BUILD CANADA NOW: An Open Letter to the Prime Minister of Canada from Energy Leaders

We can strengthen economic sovereignty and resilience: Unlock private-sector investment, responsibly develop our world-class natural resources, support climate action

The Rt. Hon. Mark Carney, PC, MP
Prime Minister of Canada

Dear Prime Minister Carney,

On behalf of Canada’s leading energy companies, please accept our congratulations on your election victory and appointment as Canada’s new Prime Minister.

This moment marks not only the first chapter for your government, but also a vital opportunity for our nation to come together around shared goals and build the trust necessary to get big things done. Together we can Build Canada Now and strengthen economic sovereignty and resilience, by unlocking private sector investment, through responsibly developing Canada’s world class natural resources and supporting climate action to reduce emissions. As business leaders in Canada, we look forward to working constructively with you and your cabinet to achieve our energy sector’s potential and our shared goal to position our country as a global energy superpower.

For context, global prosperity will continue to rely on oil and natural gas for decades to come. Regardless of whether absolute global demand will grow or weaken over time, the natural decline of oil and natural gas production requires ongoing investment to replace that decline. Without continued investment, global supply could fall by more than half within 10 years—the question is, in what producing countries will investment occur, and the economic benefits realized? With abundant resources, a strong commitment to environmental stewardship and responsible energy production, it should be Canada, and it should be now. Canada can be a global energy leader and secure long-term economic prosperity.

We have reviewed your platform for governing Canada, particularly your ambition of building the fastest growing economy in the G7. As a major contributor to the Canadian economy, with significant untapped potential, the energy sector must play a pivotal role in your pursuit of this ambition. Growth in the Canadian oil and natural gas sector supports GDP growth, job creation, and tax revenue. Your focus on fostering energy independence and enhancing Canada’s energy infrastructure and clean technology, requires major sector investment and globally competitive energy and carbon policies. Over the last decade, the layering and complexity of energy policies has resulted in a lack of investor confidence and consequently, a barrier to investment – especially when compared to the United States, which is taking steps to simplify its permitting process.

In March, a subset of us wrote to you and the other federal leaders, outlining an urgent action plan needed to support ongoing and future investment from the energy sector in Canada. We note that many of these issues were talked about in your campaign and are of growing interest for Canadians as is evidenced by recent polling. The bullets below reflect our earlier action plan. Beneath each statement we have described opportunities to work together to deliver on our shared objectives.

“Simplify regulation. The federal government’s Impact Assessment Act and West Coast tanker ban are impeding development and need to be overhauled and simplified. Regulatory processes need to be streamlined, and decisions need to withstand judicial challenges.”
- Current regulatory processes are complex, unpredictable, subjective, and excessively long. These processes inhibit the ability of industry to make timely investments, add unnecessary costs and create uncertainty within capital markets. Aligned with your proposal to streamline the approval process, industry is committed to working with your government to ensure Canada can grow exports of oil and natural gas to other regions.
“Commit to firm deadlines for project approvals. The federal government needs to reduce regulatory timelines so that major projects are approved within 6 months of application.”
- Your proposal to have all federal regulatory authorities complete reviews of nationally significant projects within a two-year timeframe is a positive step, but insufficient. In our opinion, two years is still too long of a period for review and we must target a 6-month approval process to bring capital back to Canada. Additional clarity with regards to provincial jurisdiction is required. We believe that we can work together to accelerate this even further to accomplish urgent economic growth, while maintaining environmental standards and addressing Indigenous rights.
“Grow production. The federal government’s unlegislated cap on emissions must be eliminated to allow the sector to reach its full potential.”
- We continue to believe the federal government’s cap on emissions creates uncertainty, is redundant, will limit growth and unnecessarily result in production cuts, and stifle infrastructure investments. Together, we can drive investment into emissions reductions by simplifying the regulatory regime, establishing an attractive fiscal environment, and ensuring carbon policies protect our export industries.
“Attract investment. The federal carbon levy on large emitters is not globally cost competitive and should be repealed to allow provincial governments to set more suitable carbon regulations.”
- Recognizing the global nature of oil and natural gas, industry needs clear, competitive, and durable fiscal frameworks, including carbon policy and associated costs, sufficient to secure the required capital and incentivize investment in the sector. The current federal price and stringency trajectory results in uncompetitive costs compared to those we compete with to deliver our products to market. Additionally, the potential benefits of a federal approach, like consistency across jurisdictions and connected carbon markets, has failed to materialize. A solution is to revert back to the functioning system where provinces administer the policies and pricing to enable emissions-reduction investments, improve emissions performance, and maintain competitiveness.
“Incent Indigenous co-investment opportunities. The federal government needs to provide Indigenous loan guarantees at scale so industry may create infrastructure ownership opportunities to increase prosperity for communities and to ensure that Indigenous communities benefit from development.”
- Your intention of doubling Indigenous Loan Guarantee Program to $10 billion to support infrastructure ownership opportunities and increase prosperity for communities is aligned with our earlier recommendation. That being said, Indigenous loan guarantee programs are only effective if Canada fosters a competitive investment environment. We look forward to working with you on this initiative to grow the prosperity of Indigenous communities and earn their support for our shared ambitions.

The time is now to take action, signaling to the global investment markets that Canada is ready to move forward with achieving our shared vision of Canada as a leading global energy superpower.

We know the decisions in the coming months will have a lasting impact on Canada’s economic sovereignty, economy and global position, and that each of us—governments, industry, and Canadians—has a role to play. We can’t do it without each other.

The energy industry looks forward to working together, with you and your government, on an urgent basis, for the benefit of this country and Canadians nationwide.

Regards,

Related Topics:#EnergyNow.CA #MarkCarney BuildCanadaNow CanadaEnergyLeaders feature OpenLetterToPrimeMinisterOfCanada

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BUILD CANADA NOW: An Open Letter to the Prime Minister of Canada from Energy Leaders

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Who owns Canada’s public debt?

Published on May 4, 2025

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David Clinton

Remember when thinking about our debt crisis was just scary?

During his recent election campaign, Mark Carney announced plans to add $225 billion (with a “b”) to federal debt over the next four years. That, to put it mildly, is a consequential number. I thought it would be useful to put it into context, both in terms of our existing debt, and of some social and political changes those plans could spark.

How much money does Canada currently owe? According to Statistics Canada’s statement of government operations and balance sheet, as of Q4 2024, that number would be nearly $954 billion. That’s compared with the $621 billion we owed back in 2015.

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How much does interest on our current debt cost us each year? The official Budget 2024 document predicted that we’d pay around $51 billion each year to just service our debt. But that’s before piling on the new $225 billion.

We – and the governments we elect – might be tempted to imagine that the cash behind public loans just magically appears out of thin air. In fact, most Canadian government debt is financed through debt securities such as marketable bonds, treasury bills, and foreign currency debt instruments. And those bonds and bills are owned by buyers.

Who are those buyers? Many of them are probably Canadian banks and other financial institutions. But as of February 2025, according to Statistics Canada, it was international portfolio investors who owned $527 billion of Canadian federal government debt securities.

Most of those foreign investors are probably from (relatively) friendly countries like the U.S. and U.K. But that’s certainly not the whole story. Although I couldn’t find direct data breaking down the details, there are some broadly related investment income numbers that might be helpful.

Specifically, all foreign investments into both public and private entities in Canada in 2024 amounted to $219 billion dollars. In that same year, investments from “all other countries” totaled $51 billion. What Statistics Canada means by “all other countries” covers all countries besides the US, UK, EU, Japan, and the 38 OECD nations.

The elephant in the “all other countries” room has to be China.

So let’s break this down. The $527 billion foreign-owned investment debt I mentioned earlier represents around 55 percent of our total debt.¹ And if the “all other countries” ratio in general foreign investments holds true² for federal public debt, then it’s realistic to assume that the federal government currently owes around 11 percent of its debt to government and business entities associated with the Chinese Communist Party.

By all accounts, an 11 percent share in a government’s debt counts as leverage. Given China’s recent history, our ability to act independently in international and even domestic affairs could be compromised. But it could also be destabilizing, exposing us to risk if China’s economy faces turmoil which could disrupt our ability to roll over debt or secure new financing.

Mark Carney’s plan to add another 20 percent to our debt over the next four years will only increase our exposure to these – and many more – risks. Canadian voters have made an interesting choice.

“Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” – H.L. Mencken

1 Although I should note that, according to the government’s 2022-2023 Debt Management Report, “in 2022-23, non-resident investors held 29 per cent of Government of Canada securities”.

2 To be honest, there really isn’t enough data available to be confident in this assumption

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Federal government’s accounting change reduces transparency and accountability

Published on May 3, 2025

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From the Fraser Institute

By Jake Fuss and Grady Munro

Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.

All Canadians should care about government transparency. In Ottawa, the federal government must provide timely and comprehensible reporting on federal finances so Canadians know whether the government is staying true to its promises. And yet, the Carney government’s new spending framework—which increases complexity and ambiguity in the federal budget—will actually reduce transparency and make it harder for Canadians to hold the government accountable.

The government plans to separate federal spending into two budgets: the operating budget and the capital budget. Spending on government salaries, cash transfers to the provinces (for health care, for example) and to people (e.g. Old Age Security) will fall within the operating budget, while spending on “anything that builds an asset” will fall within the capital budget. Prime Minister Carney plans to balance the operating budget by 2028/29 while increasing spending within the capital budget (which will be funded by more borrowing).

According to the Liberal Party platform, this accounting change will “create a more transparent categorization of the expenditure that contributes to capital formation in Canada.” But in reality, it will muddy the waters and make it harder to evaluate the state of federal finances.

First off, the change will make it more difficult to recognize the actual size of the deficit. While the Carney government plans to balance the operating budget by 2028/29, this does not mean it plans to stop borrowing money. In fact, it will continue to borrow to finance increased capital spending, and as a result, after accounting for both operating and capital spending, will increase planned deficits over the next four years by a projected $93.4 billion compared to the Trudeau government’s last spending plan. You read that right—Carney’s deficit-spending plan over the next four years dwarfs the plan from Justin Trudeau, the biggest spender (per-person, inflation-adjusted) in Canadian history, and will add many more billions to Canada’s mountain of federal debt. Yet Prime Minister Carney has tried to sell his plan as more responsible than his predecessor’s.

In addition to obscuring the amount of borrowing, splitting the budget allows the government to get creative with its accounting. Certain types of spending clearly fall into one category or another. For example, salaries for bureaucrats clearly represent day-to-day operations while funding for long-term infrastructure projects are clearly capital investments. But Carney’s definition of “capital spending” remains vague. Instead of limiting this spending category to direct investments in long-term assets such as roads, ports or military equipment, the government will also include in the capital budget new “incentives” that “support the formation of private sector capital (e.g. patents, plants, and technology) or which meaningfully raise private sector productivity.” In other words, corporate welfare.

Indeed, based on the government’s definition of capital spending, government subsidies to corporations—as long as they somehow relate to creating an asset—could potentially land in the same spending category as new infrastructure spending. Not only would this be inaccurate, but this broad definition means the government could potentially balance the operating budget simply by shifting spending over to the capital budget, as opposed to reducing spending. This would add to the debt but allow the government to maneuver under the guise of “responsible” budgeting.

Finally, rather than split federal spending into two budgets, to increase transparency the Carney government could give Canadians a better idea of how their tax dollars are spent by providing additional breakdowns of line items about operating and capital spending within the existing budget framework.

Clearly, Carney’s new spending framework, as laid out in the Liberal election platform, will only further complicate government finances and make it harder for Canadians to hold their government accountable.