The White Page of Surrender

One Page Tells the True Story of Budget 2023

The budget speech yesterday was quite anticlimactic. The speech from Minister Freeland was unusually short and nothing really stood out. The “Made-In-Canada Plan” title masked the fact that there was not really a plan at all in the budget with one major exception that I will explore below. The budget was more of a recitation of things the government had already done.

Budget 2023 had a little more money sprinkled on top of leftovers to provide a little seasoning. More money for dental care. More money for things the government likes to talk about like climate change. More money for things the government does not like to talk about like foreign interference. More money in the forms of investment funds managed by the government or one of its pensions funds. More money without much focus. What is incredible is that the government is still running massive deficits despite collecting billions more than forecast in an economy that has been near full employment. We could be near balance if there was any serious effort.

Perhaps my quick-witted colleague Michelle Rempel-Garner said it best in her lightening-fast essay on the budget. It really was an expensive, stale nothing-burger. with the exception of one, earth-shattering change that they have hidden on a single page in the document.

‘Say something nice…’

I will share a few positive comments off the top trying my best to follow the advice of my mother who used to tell me that ‘if you don’t have anything nice to say, don’t say anything at all’.

1. I appreciated the fact that the government moved forward on the toll-free Suicide Prevention Hotline championed by MP Todd Doherty and many mental health organizations (pg. 60). While I would have liked to see it a few years ago and still question what they claim it will cost, this is a positive move and will save lives.

2. I am also very happy to see a commitment to fund leave for families experiencing pregnancy loss (at page 148). This issue has been compassionately advanced for many years by MP Blake Richards and many impacted families. Every time the issue has come up, I would think back to our neighbours in Toronto 16 years ago. We were both expecting our first born babies around the same time and the birth of Mollie changed our lives, while our neighbours tragically lost their child just ahead of the due date. Their lives were never the same and their marriage was over before the year was out. Rebecca and I think about them often. We need to show compassion here and I am glad the government has.

3. I am also glad see the government finally get serious on economic reconciliation with Indigenous Peoples and specifically with improving benefit agreements with respect to major projects (at 128). This will be done in conjunction with the Canadian Infrastructure Bank to help finance life-changing equity stakes in major projects. This is a positive step that many voices have been calling for. The move also rectifies the failure of the Trudeau government to consult and meaningfully engage with First Nations on the creation of this federal bank in the first place.

The White Flag of Surrender

With my positive comments out of the way, I think I am safe to be critical. To me, this budget really comes down to 1 page out of the 255 page document. One page alone represents a quiet admission that the Trudeau government knows it has to fix one of its major errors in government. Perhaps this page is also proof of a recent conversion on the road to Washington following the successful state visit of President Biden last week. This one page tells the true story of this budget.

Page 92 - Getting Major Projects Done.

The Liberals would like to reduce this page to the friendly infographic I posted above or the word salad of progressive phrases that can be found on the page. They want you to focus on the indigenous benefits or phrases like “Building Canada’s clean economy” or “improving engagement”. All of this is window dressing. Page 92 is the not-so-subtle admission by the Trudeau Liberals that they made a colossal mistake years ago with the impact assessments surrounding major projects. It is a tacit acknowledgment that they need to quickly fix this error or watch the global realignment of trade and commerce pass us by.

Page 92 is focused at limiting and reversing the damage caused to major project approvals by their 2018/19 assessment legislation Bill C-69. This page of the budget suggests that they are planning to slowly unwind critical aspects of that legislation just days after they defended the constitutionality of it at the Supreme Court of Canada.

Bill C-69 created the Impact Assessment Agency and reset the process for review of the environmental and social impact of major projects in Canada. Page 92 wants to change that and announces that “the government [is] making it a priority to expedite major project reviews”. There is money to back this up on page 92 too. Budget 2023 allocates the Impact Assessment Agency and related regulatory departments an additional $1.3 Billion to “continue to improve the efficiency of assessments for major projects”. Billions are being invested to speed up impact assessment and approval of major projects. Days after President Biden challenged the Canadian Parliament “to help make our critical mineral supply chains the envy of the world” the Liberals have realized that the regulatory review process they created a few years ago will make this impossible.

Bill C-69 has hurt both capital investment in Canada and our national unity in the years since it was introduced. At the root of the legislation was a misguided attempt to stifle major projects in Canada by increasing the uncertainty surrounding environmental assessment and consultation. This also happened alongside a slump in resource prices and capital investment compounding tensions with western and rural Canada. I raised this in my first discussion with the Prime Minister as the Leader of the Opposition and throughout the last four years. Bill C-69 was bad legislation at a very bad time. Industry viewed it that way. Our allies in Washington viewed it that way.

While the legislation was promoted as reducing timelines for assessment, it actually permitted unlimited resets to the impact assessment timeline itself. It also opened up the process to more intervenors and allowed the impact assessment process to consider a range of amorphous impact considerations on a social or intersectional level. It also wove the precautionary principle into the process meaning that science would not guide the process, but fear would. All of these changes meant that impact consultation became unreasonably long and uncertain. Why would private sector capital flow towards projects where the emerging concept of ‘social license’ was next to impossible to obtain.

Page 92 of Budget 2023 shows the government is beginning to understand this. It begins with the acknowledgement that our “economy will require significant and sustained private sector investment in clean energy, critical minerals and other major projects”, so the Liberal government is going to try and unwind the delay and uncertainty that has been caused by C-69 measures. While their focus will be the “clean economy” and particularly electricity generation and critical minerals development for battery production, the budget seems to indicate that this faster and more efficient approach to major project approval will apply to everything. Thirteen agencies are directly or indirectly referenced in the investment portion of the budget. This suggests the changes will apply to critical mineral mines and hydro dams, but also to LNG projects and nuclear reactors. This is a very good thing, but it is also a recognition of the recklessness of the Liberal approach to date.

The Liberal government has realized that it is next to impossible to get anything financed, approved or built in Canada and that this needs to change. Billions of dollars of investment in Canada was put at risk as a result of the impact assessment changes. Nine provinces opposed the changes. Lawsuits were launched. The Conservatives have warned repeatedly about the negative impacts, but it took a Presidential nudge to force Trudeau to change course.

With the United States poised to possibly spend billions of dollars in Canada through the Defense Production Act as part of their effort to help decouple western supply chains from China, the Liberals realized that Canada had to make significant changes to how we approve projects or it risked missing the boat. This one page of Budget 2023 represents our dash towards the harbour. I am glad we are running for the boat. I just worry that it will take many years to repair the damage that has already been caused to our federation and our economy.

POST SCRIPT: Chrystia or Joe?

If you think my fixation on page 92 and the ‘white flag’ metaphor is a little over the top, I wanted to leave you with a little word association game to finish my essay. I have plucked a few quotes from page 92 of Budget 2023 and compared them to quotes from a Conservative politician made almost exactly 11 years ago to the day. Try and guess, who said what.

Ensuring timely completion of these projects is essential - it should not take 12 years to open a critical minerals mine…the government is making it a priority to expedite major projects while maintaining strong regulatory standards.

- Chrystia Freeland, March 28, 2023

The system should not take years and years to review a project. It's possible to make regulatory decisions in a reasonable amount of time without compromising the rigour or the standards of the process.

- Joe Oliver, March 27, 2012

The federal government stands ready and willing to work with provinces and territories to deepen federal-provincial cooperation to reach the goal of “one project, one assessment”.

- Chrystia Freeland, March 28, 2023

Our ultimate goal is simple but not necessarily easy to achieve: one project, one review, in a clearly defined timeframe. We can achieve a regulatory system that protects Canadians and the environment...

- Joe Oliver, March 27, 2012

Now that you get my gist, let’s finally start getting shit built in this country!