From Resource Works

Once more, we have to shake our collective heads at the (typical) lack of information from the government after the fanfare of announcements, news releases, and video clips.

Prime Minister Mark Carney’s addition of seven new projects to the Major Projects Office (MPO) list of ventures to be accelerated came with a vague promise from the MPO.

Now, said the MPO, it will “work with proponents, provinces, territories and Indigenous Peoples to find the right way forward for these projects.”

The new projects include the Nisga’a Nation’s Ksi Lisims LNG project in BC (and its PRGT pipeline), BC Hydro’s North Coast Transmission Line (NCTL) and the related  “Northwest Critical Conservation Corridor,” plus mining projects in Ontario, Quebec and New Brunswick, and an Inuit-owned hydro project near Iqaluit in Nunavut.

In all, a federal news release said, Carney’s announcements “represent more than $56 billion in new investment.” That’s in addition to “$60 billion for investments in nuclear power, LNG, critical minerals, and new trade corridors” that were announced in September.

Carney said: “Unlocking these resources . . .  will attract hundreds of billions of dollars in new investment and create thousands of high-paying careers for miners, carpenters, and engineers across the country.”
And it’s all aimed at reducing Canada’s dependence on trade with the U.S. As journalist Thomas Seal of Bloomberg News noted: “The country sells 75% of its goods to the US and projects on the list so far aim to help change that: port developments to ramp up trade with Europe, LNG terminals to sell gas to Asia, and mines to exploit global demand for critical minerals.”

But what does “fast-track” actually mean?

Carney’s Terrace, B.C. announcement raised a so-far unanswered question: What will the addition of these projects to the federal fast-track list mean in practice?

What can, or will, Ottawa actually do to support these projects and help bring them to fruition?

Carney gave no details, but federal officials say the Major Projects Office will coordinate approvals for all components of the projects to accelerate timelines that could otherwise take years.

The MPO is supposed to fast-track resource and infrastructure projects deemed to be “in the national interest.” The new projects have not yet been designated as “in the national interest,” which would qualify them for special treatment in permitting and approvals. Instead, Carney and the MPO used the words “national importance” and “national significance.”

And some of the projects Carney announced are already in progress, and it’s not clear what the MPO could do to move them along.

Does Ottawa plan to give the projects financial support?

The prime minister spoke of Ottawa putting up “huge financing” but, again, gave no further information.

As he listed the additions to the MPO project list, though, the Canada Infrastructure Bank announced a $139.5-million loan to BC Hydro to support “the early works phase” of the NCTL power line.

Does Ottawa see a role for the MPO in negotiating with First Nations and Indigenous peoples that are opposed to one or more of the projects?

PM Carney: “Referring to the MPO, or the Major Projects Office, does not mean the project is approved. It means that all the efforts are being put in place from the federal government in order to create the conditions so it could move forward. But those decisions are taken by many parties, including, very much, First Nations.”

The prime minister’s announcement was the first since the appointment of an Indigenous advisory council that is to help the MPO integrate the United Nations Declaration on the Rights of Indigenous Peoples, UNDRIP, into its decision-making.

Carney added that the “huge financing” he promised is aimed at encouraging Indigenous equity ownership of the projects.

Alex Grzybowski, CEO of the Indigenous organization K’uul Power, sees the North Coast Transmission Line as “a pretty solid investment,” but says First Nations would need to raise $275-$300 million to take equity shares in it.

To help First Nations get there, he calls on Ottawa to provide an investment tax credit, to increase the lending cap of the Canada Infrastructure Bank to $300 million from $100 million, and to provide “a federal loan-guarantee with a provincial backstop.”

Ksi Lisims LNG project

Ksi Lisims LNG is coming from a partnership of the Nisga’a Nation, Rockies LNG Ltd. Partnership and Western LNG.

The $10-billion project in northern BC would have two floating production platforms, producing for export 12 million tonnes of LNG per year. Natural gas for Ksi Lisims would come more than 750 km through the PRGT pipeline.

Ksi Lisims LNG says it hopes for construction to begin this year, with operations to start in late 2028 or 2029. It says it aims to be “net-zero ready” by 2030.

Charles Morven, secretary-treasurer for the Nisga’a Nation, said: “A lot of major work has taken place in the past five years, getting everything put together. This announcement gets us so very close to the finish line.”

And Eva Clayton, Nisga’a president, said: “We’re showing BC, Canada, and the world what Indigenous economic independence and shared prosperity can look like.” She spoke of “meaningful opportunities” for the Nisga’a — and for all Nations and communities in northern BC.

The Nisga’a Nation, a partner in Ksi Lisims LNG and its PRGT pipeline, says it is working with Indigenous communities to strike agreements, including equity stakes in the pipeline. A final investment decision on Ksi Lisims is expected early next year.

Environmental groups have also opposed the Ksi Lisims project, and the Union of BC Indian Chiefs cited environmental and climate concerns. But Carney said Ksi Lisims LNG will be one of the world’s cleanest operations, with emissions 94 per cent below the global average.

And the Nisga’a Nation said: “With our co-developers and Treaty Partners we will ensure this project reflects . . . our high standards of environmental protection.”

The prime minister said Ksi Lisims LNG will add $4 billion a year to the nation’s economy. And federal officials say Ksi Lisims could create thousands of skilled jobs, with Indigenous workers among them.

Said Carney: “LNG is an essential fuel for the energy transition. LNG can help Canada build new trading relationships, especially in fast growing markets in Asia. . . .

“Canada will be ready. We’re home to the world’s fourth largest reserves of natural gas, and we have the potential to supply up to 100 million tons annually of new LNG exports to Asia.”

And his announcement led the Canadian Association of Petroleum Producers to say: “Canada is on a path to become one of the top five LNG exporters in the world.”

North Coast Transmission Line

The 450-km North Coast Transmission Line from Prince George to Terrace would feed clean hydro power to LNG projects such as LNG Canada and the Haisla Nation’s coming Cedar LNG project, and it would also power mining projects and regional communities.

Carney said the power line could eventually connect with Alberta and support reliability, clean power development and new industrial investment across the West. Carney also spoke the potential for a northwest trade and energy corridor running from British Columbia through the Yukon with future possibilities for connection into Alberta. But, again, he gave no details of any plans.

Later, BC Premier David Eby called the NCTL “one of the biggest, most transformational opportunities” in a century. BC says the power line “will be co-owned with First Nations and will provide BC’s 98% renewable energy to the northwest.”

The BC government says the next major steps for the NCTL include finalizing the route. It says construction is expected to start in the summer of 2026, with phased-in completion targeted for 2032-34.

BC legislation would allow First Nations equity in the project and the province also says it plans to direct the B.C. Utilities Commission to allow the project to proceed without needing to go through the usual hearing process, potentially cutting a year to 18 months off the completion date.

To help First Nations acquire equity in the NCTL, Alex Grzybowski, CEO of Indigenous K’uul Power, says three things are needed from government:

“The first and most valuable thing they could do is provide an investment tax credit. And actually that wouldn’t hit their books for six years, so from an immediate financing perspective, that might be the best. . . .

“The next best thing would be to increase the lending cap for the Canada Infrastructure Bank from $100 million to $300 million, and then we would be borrowing money at below Bank of Canada rates, and we would be able to lend that money into construction, which would lower the cost of construction, it would lower the cost for the ratepayers, and it would increase the benefits for the First Nations. . . .

“The third thing they could do is provide a federal loan guarantee with a provincial backstop.”

BC says the NCTL project is expected to create some 9,700 direct full-time jobs, contribute nearly $10 billion per year to GDP and generate approximately $950 million a year in revenues for provincial and municipal governments. BC says it will also help prevent two to three million tonnes of carbon emissions a year.

The NCTL power-line plan also raises key questions, including this: How will BC Hydro come up with the new power to feed into the line? We have seen estimates such as this: “By 2050, BC may need to double or triple its . . . power generation as transportation, buildings and industry are all or partially electrified. Current output is generated with 32 hydro dams. Can the province build another 32 or 64 hydro plants in under 30 years? Of course not, so where will all that power come from?”

And what will NCTL cost?  The first estimate from BC Hydro is $6 billion, but Hydro’s costs for the Site C power dam finished up at twice what it initially estimated.

A cautious shift from past policies

Once more, we have to shake our collective heads at the (typical) lack of information from the government after the fanfare of announcements, news releases, and video clips.

We naturally wonder if Ottawa’s promises will be matched by performance, but at least we see some much-needed departure from the anti-project policies of the past Justin Trudeau government.

As CEO François Poirier of TC Energy puts it: “The policy environment is becoming increasingly supportive.”

Heather Exner-Pirot of the Macdonald-Laurier Institute says the new Carney budget shows signs of a better mix of “carrot and stick” than did the Trudeau government. “The last budget was still in the ‘stick’ era. Finally, we’re in a ‘carrot’ era.”

And she adds: “At least under this government, the bad things have stopped happening. And I would say, even with this budget, some of the bad things are actually going away.”

Let us hope so.

Photo credit to the THE CANADIAN PRESS/Sean Kilpatrick.

From the Fraser Institute

By Kenneth P. Green

The pending Memorandum of Understanding between the Carney government and the Alberta governments will reportedly support a new oil pipeline from Alberta’s oilsands to British Columbia’s tidewater. But B.C. Premier David Eby continues his increasingly strident—and factually challenged—opposition to the whole idea.

Eby’s arguments against a new pipeline are simply illogical and technically incorrect.

First, he argues that any pipeline would pose unmitigated risks to B.C.’s coastal environment, but this is wrong for several reasons. The history of oil transport off of Canada’s coasts is one of incredible safety, whether of Canadian or foreign origin, long predating federal Bill C-48’s tanker ban. New pipelines and additional transport of oil from (and along) B.C. coastal waters is likely very low environmental risk. In the meantime, a regular stream of oil tankers and large fuel-capacity ships have been cruising up and down the B.C. coast between Alaska and U.S. west coast ports for decades with great safety records.

Next, Eby argues that B.C.’s First Nations people oppose any such pipeline and will torpedo energy projects in B.C. But in reality, based on the history of the recently completed Trans Mountain Expansion (TMX) pipeline, First Nations opposition is quite contingent. The TMX project had signed 43 mutual benefit/participation agreements with Indigenous groups along its route by 2018, 33 of which were in B.C. As of March 2023, the project had signed agreements with 81 out of 129 Indigenous community groups along the route worth $657 million, and the project had resulted in more than $4.8 billion in contracts with Indigenous businesses.

Back in 2019, another proposed energy project garnered serious interest among First Nations groups. The First Nations-proposed Eagle Spirit Energy Corridor, aimed to connect Alberta’s oilpatch to a port in Kitimat, B.C. (and ultimately overseas markets) had the buy-in of 35 First Nations groups along the proposed corridor, with equity-sharing agreements floated with 400 others. Energy Spirit, unfortunately, died in regulatory strangulation in the Trudeau government’s revised environmental assessment process, and with the passage of the B.C. tanker ban.

Premier Eby is perfectly free to opine and oppose the very thought of oil pipelines crossing B.C. But the Supreme Court of Canada has already ruled in a case about the TMX pipeline that B.C. does not have the authority to block infrastructure of national importance such as pipelines.

And it’s unreasonable and corrosive to public policy in Canada for leading government figures to adopt positions on important elements of public policy that are simply false, in blatant contradiction to recorded history and fact. Fact—if the energy industry is allowed to move oil reserves to markets other than the United States, this would be in the economic interest of all Canadians including those in B.C.

It must be repeated. Premier Eby’s objections to another Alberta pipeline are rooted in fallacy, not fact, and should be discounted by the federal government as it plans an agreement that would enable a project of national importance.