, it becomes appropriate to move on to onsite remediation — rendering unavoidable impacts temporary through progressive reclamation, revegetation and decommissioning.

Prioritizing remediation in already stressed landscapes reduces cumulative effects, restores ecological function and builds trust by demonstrating recovery during the life of a project, not decades later.

Step 4: Offsetting is the last tool, not the first

The final step in the mitigation hierarchy is offsetting — the idea of restoring or protecting habitat elsewhere to compensate for what is lost to development. In theory, this promises no net loss, or even a net gain.

In reality, it’s the riskiest and least reliable form of mitigation, which is why it must be treated as a last resort. When offsetting is used in isolation, long after a project’s design is locked in, it becomes a poor substitute for the harder, but more valuable, work of avoiding and minimizing impacts at the outset.

As we stress in our report, that kind of sequencing failure matters. Once decisions are made and footprints fixed, ecological losses can no longer be undone, and offsets are expected to carry a burden they cannot realistically bear.

Offsetting should therefore function as a backstop — not a shortcut. Yet, it is frequently looked to as if it were the first tool in the box rather than the last.

A unified federal policy framework

Deploying the mitigation hierarchy is a technically simple approach to project planning, and it can make a substantial difference in getting projects built without unnecessary delays.

It requires a planning mindset open to alternatives and a willingness to invest early in understanding ecosystems and community needs. The hierarchy also aligns with Indigenous perspectives that view natural systems as interconnected, offering pathways for more meaningful engagement.

There is nothing new about this approach. The mitigation hierarchy has guided major-project planning and financing in other countries for decades and appears — albeit inconsistently — across several federal policies. But in this moment of renewed ambition for “nation-building” projects, Canada has an opportunity to bring coherence and discipline to the management of environmental and social impacts.

This is why we are calling for a unified federal policy framework, so that the mitigation hierarchy is applied consistently across federally supported projects. A clear hierarchy — applied early, consistently and transparently — would make decisions stronger, projects more credible and our commitments to biodiversity, climate, and Indigenous rights more than words on paper.

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